Talk:Hyperinflation in Zimbabwe

Untitled

Hello, I'd like to know how facts in recent dates are referenced using articles from 2008, 2009. I am talking about the current no use of the Zimbawae dollar as of 2013. srhzaidi (talk) —Preceding undated comment added 16:43, 2 June 2013 (UTC)

This article doesn't answer my questions about inflation in Zimbabwe. Are prices actually higher? That is, does it take more labor time to buy goods and services? More acres of land to get a tractor, etc.?

Ipknightley (talk) 04:41, 16 October 2011 (UTC)Yes and no. If a tractor costs, for example, US$10 000, with the exchange rate changing hourly the US$ price does not change but the ZW$ changes amlost hourly.

I gather that, in Zimbabwean currency, prices are skyrocketing, as in the early 1920s in the Weimar Republic.

But do people in Zimbabwe primarily use their own currency? What about so-called "hard currency"? --Uncle Ed (talk) 20:52, 22 July 2008 (UTC)

Ipknightley (talk) 04:41, 16 October 2011 (UTC)People in Zimbabwe do not use their own currency. They use ZAR, USD etc

There is a statement in the article "outlawing any raise in prices...Such measures, frequently tried during other episodes of hyperinflation, have always failed". I think it should be noted that this is not a general statement about hyperinflation anywhere. Such measures were taken in a period of hyperinflation in Israel in 1984, and coupled with a budget cut, managed to control hyperinflation. (http://www.time.com/time/magazine/article/0,9171,950206,00.html) 192.118.34.229 (talk) 06:59, 24 July 2008 (UTC)Tal

I'm curious as to how beer prices could go up 50% in one hour. How is WORD getting around? Is everyone in every business establishment listening to news broadcasts 24/7? Ipknightley (talk)See the example about the tractor.

I could understand crazy hyperinflation if the adjustments were less frequent -- every few days, for example, or at worst, opening rate each AM. With it being every HOUR, tho, how do people even keep up?

Ipknightley (talk) 04:41, 16 October 2011 (UTC)People do not keep up which is why Zimbabwe has effectively abandonned its currency

64.48.78.4 (talk) 08:43, 25 July 2008 (UTC)

It is hard for people to "keep up" with price increases. However, with Mugabe now operating policies which fix the prices, he is trying to slow down this, at the dismay of businesses which are becoming bankrupt as a result. Mugabe is trying to keep businesses from selling over his prices, and he only changes these prices at certain intervals. As a result, those who do not resort to the blackmarket will get a reasonably maintained price, at the expense of businesses who will have to wait till Mugabe allows them to increase their prices. However, this is not a cure for inflation, all it can do it slow it down in the short term. --HandGrenadePins (talk) 15:06, 25 July 2008 (UTC)

$100B Note

Is the new bill to be unveiled = 100 * 10^9 or 100 * 10^12? Anyone know? If someone knows they should add it to the article.Schoop (talk) 14:06, 25 July 2008 (UTC)

BBC uses short scale, so it is 100 000 000 000 Zdolllars —Preceding unsigned comment added by 212.95.180.130 (talk) 09:48, 30 July 2008 (UTC)

Look at the recently added picture for an answer to your question. --Discott (talk) 15:21, 2 January 2009 (UTC)

Ipknightley (talk) 04:41, 16 October 2011 (UTC)I have a TEN Trillion Dollar bill in my possesion.

For clarity, the Ten Trillion dollar bill is $10,000,000,000,000

And there is a One Hundred Trillion bill: $100,000,000,000,000 — Preceding unsigned comment added by 97.127.176.4 (talk) 08:29, 11 February 2012 (UTC)

Daily rate

One source of confusion that can arise here is that the daily inflation rate is not the yearly inflation rate / 365. It is actually the 365th root of the yearly inflation rate (starting at 1=no change). For relatively small numbers the first is a good approximation but this is no small number. So a 11,268,758.9% inflation rate yearly is not 11268758.9/365=30873.31% inflation daily - it is actually 10 ^((log 112687.599)/365)= 1.0324 = +3.24%. Believe it or not, take (1+0.0324)^365 and you get a full 112687-fold increase yearly - it doubles in 22 days, triples in 35, quadruples in 44, quintuples in 51... 6:57,7:62,8:66,9:69,10:73 ... 20:94, 30:107, 40:116, 50:123, 60:129, 70:134, 80:138, 90:142, 100:145 ... 200:167, 300:179. Take 300x300 and you see how you arrive at such a high yearly rate. It seems very counterintuitive... which is how bankers manage to take such advantage. This wouldn't pass WP:NOR, but some explanation should be given how 11 million percent yearly can be 3.2% daily. I think therefore that the bottle of beer example can't be representative. If someone keeps assets in this currency they disappear quickly, but even at this rate it still shouldn't pay to buy at the first merchant you see in order to spend the money faster, for example.

If you chart the inflation rates, they are exponential on a semilog graph! The past three years form a sharply increasing line of growth, with log10 of the inflation rate as 1.14, 2.82, 5.05... if that keeps going the inflation rate next year could be 200 times higher. Yet even so, that is still 'only' 5% a day inflation, which is only incrementally different from the current situation. One wonders just how absurdly high hyperinflation can truly go. Wnt (talk) 19:05, 3 September 2008 (UTC)

Bank rates in Zimbabwe

What kind of interest rate is standard savings accounts in Zimbabwe banks offering to keep up? 65.167.146.130 (talk) 21:33, 19 January 2009 (UTC)

Ipknightley (talk) 04:41, 16 October 2011 (UTC)Effectively they are not offering any.

The cause

Hyperinflation isn't a curse that's been dropped on Zimbabwe from outer space. Rather, to any economist it's an obvious consequence of the decisions of the government and the Reserve Bank of Zimbabwe to print gobs and gobs of money. The quantity theory of money is the term for this explanation. This article and the whole series of related articles (Zimbabwe dollar, Gideon Gono, Robert Mugabe, etc.) should I think reflect more extensively the immediate link between RBZ policy and its disastrous consequences. Jeremy Tobacman (talk) 04:07, 31 January 2009 (UTC)

The 'Cause' section is rubbish and reads like a high school essay. It seems more about Mugabe bashing (as warranted as it is; not in this article) than the actual direct link between failed government and hyperinflation. I came here to try to read both how hyperinflation occurs and why it occured in Zimbabwe. Right now I get "Hyperinflation continues to cause more poverty and poverty in turn causes more violence and discord. This discord then contributes to inflation." THAT IS NO EXPLANATION.

Ipknightley (talk) 04:41, 16 October 2011 (UTC)THAT IS THE WAY IT IS. It is very hard for people from stable countries to comprehend the situation in countries like Zimbabwe.The failed government you talk about IS Mugabe.

Could we please have an economist scrap that section and rewrite it? The third point about the Second Congo War gives something of an explanation, but again is marred by statements like "Zimbabwe was involved in this conflict not because the Democratic Republic of the Congo was a bordering nation and posed a threat, but instead because rebel territory contained diamond mines." which are irrelevant. --Africantearoa (talk) 10:48, 9 May 2011 (UTC)

From what I understand, inflation is caused by government policies, as was the case in Germany circa 1922, most of Africa and South America, the devaluation of the dong since the 1950's, and sometimes from economic collape as with the pengo, reichsmark, somali shilling. Thats all I have to say. Enlil Ninlil (talk) 12:02, 9 May 2011 (UTC)

Ipknightley (talk) 04:41, 16 October 2011 (UTC)Government policies are made by who ? The government. Who is the government ? Mugabe.

I agree. The so called 'Cause' section is rubbish and completely lack a neutral point of view. This should not be a section for Mugabe-bashing, regardless of how justified criticism against him is. —Preceding unsigned comment added by SwiperSE (talk • contribs) 01:40, 15 May 2011 (UTC)

Ipknightley (talk) 04:41, 16 October 2011 (UTC)You see this as Mugabe bashing, others see it as the truth. Mugabe has been in power since the 80's ergo it is not the cumulative failings of a government, but the failings of Mugabe. Take South Africa who have had numerous leaders, all ANC admittedly but no dictatorship. Not blaming Mugabe for the situation in Zimbabwe would be akin to not blaming Bin Laden for the attacks of 9/11

The article tries to indicate the the hyperinflatiion dated from the civil war which ended 1980. That is illogical. The inflation problem arose after 2002 due to the illogical and racist attacks on white owned land and businesses.

This argument seems to be pretty much over at this point, so perhaps I should summarize the primary points to prepare for editing:
1)The diamond mine thing may provide context but it probably should be removed as overly tangential.
2)Ditto for the massacre thing. (although it was an interesting read)
3)Descriptions of vicious cycles do not contain information.
4)Mugabe is the government, but that is irrelevant. The government should only be referred to as the government.
5)Nobody here has properly signed a comment.
6)Someone thinks that the inflation started in 1980 because they can only see mugabe.(insult not intended)
7)Someone thinks that the inflation started in 2002 because they can only see the black supremacy.(insult not intended)
Somebody should make a BOLD edit and address points one through four. That person is not me as I am feeling lazy. 204.191.162.48 (talk) 12:32, 5 April 2012 (UTC)

I was not feeling bold but was intrigued by the title and know when writing needs streamlining (despite never having been closer than Morocco). I agreed with points 1 through 4 before reading them, though the article sometimes still uses "Mugabe" synonymously with "the government" and retains a note about massacres. I added an overview of monetarism at the start of Causes to put it in context, and added material to relate anecdotes (and concepts such as vicious cycles) to one another, for which some people may want citations. Someone who has been here for longer should remove the tags on the article if you believe it is warranted. Spike-from-NH (talk) 15:09, 18 April 2012 (UTC)

The Cause - Confiscatory Legislation

In the Zimbabwe Democracy and Economic Recovery Act of 2001, the lines of credit of the Zimbabwean government at IFIs (mentioned in Section 3) are confiscated, through Section 4 C, titled Multilateral Finance Restriction:

(c) MULTILATERAL FINANCING RESTRICTION- Until the President makes the certification described in subsection (d), and except as may be required to meet basic human needs or for good governance, the Secretary of the Treasury shall instruct the United States executive director to each international financial institution to oppose and vote against--

(1) any extension by the respective institution of any loan, credit, or guarantee to the Government of Zimbabwe; or (2) any cancellation or reduction of indebtedness owed by the Government of Zimbabwe to the United States or any international financial institution.

ZDERA 2001 was signed into law December 21 2001. This is very close in time to the date that the Zimbabwe Dollar-US Dollar exchange rate took off. 83.84.100.133 (talk) 00:52, 12 January 2021 (UTC)

References

What War?

There's a reference to a conflict in the lede. I wonder which war is being referred to? -- 92.4.100.200 (talk) 18:59, 13 March 2012 (UTC)

Milton Friedman

Friedman's views placed so prominently are absolutely POV. Right-wing economists love to try and claim any instance of inflation and hyperinflation as proof they are right, that's why his name was inserted into the article. It is a totally flawed view of inflation, as Paul Krugman recently observed. My favourite quote is from Robert Solow: "Everything reminds Milton of the money supply. Well, everything reminds me of sex, but I keep it out of the paper." ~ Iloveandrea (talk) 19:16, 22 April 2012 (UTC)

I did not think that Keynesians disagreed with Friedman's view of inflation as a monetary phenomenon, but only held that deliberate increase in the money supply is sometimes a useful policy tool. All other things being equal, doubling the money supply will certainly tend to double every price. Your link is to an opinion that the money supply has been gunned in the US (where all other things certainly are not equal) and hyperinflation has not happened...so far; to me, not a disproof.

Anyway, do you object only to my insertion of the Friedman quote, or to the section's thesis that the "Causes" were monetary and other misgovernment, or to the fact that the article even has a section entitled "Causes"? I did not insert the Friedman quote "as proof they are right" but because the section made a monetarist analysis of the situation and needed an introduction to monetarism. I could consign Friedman to a footnote, but the section would still need such an introduction--and new material about alternative theories, if there are any.

While we are talking about POV, it is peculiar that the three recommendations for Further reading are all Steve Hanke and the Cato Institute. As two of the three references are already present in footnotes, this section perhaps should be deleted. Spike-from-NH (talk) 12:19, 23 April 2012 (UTC), 20:30, 22 April 2012 (UTC)

---

I did remove Further reading as explained above, and am now de-emphasizing Milton Friedman, and omitting the paragraph on the "violence trap," which has little to do with hyperinflation. But again, that section is a monetarist view of the situation and must begin by setting the monetarist stage. Alternate views could be presented nearby, if they exist; the Robert Solow quote above is not an alternate view but a wisecrack. Spike-from-NH (talk) 12:00, 24 April 2012 (UTC)

---

There are most certainly alternate views. One I know of is MMT as developed by the economics department at UMKC. I do not feel confident to write up that view myself, but in rough outline it is that hyperinflation causes money creation, not the other way around, and the cause of the inflation is a failure to enforce the tax laws that give money value (when citizens know they can evade taxes, they have no need for the government's currency, especially if they have access to some other currency with which to settle their debts). Massive "printing" is the government's attempt to keep up with the inflation which it needs to do to provision itself and pay its debts. The solution is not to stop issuing currency, but to enforce the tax code, which incidentally will shrink the money supply but more importantly will increase demand for the currency and a desire to save in that currency. Baon (talk) 07:22, 11 November 2017 (UTC)

It’s easy to see the WOKE influence in editing over time. Those of us cognizant during the period in question know exactly the causes. 98.97.3.102 (talk) 14:23, 3 January 2024 (UTC)

Currency versus money

@Wikiumvirate: adds a section to the article, which @Vanamonde93: reverts — correctly, in my opinion — as it is essentially advice to editors that belongs here on the talk page. The section made the monetarist point, if I may exaggerate, that "money" is properly a store of value whereas "currency" is that fluff that does not work as a store of value.

This article is solely about the Zimbabwean dollar and about prices denominated in it. If someone wanted to edit the article so that the unit was described as a "currency" and the word "money" was only used to describe the ideal, that might work, or it might be POV, using one term for the Good Guys and one term for the Bad Guys. Moreover, the ideal does not exist: Even nations with a Currency Board whose mandate is limited by statute do not have an immutable commitment never to rewrite the statute. Spike-from-NH (talk) 14:01, 31 May 2014 (UTC)

New polemic

After my revert of 2PensAndAPhone, he urges me on my talk page to "Please stop deleting large amounts of content." I deleted nothing but the large amounts of (polemic, unattributed) content that he added. He also states — twice! — "Not everything in the opening paragraphs of the article is referenced with outside sources. Citations required requests could lead to the removal of these referenced content from the opening paragraphs." I read that as, "you delete my stuff, I will delete your stuff." He adds, "I also know where to get all the exact references. I just do not have the time right now." I have tried to keep this page in good shape, but am leaving this to other editors for disposition. "Outside wikipedia, it is normally better to be reasonable about things." Inside Wikipedia as well. 2PensAndAPhone has an obvious axe to grind. Spike-from-NH (talk) 04:01, 14 December 2014 (UTC)

I made the mistake of trying to improve this article, like for example, remove totally untrue facts from it. That was a mistake as clearly indicated by Spike above. I apologize for visiting this article. I will never visit it again. Please put everything back to what it was before - mistakes and all. 2PensAndAPhone (talk) 04:15, 14 December 2014 (UTC)

@2PensAndAPhone: For your information and future reference, "totally untrue facts" is nonsense. A fact is a statement that is true. That should have been "totally untrue statements". --Thnidu (talk) 20:55, 11 February 2015 (UTC)

Maximum rate

In § Inflation rate, the table gives the rate of inflation in "2008 Mid-Nov." as

• 89,700,000,000,000,000,000,000% [= 8.97 * 10²²]

But the text gives, for mid-November 2008, a rate estimated at

• 79,600,000,000% per month [= 7.96 * 10¹⁰]

Which is it? It's not year vs. month: (7.96 * 10¹⁰)¹² = 6.47 * 10¹³⁰.

To discuss this, please {{Ping}} me. --Thnidu (talk) 21:11, 11 February 2015 (UTC)

I've changed Template:ZWD_inflation to reflect what information was actually available in the sources listed in that section. ♪ Tstorm(talk) 01:20, 13 June 2015 (UTC)

Absurd exchange rate

I just made an edit that reverts an edit made back on 14 November 2015 by 103.226.143.19. The user added about $200,000,000,000,000,000,000,000 to the exchange rate figure, making it $2,621,984,228,675,650,147,435,579,309,984,228 ZWD to $1 USD instead of $2,621,984,228 ZWD to $1 USD. Neither of the two listed sources remotely support this figure. It appears that 24 random digits were added to the middle of the number (the lowest 6 and highest 4 remained the same). If anyone could offer additional feedback on this it would be appreciated.

Human-potato hybrid (talk) 05:03, 11 September 2016 (UTC)

I know this was from a while ago and maybe you got your answer elsewhere as the article described this, but the reason they probably put that is because the Zimbabwe gov reissued currency 3 times through removal of 0s to simplify computation and for optics. If you look at the original currency vs the USD taking these revisions into account you end up needing an addition 24 digits. Rs180216 (talk) 07:53, 24 January 2018 (UTC)

Either way, it's not possible to have 34 significant figures in an exchange quotation and the fact that the first 4 and last 6 digits were the same makes me think it's vandalism, and I haven't seen otherwise. Human-potato hybrid (talk) 04:00, 4 March 2021 (UTC)

@Human-potato hybrid: It seems that the vandalism has travelled into book sources. Compare the 2020 citation at wikt:trillionaire. (The number of significant figures did surprise me, eventually leading me here to check.) Also see the 2017 citation at wikt:multitrillionaire, which exaggerates Zimbabwean hyperinflation even more absurdly, by using scientific notation.

This is concerning. Fake news can now be added to Wikipedia articles citing a seeming RS. Isn't there a Wikipedia page to report hoaxes that make it into RS? I only know WP:CITOGENESIS. --Florian Blaschke (talk) 23:33, 17 May 2021 (UTC)

@Florian Blaschke:"Something that cost one Zim dollar on January 1st cost 7.5e+109 Zim dollars by the end of the year" and where did they even get this from I wonder? Even if they reset their currency multiple times per year this still seems impossible. Even the incorrect figure was "only" Z$2.6e34.

And to clarify the revision, if you look at the edit (which I think @Rs180216: didn't do, no offense to them) then you can see that the guy that wrote the 34 digit figure also made other vandalisms, but editors at the time just corrected those obvious ones instead of reverting or at least checking the actual edit.

Also, I added it to WP:CITOGENESIS, at the bottom. Human-potato hybrid (talk) 21:18, 26 May 2021 (UTC)

Thank you! Yeah, that's the problem: When encountering blatantly obvious vandalism, Wikipedia editors usually don't check the history at all, they just delete the vandalism. And that's exactly how vandals can sneak less obvious vandalism into articles unnoticed. Seen it so many times.

Another trick is to replace something you don't like, even a whole section, with vandalism – the vandalism will be deleted, the text may never be restored. (Bonus: the replacement is done by an IP, the deletion by a signed-in user – if editors check the history after all, but only superficially, they may naively assume that the signed-in user has done everything right and not realise that they have made a mistake by simply deleting the vandalism instead of reverting, so this sneaky form of vandalism or even manipulation stays.) It's really frustrating. This laziness also enables noxious users who aren't vandals in the narrow sense, such as POV warriors and manipulators.

Lesson: When you encounter something suspicious, check the history! And don't simply delete obvious vandalism, but revert it – if necessary (because it's too old) manually, or undo its indirect effects. --Florian Blaschke (talk) 15:48, 31 May 2021 (UTC)

I have the2

million 166.181.82.117 (talk) 16:22, 18 April 2023 (UTC)

I didn't quite understand what was meant regarding it not being possible to have these digits as the exchange rate.

Wouldn't your figure of 2,621,984,228 x 10^3 (1st devaluation 1000:1) x 10^10 (2nd devaluation 10 Bn :1) x 10^12 (3rd devaluation 1Tril : 1) get in that ball park? It's 25 additional 0s against your 10 digit number.

Not trying to be confrontational here just wanting to clear up any potential confusion.

Also wanted to add i do appreciate a lot that you mentioned that you don't think i meant any vandalization or tries to spread misinformation. I really never would but it did make me happy that you explixitly said as much, so thank you for that :) Rs180216 (talk) 05:01, 28 May 2021 (UTC)

@Rs180216:So AFAIK when a country revalues their currency it's basically a triple exchange rate for a time. For example (all numbers here are made up):

1 USD = 1000 ZW1D (Zimbabwe 1st Dollar)

Then they revalue it:

1 USD = 1000 ZW1D = 1 ZW2D

Inflation still occurs as people exchange the currency, so after a while:

1 USD = 50000 ZW1D = 50 ZW2D

After some time, the old currency is no good.

1 USD = 50 ZW2D

So yeah if you revalue multiple times then you will get an absurd rate in relation to the original money, but it's not the actual rate. Germany did not have a billions-to-one Deutschmark exchange rate in the 1970's from the Reichsmark inflation decades before, for example. Human-potato hybrid (talk) 15:26, 6 June 2021 (UTC)

"Natural" or "correct" rates of exchange?

I removed from the section "Historical Context" a statement to the effect that the initial exchange value of the Zimbabwean dollar "did not reflect reality". This implies there is some naturally "correct" exchange value and ignores the fact that every monetary sovereign has the power to arbitrarily declare its currency's value. It also is a not so subtle slur on the government that declared that particular value, implying a lack of intelligence or sophistication. That may be true, but if so, it deserves a proper evidenced discussion, not a backhanded insult and a roll of the eyes slipped in under the pretense of objective reporting. There are reasons why a government might not be able to support the declared value of its currency other than stupidity, cupidity, or naïveté. This is a kind of value judgement, and needs extensive justification. Baon (talk) 06:51, 11 November 2017 (UTC)

I don't see how a backhanded comment, if it even was one since you're attributing intent that you yourself can't substantiate, would constitute a slur. I'd say the allegation you've made should be held to your same standards of evidence. It comes down to interpretation, and you seem to have read that looking for bad intent when the statement could just as easily mean that the rate didn't reflect the real value of the currency. This isn't uncommon, and was even evidenced in this specific case when the government value didn't reflect the value in use like with the bread in the black market example. I can take a piece of paper and say it is worth $10, no one can dispute my ability to do that, but it doesn't reflect the reality that this paper is not really worth $10 if no one is willing to exchange it for goods they could buy for $10 or allow me to tender it for $10 for a debt or other use. Rs180216 (talk) 08:00, 24 January 2018 (UTC)

Wikipedia Ambassador Program course assignment

This article is the subject of an educational assignment at Indiana University supported by WikiProject United States Public Policy and the Wikipedia Ambassador Program during the 2011 Spring term. Further details are available on the course page.

The above message was substituted from {{WAP assignment}} by PrimeBOT (talk) on 16:22, 2 January 2023 (UTC)