The Archive

Inflation nation

Now I’m not exactly Adam Smith and I won’t be winning any prizes for economics in the near future, but come on Zimbabwe’s economists, sort it out.

The place is falling apart.

How do we know? Well, the first clue is the way in which the government is diddling the figures.

Now we’ve all done it once in a while. The numbers don’t look good. So we tweak them a little to make it all look ok.

Problem is, in Zimbabwe, the inflation figure AFTER THE TWEAKING is declared to be 4,500%.

That’s right, they want to cover up their inflation problems by pretending it’s only 4,500%. In fact, the actual rate is claimed to be 10,000%.

That’s a lot worse, for sure. But do we feel more confident in an economy with 4,500% inflation? I think not.

The good news is, they’re addressing the problem. Now, I realise neither you nor I are economists (unless Richard is reading this I guess) but let's see if you can pick the correct response to these rampant price rises.

Remember, the problem is that prices in the shops are rising so rapidly, cash is becoming obsolete and people are left unable to afford anything as their savings devalue in front of their very eyes.

What do you think the solutions is? Is it…

a) Devalue your currency by knocking a few 0s off, implement strict economic controls and hope for the best.
b) Suggest your entire nation starts shopping in neighbouring countries instead.
c) Get all shopkeepers to cut their prices and sell their goods at a loss by threatening to shoot them.

If you guessed c) you too could be working for the Zimbabwean economic ministry. Congratulations.

Now if you’d like to turn your attention to the 80% unemployment…

posted by Peter The Great @ 9:40 AM