Remember that Zimbabwe redemoninated in mid 2008 and took 10 zeroes off the bills, and it hardly seems worth mentioning but they took 3 zeroes off in 2006. That makes this new bill 1,000,000,000,000,000,000,000,000,000 which may or may not be 1 nonillion dollars. It's a lot of zeroes, I may have missed a few one way or another.
Technically, inflation is indeed an exponential process.
But there's no real need for me to take refuge in the word "technically" when we're talking about 231 million percent inflation. There's nothing technically exponential about that. (Sadly.)
Gee, it's a good thing I don't know crap about monetary policy, or else I might think measures like this are just putting a bandaid on a bad situation rather than addressing the fact that Zimbabwe is under the control of an incompetent authoritarian dictator.
Mugabe wasn't horrible, and that's what's sad about all of this -- the land reform was a populist grab that was initiated when he started losing his grasp on the country. He's shown over and again that he's willing to put his position above the interests of the country in the last few years, and that's what'll make him go down in history as a despot rather than a hero.
What data set are you using? I got $12.39 (for $1 inflating from 1930-2009; $24.20 for $300 deflating backward in time) using the standard data set at Tom's Inflation Calculator: http://www.halfhill.com/inflation.html
Honest dumb question: If I had a Z$100 trillion note today and held it for 10 years after which time Zimbabwe made a modest comeback (hopefully) what would determine the value of that note then? Perhaps it'd be worth $10000? Or does the new government of the recovering nation just scrap all of the old currency and tell any note holders to cash in the old notes by such a date or they'll be worth nothing? What happens to hyper-inflated currencies in recovery mode?
The amount of specie in circulation, divided by the assets that back that specie.
Perhaps it'd be worth $10000?
That would represent massive deflation. Normally, governments print enough specie to at least keep up with the asset growth that backs it. If not, they might require massive taxation (recovery of existing specie) to cover their costs.
The article notes the security features being used in the new banknotes. Why would they bother? In a month, they'll be worth less than the paper they are made of.
Germany solved their hyperinflation problem in the 20s by backing up the currency with land. I wonder if Zimbabwe will have to do the same. That would be ironic.
