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Too many zeroes spoil the till


Zimbabwe's record runaway inflation of more than 1000% has resulted in the number of zeroes in transactions increasing all the time such that according to The Financial Gazette article its causing problems to computer systems that were not designed to handle such big numbers.

You can imagine a store till that was purchased five years ago and handling bread at say Z$195 in 2002 now being asked four years later to handle the same bread but at a staggering Z$200,000. This is just bread but what about things like lounge suites, let alone cars and houses. Those in Zimbabwe could update me on how much some of these things now cost but whatever they cost now the bottom line is the number of zeroes has increased.

The interesting part are the proposed solutions to all this. What I found most intriguing is the concept of the kilo dollar. The kilo dollar according to a Sunday Mirror article would be worth Z$1000. I think all these ideas are just short term ones because this looks like an economy that needs a long term fix.

tyndale
Or just use US$ as currency . Do you hand in your old notes for the kilo dollar ? Is there money to print new money ?
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Victor M
Unknown to many Zimbos, i heard they are printing lots of the old $1000 dollar notes (N.B. What we are using are not notes but cheques) Maybe they will bring back the notes into circulation with new values.
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MBAREBOY
No statistical management can be done to such a situation where in essence numbers have become meaningless. Those zeroes cease to mean anything in terms of defining economic management.
I believe as said before, while flying in the face of so called independence, identity and sovereignty, a new start should involve turning to stable currencies (internationally convertible) such as the USD, Euro/BP.
Zim is now a net importer, not only for capital equipment and technology, but basic foodstuffs - makes sense to have a complete relook at currency management and convertibility. Before price stability and affordability can even be thought about, it is necessary to look at the whole aspect of the monetary landscape and complexion. How do you put in place inflation management policies in a situation where the highest currency denomination can not buy a loaf of bread? How do you design a currency to facilitate domestic usage in an environment of million prices for even a packet (1 kilo) of salt and relate intrinsic value of the currency to the products it can buy.
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innocent Gwitima
The kilo dollar is not the solution, the solution lies in stabilising the economy which can only be achieved by doing a single thing."CHANGING everyhting" from top to bottom. I think you know what I mean.
Otherwise the kilo dollar will soon be trillion kilo dollars and what next from that.
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sibanda
I also came across a similar document in the Guardian Weekly by Una Bartley.

Here goes:
"Our local shop in Victoria Falls is appropriately named Little Harrods. Like its more famous counterpart in London, it has a distinguished green logo and tends to attract -millionaires.
Since moving to Zimbabwe, I too have become a millionaire, though my new status, or rather its cause (an inflation rate of more than 1,000%), brings with it a set of challenges.

Like most shops here, Little -Harrods no longer takes credit cards or cheques, so before setting out to spend my millions I need to discreetly bag large amounts of cash. A supply of elastic bands helps to secure the two highest denominations (20,000 and 50,000 Zimbabwe dollar bills) into neat bundles of 5m.

Finding anything on the shelves for less than $50,000 is now such a rarity that I feel I should buy it, however obscure it may be. Recent articles picked up on this rationale include a "with sympathy" card, some red shoelaces and a tube of silver glitter.

However, on my most recent trip to Little Harrods, I see that they have invested in one of the fastest-selling products in Zimbabwe - a bill counter.

These nifty machines whirr dollar notes through their insides before spitting them out and flashing up a number. It may solve one headache for the cashier, but as prices at Little -Harrods (and elsewhere) continue to climb, I can't help wondering how long before the tills need to be upgraded to incorporate sufficient zeros to operate in billions"
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Mark
The policy prescription for Zim's recovery is not as elusive as people seem to suggest....back soon.
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MBAREBOY
I was looking at the figures for Meikles Africa at the Zimbabwe Stock Exchange, a clear illustration of how absurd the situation has become, and moreso challenging to the accountants/analysts (dont know how the uninitiated are coping):

net profit of $6trillion, an increase of 2801% from the previous year (talking of zillions soon)

market capitalisation of $65,462,714,000,000.00 (I wonder if you are a Grade Four teacher and introducing money additions to your class for the first time whether you start with $1.00 minus 50cents - the normal way, or $1,000,000.00 minus $500,000.00)

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Wes
I think coming up with these not so fancy ideas like kilo dollars without solving the underlying problems will not get the economy anywhere, it is just like replacing burnt furniture in a burning house with new furniture without necessarily stopping the fire. Then next will it be kilo kilo dollar or maybe tonne dollar?
Mbareboy, a friend in Zim tells me that his Old Mutual shares which he got for Z$24 when Old Mutual demutualised in 1999 are now worth nearly Z$2 million dollars each. What a gain!
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adm
Yugoslavia travelled down the hyperinflation path that Zimbabwe is currently travelling. Like Zimbabwe they also slashed some zeroes from their currency but the results were disastrous to say the least. We will see Gono's new policy takes Zimbabwe.

Check out this article.
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