Not too surprising. Zimbabwe has been FUBAR for a long time. 

This did get me curious about the Zimbabwe dollar (I recall a while back them issue ludicrous notes like 100 trillion dollar notes or something) and it looks like Zimbabwe actually has no official currency and 8(!) currencies as legal tender :o

https://www.bbc.com/news/world-africa-26034078

The multiple currencies seems to me to be an opportunity for

a) entrepreneurial checkout chicks and bartenders to make a few dollars on conversions. "No US$? I have some in my pocket right now!"

b) an EFTPOS system that does currency conversions at POS.

But gotta agree with Christopher Mugaga.  "Bringing on board more currencies will not change the trajectory of any economy,"

Where *has* all of the Zimbabwean money (not the actual coins; rather the value from what they produce) gone? Surely they must have produced something over the last few decades? Or did Mugabe bleed the economy white into Swiss bank accounts? Or was it stripped bare by the whites under Ian Smith and/or the British Empire? Are the current government trying to get it working again, or just siphoning off what they can get before it dies completely?

amiga500:

 

The Zimbabwe currency is pegged to the US dollar (officially anyway!) and a litre of petrol now costs US $3.31 or NZ $4.84

 

Not pegged , it is the US dollar, ( or any other hard currency")

"Zimbabwe abandoned its own currency in 2009 after it was wrecked by hyperinflation and adopted the greenback and other currencies, such as sterling and the South African rand.

But there is not enough hard currency in the country to back up the $10 billion of electronic funds trapped in local bank accounts, prompting demands from businesses and civil servants for cash which can be deposited and used to make payments."

"With less than $400 million in actual cash in Zimbabwe according to central bank figures"

https://www.iol.co.za/news/africa/zimbabwe-plans-new-currency-as-dollar-shortage-causes-economic-chaos-18798249

Fiat currencies only have the value that people place in them and it sounds like the banks have been running Ponzi schemes with their EFT transactions creating more credit that they could safely back up with capital (which should usually be between 5-10%)

When this happens in a banking system the value of money  ( i.e its ratio to tangible goods) falls (via high inflation) and you end up getting funds out with Wheelbarrows..... (Zimbabwe has been here before, along with Weimar Germany, Venezuela, Yugoslavia etc ) 

Once it starts its really hard to stop and it totally wrecks the economy... 

frankv:

 

Where *has* all of the Zimbabwean money (not the actual coins; rather the value from what they produce) gone? Surely they must have produced something over the last few decades? ....

It was diluted to oblivion.

Zimbabwe used to be the bread basket of Africa with productive farms providing food, exports and employment. The land was "taken back" from entrepreneur white farmers and given to the tribes who failed to keep them producing. Where the farms were still running, the government interfered in the crop planting cycle timelines and generally caused famine.

The countries income dried up, taxes dried up and the government responded by printing money, which caused inflation.

Slight simplification here, but think of a dollar as a beer voucher and the economy as a brewery. Then imagine that a government prints beer vouchers in response to the brewery's output dropping from 2 million beers to 1 million beers through a lack of ingredients, so now you have 1 trillion beer vouchers but only 1 million beers. There is only 1 million beers to go around, but there is 1 trillion vouchers, so now a beer voucher is only worth 1/1,000,000th of a beer. The vouchers value has been diluted by inflation and the vouchers are worth more as fire starters and pillow stuffing than anything.

The governments job is to remove the impediments to making beer, but Zimbabwe impeded the production process. People are now using Budweiser beer vouchers because they are still worth 1x Budweiser.

Now think about this in an New Zealand context - the confusion caused by the Crown Estate being under the management of D.O.C. and pseudo environmentalists wanting to shut down farms and mines and the impact this would have on the economy. Robert Mugabe was very popular early on, but popular is no substitute for competence. You need to consider the competence of government.

tripper1000:

 

[snip: good explanation, thanks. But then...]

 

The governments job is to remove the impediments to making beer.

 

Actually, the government's job is to ensure that everyone gets some beer. Usually, but not always, that will be to remove the impediments to making beer.

frankv:

 

Actually, the government's job is to ensure that everyone gets some beer. Usually, but not always, that will be to remove the impediments to making beer.

It makes a difference which way you order those two, which is what lead to Zimbabwe's problems. There is a balance to be stuck - you can't share beer that you haven't made and if you give too much beer away, costs go up while sales go down and the brewery goes broke which puts you back at you back at the start - you can't share beer that you haven't made.

The guy giving away the most beer will always be most popular, but it takes a competent person to make beer. Competence followed by compassion should be your yard sticks when choosing leaders.