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What can you even say at this point?
Zimbabwe's chief statistician says he cannot work out the rate of inflation because of the lack of goods in shops.
Here is the sad story. Thanks to Shanley and also Wolfram for the pointer.
Posted by Tyler Cowen on November 28, 2007 at 07:40 AM in Current Affairs | Permalink
Comments
Wow, this story just keeps getting worse. ;-(
Did you see this:
http://amateureconblog.blogspot.com/2007/11/venezuelans-struggle-to-find-food.html
Posted by: Chris Meisenzahl at Nov 28, 2007 7:55:54 AM
"What can you even say at this point?"
We have a sterling example of what will result when someone adopts these kinds of policies. Hopefully it will give other autocrats pause when they think they are immune to the laws of economics.
Posted by: Joe Grossberg at Nov 28, 2007 9:38:28 AM
Time is up for Mugabe. Sooner or later, this situation will become untenable and he will have to step down.
The issue now is probably to find him an exit strategy (e.g:exile)which he could accept and where he doesn't lose face. But how long will it take the international community to step this up? Unfortunately, past experience does not bode well for the people there.
Posted by: Alex at Nov 28, 2007 10:57:00 AM
Time is up for Mugabe. Sooner or later, this situation will become untenable and he will have to step down.
It seems to me more likely that he would be deposed, rather than voluntarily step down. He does not seem like the sort of fellow who knows when it is time to go.
Posted by: John Jenkins at Nov 28, 2007 11:25:49 AM
So where's the hue and cry from the 'humanitarians' of the Western World? Heck I'd be happy if Thabo Mbeki of South Africa would grow a pair and tell Mugabe to straighten up.
Posted by: Christina at Nov 28, 2007 12:41:27 PM
Posted by: at Nov 28, 2007 12:54:31 PM
The economy will not force Mugabe to step down, unfortunately,
Julius Nyere ran Tanzania's ecomony into the ground before letting i
it collapse completely, and still he remained in power. All that
will happen is that the formal economy will cease to exist at all
and a barter economy will take it's place. This is already
happening and the barter economy (or parallel market as they prefert
to call it) is already the dominating economy. The Zimbabwe Dollar
will cease to exist as the country's currency and the Rand and US
Dollar will replace it. Mugabe will stay in charge of a ruined
country because it's people do not have the gumption to remove
him.
Posted by: at Nov 28, 2007 12:59:13 PM
Does anyone here know how a country could solve an inflation problem like this? Things seem beyond repair.
Posted by: Mark at Nov 28, 2007 1:19:41 PM
Mark,
The Zimbawean dollar cannot be saved. The solution will be that people stop using it, as they already increasingly do (this is why the shelves are empty).
Posted by: Yancey Ward at Nov 28, 2007 2:23:05 PM
When do the calls for the white massa's return begin?
Posted by: ricpic at Nov 28, 2007 3:04:19 PM
Now, if only, we used a true gold standard! Sigh! It all seems uncannily exactly what VonMises wrote!
Posted by: Raul at Nov 28, 2007 3:42:37 PM
I guess that makes inflation zero since nothing changes hands. ;-)
Posted by: Lord at Nov 28, 2007 4:09:41 PM
If the government already froze prices where they were, wouldn't that make measuring inflation pointless anyway (the prices can't change by law)?
Posted by: Shannon at Nov 28, 2007 6:11:58 PM
Shannon:
You'd have an official rate of exchange and a meaninful, black-market rate of exchange.
Posted by: Joe Grossberg at Nov 28, 2007 9:51:27 PM
Good story. But where's the hard economic analysis? Why did it happen? Did they put too much money in circulation? Or was it a productivity loss? Both?
Posted by: Nabr at Nov 28, 2007 10:57:26 PM
The inflation rate is not zero, but infinite- goods are no longer
available at any price! Also, the source of inflation is money
supply growth- at 18,000% per year! See
http://hongkongmacro.blogspot.com/2007/11/zimbabwe-cpi-is-now-undefined.html
Posted by: HongKongMacro at Nov 28, 2007 11:43:36 PM
Nabr, do you honestly not know?
They, the Mugabe regime, stole the productive farms from the white people, first. They threatened them and assualted them and then confiscated their property. Then they confiscated more property. Then they confiscated more private property. They looted the bank accounts of the people trying to leave the country, even after they agreed to leave their land behind "to the people". Then they inflicted price controls. More and more price controls. More and more and more while constantly shrinking what was left of any private sector businesses that were allowed to exist. Then they had shortages. Then they seized goods to make up for the shortages. Of course, then they printed more money because they had to pay for all of the people to "buy" the goods they had seized.
The terror hasn't stopped, either.
Posted by: mouse at Nov 29, 2007 12:46:15 AM
mouse:
THats the point. So many dictatorial, autocratic, tyrannical exist today in other parts. Not all of them spiral into supernormal inflation. What was uniquely different this time? Tyranny and injustice, contrary to what people believe, has not always been correlated with economic disaster!
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