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InsiderOnline Blog: December 2008

Second-Worst Inflation Ever

Since 2001, employment at Zimbabwe’s central bank has increased from 618 to 1,360, yet the bank still cannot calculate the inflation rate in Zimbabwe. Cato Institute scholar Steven Hanke has developed a measure based on market prices, and he calculates that Zimbabwe’s inflation rate now stands at 80 billion percent per month. That means prices in Zimbabwe are doubling every 24.7 hours. But that only makes Zimbabwe’s hyperinflation the second worst of all-time. The worst hyper-inflation of all time occurred in Hungary in 1946 when the inflation rate hit 13 quadrillion percent per month. Hanke thinks Zimbabwe may overtake that rate within a month or two.

Will Zimbabwe’s dictator, Robert Mugabe, last that long? The economic collapse has led to an epidemic of cholera, and that may give South Africa and other African nations reason to consider intervening forcefully in the political struggle between Mugabe and opposition leader Morgan Tsvangirai. According to South African authorities, the Limpopo River is now ridden with cholera. The Limpopo forms the border between Zimbabwe and South Africa, and flows east from Zimbabwe into Mozambique.

By the way, in 2008, Zimbabwe had the third worst score in the world on the Heritage Foundation/Wall Street Journal Index of Economic Freedom, ahead of only Cuba and North Korea.

Posted on 12/08/08 04:06 PM by Alex Adrianson

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