Monday, May 15, 2006

The magic of Zimbabwean inflation

We have posted on the evils of the Mugabe regime and their debasement of currency by cranking up the printing presses. Now we have been sent the following little essay that shows some of the absurdities of living under an inflationary regime.
The day is very hot and you are passing the Keg and Sable in Harare, so naturally you go in for a nice cold beer. The barman informs you that One beer now costs 150 000 Zimbabwe dollars. You can pay with three crisp new $50 000 notes, still damp from the printing press. Or, if you are feeling a bit bloody-minded, and if you can still source the coins you can sit back and enjoy a beer while the barman counts out 15 000 000 Zimbabwe one cent coins But hold it! We have a problem. Each Zimbabwe one-cent coin weighs 3 grams So this little lot weighs in at: - 45 000 000 grams - Or 45 000 kgs - Or 45 Tonnes !!! After humping 45 tonnes of coins into the pub you are going to need a helluva lot more than one beer to cool down. But don't panic - we have a plan. Like all brilliant ideas this one relies entirely on its simplicity. Plan B: We sell the metal and drink the proceeds There is a small legal question about smelting coin of the realm and exporting the resulting brass ingots. However we'll let the buyer worry about that one. There doesn't seem to be an international price for brass. Its main ingredient, copper, has recently been selling for an all-time high of US $ 5 200 a tonne on the London Metal Exchange, but we won't be greedy. For a quick sale let's discount it to U S $ 2 600 a tonne. We are now the proud owners of US $ 117 000 !!! But we still can't buy that beer as the Keg is only allowed to accept Zimbabwe currency. We must resist the temptation to change our money on the lucrative but illegal black market. So we change at the prevailing interbank mid rate which is