Zimbabwe and Hyperinflation: Who Wants to Be a Trillionaire?

How would you like to pay $417.00 per sheet of toilet paper? Sound crazy? It’s not as crazy as you may think. Here’s a story of how this happened in Zimbabwe. Around 2000, Robert Mugabe, the President of Zimbabwe, was in need of cash to bribe his enemies and reward his allies. He had to be clever in his approach, given that Zimbabwe’s economy was doing lousy and his people were starving. Sow what did he do? He tapped the country’s printing presses and printed more money. Clever, right? Not so fast. The increase in money supply didn’t equate to an increase in productivity in the Zimbabwean economy, and there was little new investment to create new goods. So, in effect, you had more money chasing the same goods. In other words, you needed more dollars to buy the same stuff as before. Prices began to rise -- drastically. As prices rose, the government printed more money to buy the same goods as before. And the cycle continued. In fact, it got so out of hand that by 2006, prices were rising by over 1,000% per year! Zimbabweans became millionaires, but a million dollars may have only been enough to buy you one chicken during the hyperinflation crisis. It all came crashing down in 2008 when -- given that the Zimbabwean dollar basically ceased to exist -- Mugabe was forced to legalize transactions in foreign currencies. Hyperinflation isn’t unique to Zimbabwe. It has occurred in other countries such as Yugoslavia, China, and Germany throughout history. In future videos, we’ll take a closer look at inflation and what causes it. Subscribe for new videos every Tuesday! http://bit.ly/1Rib5V8 Macroeconomics Course: http://bit.ly/1R1PL5x Ask a question about the video: http://bit.ly/2hNkAFy Next video: http://bit.ly/2j4niXI

Comments

1. i like that rapper 50 cents or as they say in Zimbabwe "100 billion dollars"
2. This video really scared the shit out of me! 1USD bought quadrillions of Zimbabwean dollars! WAKE UP PEOPLE.
3. This might be a very stupid question, but when you have money printing machine, can't a president print money for himself to pay his country's debts and not have that money go in the economy? I hope you understood what I was trying to ask.
4. What about the negative effect of the US led economic sanctions on Zimbabwe ? Why the omission marginal revolution? How convenient
5. keynes approves
6. He was economically illiterate
7. is there any way of eradicating inflation because more money is vicious i have heard ppl are saying virtual currency is a way to counter inflation and many things so is our future gonna be bitcoins or every country with thier own online currency im asking this as a question
8. 4:20 mins long?
   
   
   
   
   Challenge accepted. 🍀🚬😏
9. All the money printing is the Inflating. Inflation is inflation of the money supply, not prices. Rising prices is not inflation, but rather due to inflation (of the money supply).
   
   Otherwise a riveting video, btw.
10. Why don't more countries fix their currency to a more stable currency, the way Panama does with the US dollar? Is there a downside to that practice?
11. Yes, we all know about Zimbabwe and hyperinflation.
12. Lol, spotted Philip Chiyangwa's fleet at 0:46. Just an all around great guy that one.
13. Nice thing for the USA is that oil is usually traded in US-dollars. So theoretically, they could print as much as they need for oil, always.
14. a I've always maintained, the the greatest challenge is corruption, just look at most developing countries around the world, all the failed presidents who left their countries in worse financial condition than when they took office, but left far wealthyier along with those who help put him in office. too many affluent educated people promise the world but never deliver the goods, the real bad people are those developers who build large facilities and roads that do nothing to help the people out of poverity. So until private institutions start acting responsible instead of only enriching their stock holders and themselves, corruption will continue everywhere we see unnecessary development that only serve those in power...thank you, peace
15. This is what happened when you give someone printing machine, but you don't teach him basic economics.
16. much love from Zimbabwe!
17. Wouldn't it be more acurate to say that inflation is caused by the disparity in value between the supply of money and the amount of production - more money in circulation than justified by the amount of production? An increase in money supply in and of itself would not cause inflation if its accompanied by the equivalent increase in production, correct? The money supply has to grow at some point.
18. Nice topic choice!
19. Mugabe >> stupidest dictator for 2016
20. Missing in this version . . .
    How does going from 1million kwacha per dollar becoming 1 billion kwacha per dollar benefit Mugabe?