Zimbabwe and Hyperinflation: Who Wants to Be a Trillionaire?

Zimbabwe and Hyperinflation: Who Wants to Be a Trillionaire?


♪ [music] ♪ [Narrator] It’s not easy being a dictator. For one, there’s a lot
of other people around you who would love to be you, so you’re constantly worrying
about staying in power. Navigating the gray area
between political rivals and political allies
is a total headache. Plus, there’s
all those pesky people who you’re supposed
to be in charge of. How to give them
as little as possible without inciting rebellion
is a never-ending balancing act. Robert Mugabe,
the president of Zimbabwe, was facing these problems
around 2000. He needed money to bribe
his enemies and reward his allies. Unfortunately, he had taxed pretty much everything
there was to tax, and his policies had
scared away investors. The economy wasn’t doing well and his people were
unemployed and hungry. So, where did he get the money? Well, one of the perks
of running a country is that you get your very own
money making machine — the printing presses. So, in a pinch,
you can just print more money, which is exactly what Mugabe did. The newly-printed money
didn’t increase productivity in the Zimbabwean economy
and there was no new investment. So the economy
couldn’t produce more goods. In effect, you had more money
chasing the same goods. More money chasing the same goods meant that the purchasing power
of the Zimbabwean dollar fell. You needed more dollars
to buy the same stuff as before. In other words, as the newly-printed money
began flooding the market, prices began to rise. Prices began to increase at a rate
of about 50% a year. And that was only the beginning. As prices rose, the government
had to print even more money to buy just as many goods
as before. And so they did. And that is how things
got out of control. The faster prices rose, the more
money the government printed, and the faster prices rose:
a feedback loop. By 2001, prices were rising
at a rate of 100% per year. By 2002, 200% per year.
2003 — 600% per year. By 2006, prices were rising
at over 1,000% per year and it cost 417 Zimbabwean dollars
to buy toilet paper. No, not per roll, Z$417 per sheet. Money was devaluing so quickly that the money you had
in the morning would be worth quite a bit less
by the evening. So people were trying
to get rid of currency as soon as they got it. Zimbabweans became millionaires, but unfortunately,
a million Zimbabwe dollars might buy you a chicken,
if you were lucky. And still the government
kept printing money, and in higher and higher
denominations: Z$1,000,000 notes, 100 million, 10 billion,
100 billion dollar notes. In 2008, prices started rising
by thousands of percent a month and the government started printing
100 trillion dollar notes. At the height of this feedback loop, prices were increasing
at an astronomical rate of 7.6 billion percent a month,
and one US dollar would get you, well, we’re not trying to say it,
but this many Zimbabwean dollars. By the end of 2008, the Zimbabwean dollar
had effectively ceased to exist, and Mugabe had no choice but to legalize transactions
in foreign currencies. The Zimbabwe hyperinflation
was over. Hyperinflations have occurred
in other countries, such as Yugoslavia in 1994,
China in 1949, and Germany in 1923. As in Zimbabwe,
these hyperinflations were caused by governments that were
desperate for cash, but with few means to raise funds
except the printing presses. The Zimbabwe hyperinflation
also illustrates a more general principle that
we will be exploring and testing in greater detail
in upcoming videos. And that is — inflation is caused
by increases in the supply of money. You’re on your way
to mastering economics. Make sure this video sticks
by taking a few practice questions. Or, if you’re ready
for more macroeconomics, click for the next video. Still here? Check out Marginal Revolution
University’s other popular videos. ♪ [music] ♪

100 comments

  1. Thix is all because of western scantions.. those countries which dont allow the western corporate machinery to enter their countries get this scantions.. just like Venezuela ..

  2. To avoid inflation print money but never raise prices for example a business will get a lot more business to make up profits now people have money they will by a dozen items instead of one only raise pay for employees on the clock

  3. What good is it to be a millionaire, billionaire, trillionaire when you can't even afford the daily essentials for living like food. Cash is trash get wise and buy precious metals.

  4. Ahhhh how monatarists like to forget every case of hyper-inflation also has routes in a supply issue. Only together with the money supply expansion has this ever caused hyper-inflation

  5. The time he said paper towel was $417, I was like ( ͡⊙ ͜ʖ ͡⊙)..

    But then he said"per sheet". ( ͡◉ ͜ʖ ͡◉) holy sheet. 😂😂😂

  6. Their were evil forces working against Mugabe. Mugabe mistake was not kicking these rothchild bank out of his country. Most of the business in Zimbabwe were own by foreign forces and they are friends with the central bank. In the game of monopoly, printing more money is consider as cheating. Mugabe printed more money because he was helping his people, but the white elites kept raising the price of their product. They made it look like Mugabe was the bad one. Mugabe was at war with these people that kept raising their product.

  7. Best friend of putin. You dont need to do research to know who these people are and their politics , just look at what countries supported russia in UN voting on anything the whole world regarded as warmongering, literally all who voted with Russia were cunts like Mugabe. Here is just one example https://en.wikipedia.org/wiki/United_Nations_General_Assembly_Resolution_68/262

  8. 0:27 being from south africa, I can confirm that our country was run by a ninja turtle

  9. Mugabe was just plain STUPID, thinking printing more money would automatically increase production in goods and services.
    May be up to 150%-200% GDP deficit but above that would be too much.

  10. Step 1: print money.
    Step 2: repeat step one until your bank notes are only worth their weight.
    Step 3: keep printing because the price can't go any lower than their weight.
    Step 4: ???
    Step 5: trees are not being cut down because the oxigen they replace is worth more than your dollars.

  11. 3:13
    Noone's trying to say it, but that's 2.622 * 10^34 $Z.
    Imagine fitting this amount of smallest possible units of space into a meter.
    You would be a quarter of the way there.
    That's how big that number is.

  12. What if we (any currency) could buy/chance that zimbabwe's 10T bill into USD?

    ZD would gain value in time and we will be rich

    just like we did in bitcoin.?

    Umph. bad idea

  13. So, no mention of the 'G.C.R.', (the global currency reset) or the fact that Digital Assets such as Cardono's 'ADA' shall save the people and curtail the bank's at the same time.

  14. As a way for back up. Its best to save valuable assets like Gold, silver etc. Unlike bank notes, they are not affected by hyper inflation. They guard your wealth in desperate times

  15. And the whole world is heading for a Global Currency Reset and a new Quantum Financial System….hang on folks

  16. Let's go America! Can't even buy things at the dollar store for $1 It's always $1.09 to $2

  17. FKN RETARDED / COMPLICIT HORSESHIT EXPLANATION WHAT ARE WE ALL FKN 12 YRS OLD? THIS IS RIDICULOUS CAVEMAN ASS SHIT

  18. Even international sports was impacted. Zimbabwe used to be a cricket powerhouse, but it got so bad the cricket board couldn't even pay for the players' hotel and meals when traveling, so a bunch of them quit. Zimbabwe cricket has never been the same since.

  19. That large number is: "Two decillions, six hundred twenty-one nonillion, nine hundred eighty-four octillion, two hundred twenty-eight septillions, six hundred seventy-five sextillions, six hundred fifty quintillion, one hundred forty seven quadrillion, four hundred thirty five trillion, five hundred seventy nine billion, three hundred nine million, nine hundred eighty four thousand, two hundred twenty eight" Zimbabwe dollars for one US dollar

  20. I taught the value of USD TO ZWD is just ZWD35 Quadrillion, but in this video it is over ZWD2 Decillion per USD.

  21. Active trade sanctions. Love how they leave that out in this propaganda piece. I wonder what resources they’re stealing this time.
    https://youtu.be/o1MXfT2uaes 👈👈 Peep the game. Trade sanctions= destabilization = “aid” (theft of resources).
    This is what REALLY happens… 🤔 I will wonder why they excluded it?
    America ALONE has over 7,000 active trade sanctions on various countries right now.

  22. its odd yet funny how CNN right now is giving basically a eulogy for Robert's passing but ignoring his massive printing and bankrupting his country's money into a meme.

  23. better to use 417 zimbabwe 1 dollar notes as toilet paper then as you would get more paper than buying actual toilet paper .

  24. I was listening to BBC Radio 2 today with Jeremy Vine interviewing John Simpson. Simpson recalled the day he and some of his fellows were in Zimbabwe during Mugabe`s tenure and out to lunch.
    The price of the lunch – he said – rose four times during the eating.

  25. Yet Robert Mugabe had a very good level of study. He was not a Sudart who could barely read like other dictators. He was probably able to understand monetary explanation. What happened?

  26. 1. Take out a massive loan.
    2. Spend it as fast as you can or buy a stable foreign currency.
    3. Pay back the debt which will now be worth a fraction of the loan you took out in the first place.
    4. ????
    5. Profit.

  27. When ones eyes are on their neighbor's vanity then comes greed and poverty. One should always till his field before he plants and when harvest comes everyone will eat. Africa suppose to have the world's biggest agricultural businesses and if they focus on that no need to buy foreign rubbish….create your own hence they are doing there's

  28. it was actually worse than it sounds, i remember one day i went into checking out cellphone prices when i went back home to get the money after an hour the money thatwas supposed to buy me a cell phone could now only buy me a cell phone battery

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