Zimbabwe’s Currency Crisis: the worthless $100 trillion bill

Zimbabwe’s Currency Crisis: the worthless $100 trillion bill


This video is sponsored by Ting. Start paying only for the data you actually
use and get $25 off with the link in the description. Life in Zimbabwe has never been easy. Since its independence, the Southern African
country has seen factional violence, international sanctions, and rampant political instability. But in the mid 2000’s, it lost something
even more fundamental: its currency. Surviving meant waking up as early as 2 in
the morning, trekking to the nearest ATM, and then waiting in line. On a good day, you’d be able to withdraw
the equivalent of about one or two US dollars – the maximum allowed by the government. Or, you might find, after losing sleep and
waiting for hours, that no more money was left. That’s because, around 2007, Zimbabwe experienced
the second highest inflation in history, after Post-War Hungary. It’s hard to know exactly how bad it got,
as the government stopped reporting numbers after 100,000% inflation, when a loaf of bread
cost 30 billion Zimbabwean dollars. Employees stopped going to work when their
annual salary wouldn’t even pay for their bus ride home. And vending machines were put out of service
– unable to hold the billions of coins that a single can of soda would cost. To keep up, the central bank kept printing
bigger and bigger banknotes – a million dollars, one hundred billion, and, finally, one hundred
trillion – worth a whole 40 US cents. So, how did Zimbabwe get here? And how did this devastating economic crisis
help launch Africa’s financial technology revolution? Zimbabwe is home to the largest waterfall
in the world: Victoria Falls – over twice the height of Niagara, and whose tumbling
water can be heard 40 kilometers, or 25 miles away. Further South are the intricate stone ruins
of an 11th century palace city. And savannas everywhere in between hold Africa’s
Big Five: lions, leopards, elephants, buffalo, and rhinos. Unfortunately, few will ever get to see these
wonders. Because, in addition to being blessed with
natural beauty, Zimbabwe is also cursed with an abundance of gold, platinum, coal, and
diamonds. All things which led Cecil Rhodes of the British
South Africa Company to invade the land with the newly invented Maxim Gun at the end of
the 19th century. The company-run territory was almost entirely
governed and exploited by the tiny white minority. Years later, two rival factions emerged: Zimbabwe’s
African People’s Union, supported by the Soviet Union, and the National Union, backed
by Mao’s China. In 1980, Zimbabwe gained its independence
and the National Party won its first election. Almost immediately, with the spirit of nationalism
strong, leader Robert Mugabe began doing what all good dictators do: consolidate power. His army, trained by North Korea under Kim
Il Sung, began murdering dissidents. He granted himself the power to dissolve parliament,
declare martial law, and removed all term limits. Mugabe’s authoritarian rule lasted 37 years,
just 4 short of Africa’s record, and teemed with corruption. He once accidentally let slip that his opponent
had won 73% of the vote in the last election before quickly correcting himself. This insatiable thirst for power had more
than political consequences. In 2000, his government began forcibly seizing
land from white farmers for redistribution. Officially, the goal was to correct for the
country’s unjust colonial past. In reality, the policy help him buy political
support. The effects were devastating. The new farmers usually had little or no experience
and sometimes no interest in agriculture. From 2000 to 2009, total agricultural output
was cut in half, with some farms producing only a tenth as much as before. By wiping out two of its largest crops: corn
and tobacco, land reform both singlehandedly destroyed its economy and decimated its food
supply. Meanwhile, many of its skilled farmers fled
for safety. As farms became less productive and demand
for the little food left rose, so did prices. And fast. Daily inflation reached 98% and Zimbabwe’s
economy totally collapsed. Shops, if they were still open, increased
prices multiple times a day as 12 million people struggled to find food, water, and
power. Now, to slow inflation, a government must
do two things: First, it has to stop printing money. Basic economics says increasing money in circulation
simply decreases its value. Second, and much harder is a government has
to convince people that its currency has value. Mugabe did neither. To fund its involvement in the Second Congo
War, the Reserve Bank kept printing new, higher denominations. But it just couldn’t keep up. The bank spent $500,000 US Dollars a week
ordering new banknotes, which, by the time they arrived from Germany, were already worthless. Twice it redenominated – removing 10 zeros
from all banknotes in 2008 and 12 in 2009 – but, to no avail. Zimbabweans didn’t believe their currency
had value, and, therefore, it didn’t. In other words, prices kept rising largely
because people expected them to. And soon, no more money was left. There just weren’t enough bills to go around. And that’s when Zimbabwe got creative. Like much of Africa, the vast majority of
its population is unbanked. In advanced economies, about 92% of people
have some kind of bank account, but that number is only 20% in sub-saharan Africa. Here, where the number of transactions are
high but balances are low, branch locations and ATMs just aren’t very profitable – leaving
Zimbabwe with 6.5 ATMS per 100,000 people, Uganda with 4.2, and Niger with 1.7, compared
to the United States’ 174 or Macao’s 324. Zimbabweans lacked the infrastructure necessary
to keep money safe or transfer it between people. Not only does this hide the flow of money
– granting cover to criminals and making it impossible for the government to regulate
or tax it, but it’s also physically dangerous. Many who live in cities regularly send money
to family members in the country, requiring they take a one or two day journey themselves
or hire someone to do it for them – and risk having it stolen. But while this lack of banks would ordinarily
only slow the continent’s technological progress, African entrepreneurs turned it
into an advantage. What it does have a lot of are phones. In many of it countries, total mobile phone
penetration stands at 80%. These two things allowed countries like Zimbabwe
to leapfrog over checks and credit cards, and then surpass more advanced economies in
mobile payments. In places like the U.S., the ubiquity of banks
and credit cards actually holds back new technologies. Tapping or texting would make sending money
much easier, but first, you and I need the same app. Hence why there are so many competitors – Chase
Pay, Google Pay, Square Wallet, PayPal, Apple Cash, Cash App, Zelle, and Venmo. The hard part isn’t building the app, it’s
hitting a critical mass of users. In Africa, the selling point was obvious:
Either take a two day bus ride, or send a text. And because many of its countries are dominated
by a telecom monopoly – that company can ensure quick and universal adoption. In 2007, for example, Kenya’s largest mobile
network operator, Safaricom, launched M-PESA, ’m’ for mobile and ‘pesa’, meaning
money. Each M-PESA user is associated with a SIM
card, allowing them to text anyone else money. There’s no charge to sign-up or deposit,
and fees are minimal. But what’s truly revolutionary is that it
doesn’t require a bank account. To deposit or withdraw, you simply find an
agent – over 100,000 middle-men who get paid to collect and then bring cash to banks, or
take out cash for when users withdraw or transfer money. It’s so convenient that it’s used for
almost everything – school fees, water, electricity, food, and so on. In Zimbabwe, the preferred app is called EcoCash,
which in 2017, had 6.7 million users compared to its two million bank accounts. That year, the Reserve Bank reported digital
payments accounted for 90% of its $97.5 billion dollars in total transactions, making its
economy virtually cashless. Even digital currency, however, isn’t immune
to political incompetence. As a landlocked country, Zimbabwe relies on
its powerful rivers for water and electricity. The Kariba dam alone provides over half of
the nation’s electricity, making its frequent droughts extremely dangerous. In July, Econet generators failed to start
after a power outage, disabling its mobile payment platform, and, therefore effectively,
the national economy. Lifting a nation out of poverty is so difficult
not for a lack of resources but rather because solutions require deep, political changes. To rebuild its economy, Zimbabwe must first
manage its inflation. To manage inflation, it has to build confidence. And to do that, its government requires reform. That hope came in 2017, when Mugabe was deposed
after nearly 4 decades of economic ruin. Fear promptly returned when this year Zimbabwe
reintroduced its Dollar and inflation again, began increasing. Yet, even while countries like Zimbabwe and
Kenya clearly still have plenty of unresolved challenges, they’re also model examples
of how those very same challenges are the necessary ingredients for innovation. Mobile money is, at best, a convenience for
most of us. But for the world without bank accounts, it’s
life-changing. By making transactions faster and more secure
– apps like M-PESA literally increase the value of money. Theft is reduced, there’s less waiting in
line or time spent delivering money, credit is more accessible to entrepreneurs, it increases
savings, and improves accountability. Africa is the world-leader in mobile money
precisely and only because it previously had so far to come. And as the youngest continent, on the receiving
end of massive amounts of loans, its financial revolution is just the beginning. What’s genius about M-PESA is how it piggybacked
on existing technology – phones were widespread, and SIM-cards and carriers were well established
in Africa. Likewise, the expensive part of cell service
– towers and equipment has already been built by big companies like T-Mobile and Sprint. Ting can help you save money by using those
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to you for watching.

100 comments

  1. If I found out my country had oil or diamond fields, I would dump all the most toxic and radioactive waste on top of them before anyone started getting some smart ideas.

  2. Zimbabwe used to be called "The Breadbasket of Africa". Then they seized the land from the farmers, and utterly destroyed the whole country in the process of "redistributing wealth".

    It's almost like socialism doesn't work… Will the dumb far-left bigots ever lean this lesson? 🤔

  3. This comment section is horrible these people are white they have never been to Zimbabwe I am Zimbabwean and this trillion dollar thing happened years ago this isn’t happening anymore so if you don’t know anything keep you mouth shut because your offending people .

  4. This is what happens when black folks gain control of a nation where white people reside ….they take EVERYTHING from the whites & destroy the nation.

  5. Tell this guy who is getting rich selling the 100 Trillion dollar Zim, Iraqi dinar and African dong to desperate people, including me, after hearing his spiel “It will change your life.” Yes, I have a 100 trillion dollar Zim bond note and cannot even pawn it – Cost $112.00. Today, they are going for $74.00. MarkZ says a “RV” or revaluation is about to happen which will cause dead currencies to become worth much money.
    https://youtu.be/wPr0CS_EyYo

  6. I mean allowing your country’s influential inflation to become this way is the reason why other countries take powers away from governments

  7. Two things, Zimbabwe denominated its currency 3 times, you missed 2006 when 3 zeros were removed, also, towards the end you said that Mugabe was removed in 2007 instead of 2017. Apart from those, this is well researched and instructive. Well done.

  8. The countries of Africa are such jokes. The people in power are idiotic and can’t even cover up their corruption if they tried. I hope things change, but it only will if we give the people proper education.

  9. It doesn't lose value as it is printed, it loses value as it is SPENT. During hyperinflation the government will beenefit the most. This is because the money that is most recently printed has the most power as it is first spent. When that money trickles out to everyone it loses value. Inevitably the poor people get the money last. They always get shafted.

  10. The land was so rich..the people and their leader are dick..if only chinese own this land..it will become economic superpowers.

  11. Why is it that they invaded Zimbabwe, but the invaders are just characterized as "white." There are like 30 countries that are white. All with different histories and cultures. If the Polish invade Bolivia, it is not a white invasion. It is a POLISH invasion. Spineless virtue signaling to blacks about how awful white ppl are. Never mind that Polymatter only employs white ppl.

  12. How much is your salary?
    He: 1,00,00,00,00,00,00,000
    What the fuck you do? CEO of any giant company or are yoh telling networth of your company??
    He: waiter in restuarant.

  13. What a shock, an African nation that once had help from European nations but said no no we dont need help get out of our contry and now….. we send billions yearly to feed and water Africa! Hasnt it clicked that black Africans arent very good at creating 1st world countries! When we came to Africa they were between 500 and 1000 years behind us technologically its not like we were meeting equals. Most African countries with any kind of infrastructure was built by us! Or Germany or the Dutch! Now they have to beg us on tv daily for EVERYTHING! And have our governments send BILLIONS!! 15 billion fron the uk government in cash annually and that is increasing fast. You can say go away we dont need you but then say but we'll take your money! Does Africa need our help?? Yes! But throwing cash at them has and is a failure! Nothing has changed. They need help with education, technology, politics etc. We could help them by showing them how to get the best from the land and whatever resources lie underneath which is huge but before that they need bringing mentally into the 21st century. Theyre behind us mentally and thats not racist its just fact. We need to look at a long term plan that doesnt include billions of pounds and sorts out the brutal corruption going on in almost every African nation even SA since blacks got into power. Help them yes but throwing money at them isnt helping them its simply lining the pockets of the leaders and the officials

  14. Man this makes me ashamed to be black. How come we cant make a country worth a damn and give our people infrastructure, is that too much to fucking ask

  15. 6:06 The Macau flag you said is actually Hong Kong´s flag Macau´s flag is:

    https://www.google.com/searchq=macau&rlz=1CAEAQE_enUS829US829&oq=Macau&aqs=chrome.0.0l6.1780j0j7&sourceid=chrome&ie=UTF-8

  16. "Angel Falls in Venezuela, generally accepted to be the highest waterfall in the world. Tugela Falls in the Drakensburg, South Africa. The Victoria Falls, with its maximum drop of 105 metres, does not even make the top 100."
    What the fuck, dude. Do your fact checking. Otherwise, very interesting if all things otherwise are accurate.

  17. Hey guys these trillion currency is now banned and introduced USdollar as their official currency by changing name as zdollar.

    Why did he missed this point in video???🙄🙄

  18. So what you’re telling me is that it probably costs about 11 quadraticequationillion times more to print the money than the money’s worth?

  19. Can someone explain how the road at 7:35 works? Is the other side of the road just there? Is the van and the car with the camera driving on the wrong side?

  20. I think government should sell this country to any other good country. Land is not important than people. Get food and development.

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