St. Louis CofCC Blog

You’ll have $1 trillion in your wallet if you have ten of these.  The catch is that it would be Zim$1 trillion, which wouldn’t be enough to buy a can of InBevWeiser, much less a whole brewery or a whole poverty law center.

The Scotsman:

Children starve as Zimbabwe’s grain goes to make luxury dog food

THE state-run grain company in Zimbabwe has turned to making luxury dog food, while up to four million of the country’s people starve.
Doggy’s Delight is a new product from the Grain Marketing Board (GMB), the only firm to which farmers are allowed to sell their wheat and maize.

It is supposed to supply millers with grain for flour to make bread. But, in addition to making dog food, the company has announced that it will focus on poultry feeds this year.

Recent figures show Zimbabwe has a 360,000-tonne shortfall of maize – used to make the staple mealie-meal – and a 255,000-tonne wheat shortfall.

That means more than a third of Zimbabweans are likely to need food aid in the run-up to presidential and parliamentary elections in March, according to aid agencies.

With probably less than ten weeks to go before the polls, there are fears Robert Mugabe’s ruling Zanu-PF party will once again offer food for votes – the government has started secretly importing food from Malawi.

The article goes on to say that the luxury dog food is exported, presumably to earn Dictator Mugabe money in a currency that, unlike his own, is actually worth something.

UK Daily Mail:

Forget the glitzy restaurants of New York and London: only in Zimbabwe would a hamburger actually cost millions of dollars.

The central bank of the southern African country has a issued a 10million Zimbabwe dollar note. The move increases the denomination of the nation’s highest bank note more than tenfold.

Even so, a hamburger in an ordinary cafe in Zimbabwe costs 15 million Zimbabwe dollars.

The hope is that such a move will help end chronic cash shortages and disperse long, chaotic lines at banks and automated teller machines.

Reserve Bank Governor Gideon Gono said in a statement the 10 million Zimbabwe dollars notes will be issued along with 1 million and 5 million Zimbabwe dollars bills.

Previously, the highest existing note, introduced last month, was for 750,000 Zimbabwe dollars.

The new 10 million note is the equivalent of about £2 at the dominant black market exchange rate. A hamburger at an ordinary cafe costs about 15 million Zimbabwe dollars (£3).

That hamburger has trebled in price this month amid shortages of bread, meat and most basic goods.

This is how many Zimbabwe dollars were needed to buy a loaf of bread

Zimbabwe faces the world’s highest official inflation of an estimated 25,000 per cent. Independent financial institutions say real inflation is closer to 150,000 per cent.

Acknowledging the inflation crisis, Gono said individuals would be allowed to withdraw an increased limit of 500 million Zimbabwe dollars (£100) in a single daily withdrawal, up from 50 million (£10).

This means you can be a billionaire in Zimbabwe in two days.  However, the new Z$10m note is only worth about US$4, meaning a 2.5m-to-1 exchange rate.  Also meaning that you can also be a Zimbabwe billionaire if you have US$400.

Agence France Presse:

Zimbabweans formed queues at banks on Saturday to beat a December 31 deadline to hand in a currency series phased out by the central bank.

The Reserve Bank chief Gideon Gono declared that the 200,000 Zimbabwean dollar (about eight dollars) would become worthless as he introduced three new banknotes in a bid to tackle a shortage of the local currency in the country.

This is why I don’t buy the “official” exchange rates.  If Z$200,000 is truly worth US$8, then why is such a note “worthless?”  Using my hypothesis that the real conditions are 10-15 times worse than the official figures, then the Z$200,000 corresponds to the 53-80 U.S. cents range.

It might be worse than that, because the Z$750,000 note won’t even buy a burger.

London Sunday Times:

Zimbabwe’s economic meltdown is gathering pace, with inflation spiralling to almost 15,000 per cent, according to figures leaked yesterday.

The 14,840 per cent annual inflation in October was nearly double what it was in September. Prices between September and October rose 135 per cent.

President Mugabe told state media that “Zimbabwe will not collapse, now or in the future,” even as his strategy for beating inflation with draconian price controls lay in ruins.

(snip)

In Zimbabwe, however, the phenomenon of “Mugabenomics” has delivered a three-headed monster — exponentially rising prices, a critical cash shortage, because the Government regards adding new rows of zeroes on the banknotes as an admission of defeat, and virtually nothing to buy in the shops because price controls have destroyed the retail trade.

(snip)

The search for cash is an unrelenting daily ordeal for Zimbabweans, who were paying Z$1.6 million for a bus fare to and from work yesterday, Z$800,000 for a loaf of bread, and Z$700,000 for a pint of beer.

For several months now, I have been posting a daily track of the exchange rate between the U.S. peso and the Zimbabwe Dollar. However, there has been a lot of chatter that these exchange rates didn’t reflect the real conditions on the ground; even as bad as they are, they’re not moving upwards that much from day to day (as you have seen), and they’re not moving upwards enough to reflect Zimbabwe’s real inflation, and therefore, the “official” exchange rates are simply Mugabe propaganda.

Let’s do some math. Using today’s official exchange rate of 30,668 Z$ to US$1, the bus fare translates to US$52.17, the bread is $26.09, and the beer is $22.83. Those figures are way too high even for a gutted economy like Zimbabwe’s, and therefore, the on-the-ground exchange rates are probably 10 to 15 times more than the “official” ones I tracked daily. That said, I’m going to stop the daily tracking — the last thing this medium will do is parrot Mugabe propaganda. I will keep my eye on articles like these for the real story.

As an aside, at the time of this writing, there are two comments on this story at the LST that suggest that these stories are just the white man’s racist propaganda to bring down the superpower that is Zimbabwe:

I have said this before President Mugabe will not be removed from power because of economic subbotage by the western companies in Zimbabwe. He will built a very strong black state in africa controlled by black africans. Zimbabwe is the first nation in africa to produce bio-fuels,100% vegetables seed renewable energy. Zimbabwe will struggle maybe for some months or 1-2 years but it will emerge very strong.

Rusununguko, London, UK

Produce bio-fuels? With what agricultural production after Mugabe expropriated white-owned farmland? If Zimbabwe was the first country in Africa to do so, that’s not a very high hurdle to jump over — and if it did, it was only because of the white agricultural industry it does not have anymore. Also, legitimate bio-fuels are more expensive than oil, so the economies of scale revolving around them won’t turn a country that specializes in them into an economic powerhouse for quite a long time.

And:

The M16, CIA and FBI must be feeling satisfied that their attempts at modern-era lynching of black people is finding fruition. This is a sad tale of British and American governments’ racism against a predominantly black state. We are not amused that this economic conflagration was hatched in the bellies of western intelligence agencies to undermine a legitimate African black government!

Gilbert Phiri, Swindon, UK

If the Anglo-American establishment really wanted to topple the Mugabe regime, it would take all of five minutes for their combined military might to squash Mugabe like the bug that he is. The fact that they have not done that is circumstantial proof that Mr. Phiri’s claims aren’t true.

Today:  30,668
Yesterday:  30,679

Today:  30,679
Yesterday:  30,670

Today:  30,670
Yesterday:  30,675

Today:  30,675
Yesterday:  30,485

Today:  30,485
Yesterday:  30,703

Today:  30,703
Nov. 7:  30,687

Today:  30,687
Yesterday:  30,692

Today:  30,692
Nov. 4:  30,620

Today:  30,620
Nov. 2:  30,690

Today:  30,690
Yesterday:  30,693

Today:  30,693
Yesterday:  30,695

Today:  30,695
Yesterday:  30,660

Today:  30,660
October 26:  30,697

Today:  30,697
Yesterday:  30,686

Today:  30,682
Yesterday:  30,686

Today:  30,686
Yesterday:  30,490

Today:  30,490
Oct. 20:  30,698

Today:  30,698
Yesterday:  30,652

Today:  30,652
Yesterday:  30,686

Today:  30,686
Yesterday:  30,707

Today:  30,707
Yesterday:  30,711

(Prediction:  Tomorrow’s rate will be 30,721)

Today:  30,711
Yesterday:  30,734

Today:  30,734.0
Yesterday:  30,728.7

Today:  30,728.7
Yesterday:  30,695.0

Today:  30,695
Yesterday:  30,725