Six percent inflation sound scary? Try a billion percent…
Today's Financial News - Posted February 3, 2009
If you thought America’s future was bleak, take a look at the horrific situation in Zimbabwe. The country is forced to take dramatic action just to stay alive.
By Andrew Snyder, TodayFinancialNews.com
Baltimore – (TFN): When America’s economy is falling, it is easy to say we have lost our superiority, or our country is permanently damaged, or even look inside another set of borders and think life would be greener on the other side of the fence.
But when we take a look around and truly measure what is going on across the globe, the land of the free and the home of the brave does not look so terrible. It looks downright fantastic when compared to the horrific mess in Zimbabwe.
Here in the States, we think an unemployment level of 7.2% is painful. In Zimbabwe, less than that figure are actually employed. The Africa country is currently faced with a jobless rate of 94%.
I cannot blame folks for not creating jobs or searching for work when their next paycheck will be nearly worthless. With an official inflation rate of 231 million percent and unofficial rates in the billions, it does not pay to work. I doubt too many employers are handing out billion-percent raises.
Thirteen-digit loaf of bread
The failing country just announced that it will officially cut 12 digits from its currency’s valuation. In other words, the country’s latest note, a 100-trillion Zimbabwe dollar bill, will be worth just one dollar. I hope nobody owed you any Zimbabwean debt.
Currency stability is a fundamental government obligation, but maintaining the health of its citizens must come first. Unfortunately, that is not the case in Zimbabwe. Without a sound infrastructure system, cholera is devastating the politically ravaged state. Some 65,000 people are infected, with nearly 3,000 deaths to date. There is no end in sight to the epidemic, but many hope something begins to change in just a few days.
On February 13, the country will get a new government. Long-time power figure, Robert Mugabe, will not step down, even with incredible international pressure. But he has paved the way for a power-sharing political system.
The new coalition government, with Morgan Tsvangirai in the prime minister position, has an incredibly tough road ahead, especially considering the international sanctions currently placed on Zimbabwe. With evidence of political progress, many of those sanctions will likely be lifted, increasing the country’s long-term viability.
Until then, the suffering will continue. It is tough to complain about the American political system and the country’s economy when fellow humans are in such dismay.
Hopefully, our citizens can learn from the mistakes of Zimbabwe and vow to ensure politics never dictate the economy. Unfortunately, that lesson has not hit Washington. As you read this, they are busy re-writing the nation’s economic future, with all the political motivation that put Zimbabwe in such a dire position.
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