Peter Bjørn Perlsø wrote:
>
http://www.timesonline.co.uk/article/0,,3-2170099,00.html
>
> "A nation of millionaires who can't afford to buy anything"
It happen in Eastern Europe too after USSR collapse.
The reasons for hyperinflation are a disfunctional economy which
is unable to balance his trade. Mainly you have much more imports than
exports and no real option to go back in balance.
It state very clear in article:
"""
The country's descent into economic chaos came after violent land seizures
led to a dramatic drop in production. Exports plummeted. Foreign investment
dried up. The Government sought to hide its problems by taking out foreign
loans that it could not service, and printing money. The inflation rate is
still spiralling upwards, but Mr Mugabe appears oblivious.
He has a simple remedy to the problem - printing more money. To ensure that
the army, police and civil servants are paid, the Central Bank has said
that it will print another Z$60 trillion in Z$50,000 notes.
......
Instead, Zimbabwe, once one of the wealthiest countries in Africa, will have
to sub- contract some of the printing to neighbouring states, who will
demand payment in precious hard currency, compounding the crisis.
"We are rapidly approaching the point of meltdown," said John Robertson, an
independent economist. "It simply cannot go on, and the Government will be
forced to admit it has failed. Economics may end up doing what politics has
failed to do."
"""
I am afraid that misguided Bush politics of offshoring jobs while cutting
taxes is going to have exactly the same effect. Watch out for Zimbabwe like
situation.