Aren't you glad you don't live in the US, err, I mean Zimbabwe Oct 14, 2007 - 10:03 AM
Interesting article on inflation in Zimbabwe. Here's an excerpt:
"HARARE, Zimbabwe, April 25 How bad is inflation in Zimbabwe? Well, consider this: at a supermarket near the center of this tatterdemalion capital, toilet paper costs $417. No, not per roll. Four hundred seventeen Zimbabwean dollars is the value of a single two-ply sheet. A roll costs $145,750 in American currency, about 69 cents. The price of toilet paper, like everything else here, soars almost daily, spawning jokes about an impending better use for Zimbabwe's $500 bill, now the smallest in circulation. But what is happening is no laughing matter. For untold numbers of Zimbabweans, toilet paper and bread, margarine, meat, even the once ubiquitous morning cup of tea have become unimaginable luxuries. All are casualties of the hyperinflation that is roaring toward 1,000 percent a year, a rate usually seen only in war zones." Think this can't happen in the U.S.? Think again. Our currency is losing value in comparison to other currencies. China owns a trillion dollars of our debt. The Fed has dropped the interest rate by 50 basis points and injected 300 billion dollars into the system to artificially "save" the system. What do you think this will do to the economy? Any ideas?
I admit, I am like William Hung in American Idol, I have no professional training. I do all this through my own personal research and just thinking about things. But isn't that what blogs are all about? I say what I damn well please and you are welcome to take it or leave it.
I certainly don't know enough to predict if we will ever have a situation even close to Zimbabwe, but consider this: our currency is now worth half the value of the British Pound. What happens when it is worth a third? A quarter? Have you noticed your grocery bill lately? How about gas? You think $5 gas is impossible? What happens when foreign investment leaves the US because they know that anything they invest will be worth less a year from now? How does that affect you?
One good sign: house prices are dropping. Which may be good if you are a first time home buyer. Lousy if you are, like me, a home owner.
On a happy note, the Rockies are two games away from the World Series (Thanks Peter for keeping me up to date), and Al Gore won the Nobel Peace Prize for his work on global warming. Whoohoo!
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