Hyperinflation in Zimbabwe
Hyperinflation is when prices increase rapidly as currency loses its value. Hyperinflation is mainly caused when there is a large increase in the money supply not supported by the Gross domestic product growth. This causes an imbalance in the supply and demand for money. When there is an extreme rapid growth in the supply of paper money, this result because of monetary and fiscal authorities of a nation issue large amounts to pay for government costs. In the event of hyperinflation the growth in the output of goods and services is exceed the money printed out. The citizens of that country lose total confidence in the money because of its decreasing value. There are many examples of hyperinflation in history but the most current case of hyperinflation in an African nation of Zimbabwe. When Mugabe lost poll on a new constitution in 1999, he decided to destroy the resistance by seizing the commercial farmers who formed the financial backbone of the opposition movement. This attack on property rights of farmers wiped out Zimbabwe’s export earnings and sent there economy on a downward spiral. Land titles became worthless and could not serve as collateral. The banking sector seized up. Gideon Gono, the Governor of the Reserve Bank of Zimbabwe, stepped in and released the printing presses. By doing so lead to the second greatest hyperinflation in history estimated to have reached 90 sextillion percent in 2008. Living standards tanked, the average life expectancy for men fell to 37 years and for women to 34 years. Unemployment skyrocketed to between 85 percent and 90 percent. Then the cholera outbreak in 2008 killed thousands sending the message that Zimbabwe was failing as a country. The Zimbabwean economy is characterized as unstable and unpredictable, because of excessive government interference and mismanagement of the economy. The country has crumbled under a tyrannical and oppressive regime. There financial system has suffered from repeated crises, and years of