Zimbabwe's Currency Colapse Gabriel Cruz 10500502.
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Transcript of Zimbabwe's Currency Colapse Gabriel Cruz 10500502.
Why Zimbabwe
• Question: Why are financial institutions importanto Rich people make money by taking money from the pooro Why are they there
• No: Financial institutions are important
Preview
• The country of Zimbabwe• Zimbabwe during the 1990's• Zimbabwe's Land Reform• Consequences of Land Reform• Zimbabwe's Central Bank Policies• Effect on Inflation• Inflation's Effect on the Country• The Importance of Competent Leadership and Central
Banks
The Country Of Zimbabwe
• Zimbabwe is a land-locked country in sub-Saharan Africa
• Former English Colony• Known for its beautiful
waterfalls and it dire economic situation
Zimbabwe during the 1990's
• In the Early 1990's Zimbabwe was considered the "bread-basket of Africa"
• It's flourishing agriculture sector was being pushed to new levels of efficiency
• Today if Zimbabwe had kept on track it would be on about the same level as Brazil in terms of development
Zimbabwe's Land Reform
• Beginning in the late 90's the Land Reform policies of Zimbabwe Changed
• Robert Mugabe, President of Zimbabwe accelerated land reform and encouraged violent seizures of land
• Emphasis was placed on large industrial farms, the backbone of Zimbabwe's economy
Consequences of Land Reform
• Following the land reform many of the lands seized were given to government officials as private estates
• Gideon Gono's estate
Consequences of Land Reform Cont.
• With massive land seizures across Zimbabwe investors fled
• With a loss of money flowing in Zimbabwe became cash strapped
• Much of the Land Reform was paid for by money from the IMF
• Farms turned into estates caused a decline in food production
• Mass famine begins
Zimbabwe's Central Bank's policies
• Zimbabwe was now in debt
• Mass Famine• What to do?• Print lots of money
Effect on Inflation
• Central bank begins to print money
• Inflation skyrockets• December 22, 2008 80
billion percent inflation a month
• 6.5 quindecillion novemdecillion percent a year, 65 followed by 107 zeros
Effect on Inflation
• July 4, 2008 at 5PM, a bottle of beer cost 100 billion
• July 4, 2008 6PM bottle of beer costs $150 billion
• Much of the increase in costs was due to food prices
• The lack of supply pushed cost up
Effect on the Country
• 2008 many social service sectors close
• No one can pay anyone so sanitation services collapse
• Cholera outbreak 2008• Prisons are not able to
feed prisoners • Zimbabwe's
ambulance
The Importance of Competent Leadership and Central Banks• The case of Zimbabwe
shows just how quickly a country can fall with incompetent leadership
• Robert Mugabe and Gideon Gono have single handily move a middle income country to the poorest country in the world