Zimbabwe inflation could be halted with new monetary regime: Steve Hanke

Dec 02, 2007 (LBO) – Zimbabwe’s rocketing prices which are starting to take almost the same path as the 1920’s German hyperinflation, could be halted by scrapping its central bank, a top economist has said. Since 1997 inflation has surged 1,030,217 percent and economic activity in the country measured by gross domestic product per capita has fallen 35 percent.

The value of the Zimbabwe dollar is plummeting. A re-denomination in August 2006 struck three zeros off the Zimbabwe dollar, making a US dollar worth 250 Zim dollars from the earlier 250,000.

But now the currency is officially at 30,000 to the US dollar and in the black market at more than a million. Another re-denomination to slash three zeros is due this month.

In September official 12-month inflation in Zimbabwe was 8,000 percent.

History Repeats

Steve H. Hanke, from The Johns Hopkins University in Baltimore, a global authority on monetary regimes, says the Zim dollar is “ominously following the same plot as that taken by the mark during the great German hyperinflation of the 1920s.”

Zimbabwe’s hyperinflation has pushed millions into