Zimbabwe out of money to print money...

[KrazyHorse]

Originally posted by Colonâ„¢
The inflation is in Zimbabwean dollars, not US ones.

Uh...yeah.

So wages lag behind the falling value of the Zimbabwe dollar relative to the US dollar, so the value in US dollars of wages paid in Zimbabwean dollars should be depressed.

[KrazyHorse]

If Z$ drops relative to US$ by 50% in a week but wages are left unchanged then everybody in the country takes a 50% pay cut when measured in US$

[DanS]

An NPR report a couple of days ago put Zimbabwe's annual inflation at about 1,000%.

[Whoha]

the article mentions 1042%

[Lancer]

Anyone wanna be a millionaire?

[VetLegion]

I almost forgot:

for excellent thread title

[MOBIUS]

Don't worry, it's only Africa. No one cares about Africa - not even the people on Poly...

[SlowwHand]

I wondered when the sage wisdom of Mobius would appear. We can rest easy now.

[MOBIUS]

I bet you don't know the first thing about the **** going down in Zim - as amply shown by your posts in this thread...

[Colonâ„¢]

Originally posted by KrazyHorse Uh...with high inflation, real wages are depressed if the nominal wage is "sticky"

If Z$ drops relative to US$ by 50% in a week but wages are left unchanged then everybody in the country takes a 50% pay cut when measured in US$

I think you misunderstood me. I was talking about stickiness of wages in real terms (so in this case, largely in dollar terms as well).

Yes, if nominal wages are left unchanged. But if the fall in the exchange rate is caused by, say, a doubling of the amount of Z$ in circulation, wages and prices will double as well. Measured in US$, wages remain the same.

[Vince278]

Everybody knows it takes money to make money.

[Lancer]

[KrazyHorse]

Originally posted by Colonâ„¢




I think you misunderstood me. I was talking about stickiness of wages in real terms (so in this case, largely in dollar terms as well).

Yes, if nominal wages are left unchanged. But if the fall in the exchange rate is caused by, say, a doubling of the amount of Z$ in circulation, wages and prices will double as well. Measured in US$, wages remain the same.

Ah.

I doubt wages are keeping pace with inflation, however. Likely they are lagging...

[Colonâ„¢]

Vetlegion's explanation is probably a more likelier one, yes.

[DanS]

The gov't can even scrounge up enough foreign currency to buy ink, after all! An exchange rate is sort of a meaningless concept at this point.