# Hyperinflation - why Zimbabwe? **URL:** \ **Category:** Factual Questions\ **Created:** [May 13, 2021, 9:21am UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973 "2021-05-13T09:21:48Z")\ **Posts on this page:** 11\ **Page:** 4
**Author:** ![md-2000](https://avatars.discourse-cdn.com/v4/letter/m/9d8465/32.png) [@md-2000](https://boards.straightdope.com/u/md-2000)\ **Post date:** [May 15, 2021, 2:52pm UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973/61 "2021-05-15T14:52:12Z")
> [@Northern\_Piper](#): > > Bit of a hijack, but why do Americans do that? I’ve always wondered. I think it’s more that Canadians do that. (Americans tend to forget it exists… after all, you can buy most things in Canada using real dollars - we’ll just hose you on the exchange calculation. We’ll even pretend your coins are ours - except, now, pennies) I remember a Toronto Star political cartoon from back in the 80’s where someone was saying “…we need to teach children the value of a dollar!” and the child is replying “83.5 cents!”. For something that has varied from 63 cents to $1.09 vs. the gold standard (green standard?) its unreliability and tendency to change like that is annoying, since everything out in the real world is valued in US dollars. It can affect everything from vacation plans to the value of investments in mutual funds that hold foreign stocks. Hence its reputation in Canada as the “northern peso”. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [May 15, 2021, 3:53pm UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973/62 "2021-05-15T15:53:42Z")
> [@Folacin](#): > > (although I don’t think the Mexican peso is held in any higher regard than the Canadian $, being the other foreign currency that American’s might run into casually (if in the southwest, anyway). That’s the thing. The Mexican peso is held in much worse regard than the Canadian dollar but we don’t make fun of it. The nature of making fun of something (between friends) is that it is not malicious. When you are joshing your buddy you don’t tell him how fat and ugly his wife is. You pick on something minor that isn’t all the way true. The truth hits too close to home. But yes, others have hit on it. We josh you because they are called dollars and we are saying that we have the real dollars that typically have more value than yours. Also our money has typically been plain and green with a picture of a dead white guy. Yours is flowery and pretty so, again, like kids on the playground, we make fun of it. ---
**Author:** ![FlikTheBlue](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fliktheblue/32/10972_2.png) [@FlikTheBlue](https://boards.straightdope.com/u/FlikTheBlue)\ **Post date:** [May 15, 2021, 5:10pm UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973/63 "2021-05-15T17:10:57Z")
> [@UltraVires](#): > > Because although I can eat a bushel of tomatoes, if I had the equivalent value in money, the money could be used to buy any other good or service. **That IS its value.** I might buy tomatoes, the alcoholic next door a case of beer, and you chicken breasts. The way I see it, that makes it useful as a means of exchange, rather than valuable. The value came in whatever you did to earn that money. The person selling you the bushel of tomatoes, chicken, bottle of Jack Daniels, or whatever, is accepting a $20 bill. That much is true. But the reason they accept that $20 bill is because it represents $20 worth of some valuable good or service you provided to someone else. The bill is just a (extremely useful and convenient) way to keep track of all of those exchanges ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [May 15, 2021, 5:36pm UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973/64 "2021-05-15T17:36:55Z")
> [@Northern\_Piper](#): > > Bit of a hijack, but why do Americans do that? I’ve always wondered. It’s not just Americans. Many people have the strange idea that the arbitrary absolute ratio between currencies is somehow significant. Perhaps they are under the impression that everything started out in a 1:1 ratio in the distant past? I have met people who do not believe that 1 unit of _any_ currency is worth more than 1 USD, and when told that this is the case feel that some profound geopolitical explanation is required. ---
**Author:** ![JRDelirious](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jrdelirious/32/9531_2.png) [@JRDelirious](https://boards.straightdope.com/u/JRDelirious)\ **Post date:** [May 15, 2021, 10:20pm UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973/65 "2021-05-15T22:20:42Z")
> [@Riemann](#): > > Many people have the strange idea that the arbitrary absolute ratio between currencies is somehow significant One wonders if in some peole’s minds we’re still stuck in the Bretton Woods Accords and everyone is pegged to one another within a range (and further, that in their minds that system existed forever instead of only after WW2). IIRC in the case of the USA and the Then-New-Spain-Later-Mexico , they did start as pretty much the same thing (mostly because of New Spain pesos that were used to pay for a lot of the Revolution). UV has a point in that Americans just have a sort of insecurity issue with any currency whose coins and notes are not as staid and boring as ours (what do you mean, pink and yellow notes? Pictures of birds and beavers? Poem quotes? And, wait, holograms? _polymer_ notes??? _ **vertical-oriented** _ notes??? _Changing them every few years?!?!?_) But that’s not even particularly up with the Canadians, one of the most consistent, long-standing “ugly American” tropes has been that of the Yank going _“how much is that in REAL money?”_ in the course of a transaction _anywhere_ in the world. ---
**Author:** ![DemonTree](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/demontree/32/8646_2.png) [@DemonTree](https://boards.straightdope.com/u/DemonTree)\ **Post date:** [May 15, 2021, 10:41pm UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973/66 "2021-05-15T22:41:44Z")
> [@Riemann](#): > > It’s not just Americans. Many people have the strange idea that the arbitrary absolute ratio between currencies is somehow significant. Perhaps they are under the impression that everything started out in a 1:1 ratio in the distant past? I have met people who do not believe that 1 unit of _any_ currency is worth more than 1 USD, and when told that this is the case feel that some profound geopolitical explanation is required. There’s an element of truth in the assumption, in that whatever value a currency starts with, if it’s weak and suffers inflation it will soon be worth less than a dollar. A small unit does not necessarily indicate weakness as it may be due to past inflation, but a large unit in a currency that has been around for a while does suggest strength. ---
**Author:** ![bob\_2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bob_2/32/3341_2.png) [@bob\_2](https://boards.straightdope.com/u/bob_2)\ **Post date:** [May 16, 2021, 2:38pm UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973/67 "2021-05-16T14:38:00Z")
I just did a quick check and find that the British Pound is ranked five in the league of world currencies. The top four are al oil based Middle Eastern countries. ---
**Author:** ![md-2000](https://avatars.discourse-cdn.com/v4/letter/m/9d8465/32.png) [@md-2000](https://boards.straightdope.com/u/md-2000)\ **Post date:** [May 17, 2021, 1:49pm UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973/68 "2021-05-17T13:49:48Z")
It’s not so much the 1:1 ratio of currencies. It has more to do with the fluctuation. (IIRC, wasn’t the peso redefined a few years ago to drop some zeros?) The Canadian dollar as I said bounced between 63 cents and $1.09. When many goods are priced to a different currency (i.e. the US dollar) then the fact that prices can wander due to nothing more than the changing value of the currency itself adds a bit of uncertainty and lowers respect for it. Worse yet is if the changes are quick enough that established prices become detached from reality. (i.e. books, where the US/Canadian prices are printed on the back cover) ---
**Author:** ![Lumpy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lumpy/32/446_2.png) [@Lumpy](https://boards.straightdope.com/u/Lumpy)\ **Post date:** [May 17, 2021, 7:29pm UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973/69 "2021-05-17T19:29:57Z")
> [@DPRK](#): > > That works great until the government bans mobile payments: > [https://zwnews.com/breaking-news-zimbabwe-bans-ecocash-all-mobile-money-services/](https://zwnews.com/breaking-news-zimbabwe-bans-ecocash-all-mobile-money-services/) The tipping point is when free market logic is dismissed as “capitalism” and denounced as a selfish plot by people seeking to enrich themselves at others’ expense. Any time the government describes any failure of people to follow the program dictated for them as “sabotage”, it’s time to trade in whatever you can for hard currency and run, not walk, to the border. ---
**Author:** ![DPRK](https://avatars.discourse-cdn.com/v4/letter/d/4491bb/32.png) [@DPRK](https://boards.straightdope.com/u/DPRK)\ **Post date:** [May 17, 2021, 7:56pm UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973/70 "2021-05-17T19:56:25Z")
In Venezuela, the government attempted to [silence](https://en.wikipedia.org/wiki/DolarToday#Censorship) websites reporting the actual exchange rate rather than the (ridiculously bullshit) official exchange rate. Because, you know, the app was “sowing economic chaos”, “fanning inflation”, and “part of an international capitalist conspiracy against the socialist government.” Only a few million % inflation, though, hardly Zimbabwe-level where you need to break out the scientific notation. Well-worn rhetoric, in any case. ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [May 17, 2021, 8:51pm UTC](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973/71 "2021-05-17T20:51:41Z")
Here’s a very interesting (to me) article about how Brazil got hyperinflation under control in the 90’s with the “Plano Real” (Real Plan): [How Fake Money Saved Brazil : Planet Money : NPR](https://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil) The Wiki article: [Plano Real - Wikipedia](https://en.wikipedia.org/wiki/Plano_Real) [Previous page](https://boards.straightdope.com/t/hyperinflation-why-zimbabwe/941973.md?page=3)