Money talks


In this case money tells us a little about Robert Mugabe and a lot about centrally planned economies. The hundred trillion dollar note is literally not worth the paper it's printed on, and the city authorities in Harare had to put up notices in the loos forbidding people to use banknotes in the toilets (since they are cheaper than tissue, albeit still, by comparison, 'hard' currency).

The quantitative easing practised by the Mugabe regime made money worthless, except to collectors such as myself. They have now abandoned the currency entirely, with the result that a market in foodstuffs and other goods has begin to re-emerge, provided you pay in anything other than barrowloads of the local money.

Gresham's Law famously says that bad money drives out good, meaning that people pay in the devalued coin and hoard the good stuff. But this only applies where 'legal tender' applies. If you cannot be forced to take the bad stuff, Gresham's Law is reversed, and good money drives out bad (because no-one will take it unless they are forced to). In Zimbabwe, the moment they allowed people to trade in other currencies, the local money was abandoned. Perversely, it gained in value as a collector's item and a reminder of the follies into which socialism can lead…

Afterthought:  A friend, hearing about the note, asked if it were from Zimbabwe or England in 2012.  Funny, but scary…