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The real rate of inflation



I READ with fascination your article last week about RBZ governor Leonard Tsumba and the rate of inflation in Zimbabwe. The shortage of notes in Zimbabwe is an excuse for the government to print

more money in an attempt to buy itself out of debt (which by the way is synonymous with staying in power!).


All this fiasco achieves is hyperinflation as savings become worthless by the day. If you think Tsumba’s annual inflation rate (269%) is high, just watch out! I think it is already running at 365% per annum. It doesn’t take a bigger brain to work out that some goods that sell for $100 today will be bought for $200 in just 100 days from now.


What a coincidence! – 365% per annum inflation seems awfully close to the present country debt of $354 billion. Let’s just for ease of mathematics assume that the country’s debt is $365 billion. On that basis, when the national debt reaches $1 000 billion then your inflation rate will be 1 000% per annum.


If that is right then for every $4 billion pumped into the economy per day we will have a 4% hike in annual inflation. Even if I ignore compounding, that means the real annual inflation rate for Zimbabwe is 365 x 4 = 1 460% per annum already!


I think it’s time the ruling party got real and simply capitulate gracefully by holding a proper fair and internationally monitored election.


The only alternative is blood on the walls.


MM,

UK resident.

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