We hear plenty of talk about recession and inflation these days but to many people these are just words. We have been fortunate in recent years not to experience either to any significant extent. So here is an example of extreme inflation to think about for those who don’t quite understand it’s effects.

When Zimbabwe became an independent nation in the early eighties they had the Zimbabwe dollar which was valued at $1.00 or so, which would have been roughly 50 pence. As you will see details hardly matter here.

Zimbabwe has just issued a $500,000,000 note and it is worth approximately $2.00

Inflation is running at some ridiculous rate and prices are doubling every week. Can you imagine what life must be like when the value of any money you have is half what it was a week ago? Prices double each week and you need your wages to double each week to keep up. Buy a loaf of bread on Monday or buy half that same loaf on Friday for the same amount of money. We may grumble about the price of a loaf of bread going up 20p but imagine it doubling in price every single week.

When our government or the bank of England refer to inflation this is not the sort of situation they are talking about, fortunately. However, it clearly demonstrates how devestating inflation can be when it runs rampant with no control or end in sight. How people cope with inflation at levels like that I can not imagine. If we end up with inflation even if it were to run to 5 or even 10% maybe we should feel lucky that we don’t live in Zimbabwe.

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