Zimbabwe 2008 20 Trillion Dollars P# 7 Uncirculated

Front: Denomination at left, rocky outcrop in the middle

Back: Dam scene with wildlife

This incredible note dates to one of the world's worst episodes of hyperinflation.

To the non-economist, an episode of hyper inflation occurs when prices run completely out of control. A more precise definition of hyper inflation is that set by the economist Phillip Cagan in 1956 : a price-level increase of at least 50% per month. 

Under Cagan's definition, an episode of hyperinflation starts when there is a month in which the price level increases by at least 50%. When the monthly inflation rate drops below 50% and stays there for at least one year, the episode is said to have ended.

Between March 2007 and November 2008, Zimbabwe experienced the second highest episode of hyperinflation ever recorded. Towards the end of that period, prices in ZImbabwe were doubling every 24.7 hours, or were increasing by 98% per day.

Zimbabwe's hyper inflation is said to have been caused by the corrupt and naive economic policies enacted by Robert Mugabe's regime - productive assets were forcibly redistributed to citizens that had no experience managing the assets (farms and companies) they'd been given, and GDP dropped as a result. Government expenditure rose following military intervention in neighbouring Congo - Mugabe's solution to rising expenses was to simply print more money to pay for them. 

This increase in the money supply led to inflation, which meant even more money was required, and a viscious cycle of money printing and inflation began.

The episode ended in April 2009, when the Zimbabwean government finally abandoned the Zimbabwean dollar and allowed foreign currencies to be used as legal tender.

SKU: 209349