Inflation in Zimbabwe has not gone away

I wrote here less than three weeks ago, when the most recent currency 'reform' was carried out in Zimbabwe (10 zeroes were lopped off the currency), that unless something was done to change the way the economy functions, that inflation would soon be back. Unfortunately it has now begun to happen already in a pretty major major way:

I’ve just come from the bank, where the whole queue was talking about prices. The cash withdrawal limit in Zimbabwe has been raised to $300 (which would have been $3 trillion before 10 zeros were lopped off last month). This is, at least, a marked improvement over $10 ($100 billion), which it was for several weeks before that. But ever since Gono chopped them off, the the zeros have been racing to catch up. As my colleague put it, they’re Olympic runners and they’re coming back fast and furious. Yesterday’s commuter omnibus fare into town was $40 ($400 billion) in the morning – by the time of the evening commute home again it had gone up to $60 ($600 billion). It’s the same in the shops – it’s as if, now that prices are in hundreds, instead of trillions, there is license to double and treble prices daily – because things suddenly sound so cheap! Zimbabwe’s inflation is now 11.2 million percent per year (officially - independent bankers peg it at closer to 20 million). Imagine how many times in a year you’d have to double the prices of something to have it end up two hundred thousand times as expensive at the end of the year as it was to begin with.

- read the reast here.