I’ve got a question for you.
Where is Zimbabwe?
I’m serious.
If I were to hand you a blank outline map of the world, would you be able to point to the country of Zimbabwe?
Pointing in the general direction of a continent is not the correct answer.
If you’re like me, you might know that Zimbabwe is in Africa, but if you’re like me you couldn’t point to exactly where in Africa it is located.
Here’s a description of the location from Britannica:
Zimbabwe “… shares a 125-mile (200-kilometre) border on the south with the Republic of South Africa and is bounded on the southwest and west by Botswana, on the north by Zambia, and on the northeast and east by Mozambique.”1Does that help or do you have difficulty knowing where those other countries are located?
For me, I knew where South Africa was and had a good idea where Mozambique was, but I had no idea where Botswana or Zambia were located.
I hope your geographical knowledge is better than mine but this episode of the Big Sky Writer Newsletter is not about geography.
It’s about the economy.
Why don’t you know more about Zimbabwe?
Most of us are probably aware that our country is going through some difficult economic times and the immediate future doesn’t look promising.
Okay, what is coming to our economy looks terrible.
And, trust me on this, it’s not Putin’s fault.
We have destroyed ourselves.
You would think that with inflation already here and threatening to get worse, America’s news organizations would cover how other countries have handled similar challenges … in the present and in the past.
Perhaps we could learn what works and what doesn’t.
But how often do you hear about what happened in Germany in the 1930’s or what is happening in Zimbabwe or Venezuela in the present?
I’m guessing not very often.
The Zimbabwean Dollar
So it’s time for a very short history lesson on the Zimbabwean dollar.2
The first Zimbabwean dollar (ZWD) was introduced in 1980 and was worth a little more than the US dollar … $1.47 to be exact.
But Zimbabwe had a number of social, political, and economic problems — does that sound like any country you know today? — and Zimbabwean dollar (ZWD) began to lose purchasing power.
The government of Zimbabwe dealt with the problem by printing more Zimbabwean dollars.
Does that sound like any country you know today?
What happened after that?
In Zimbabwe in 1983, one US dollar would get you one ZWD.
But by 2006, one US dollar would get you 500,000 ZWDs.
That’s called inflation.
Time for a change
Things got so bad, they decided to scrap their ZWD and come up with a new currency, the ZWN.
In 2006, people could exchange 1,000 ZWDs and get 1 ZWN.
In August of 2006, one US dollar would get you 650 ZWNs. Not as good as the original ZWD but it was respectable.
However, only two years later one US dollar would get you 1,000,000,000 ZWNs.
In other words, it was worthless.
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