Zimbabweans battle money shortages as collectors buy hundred billion dollar notes on eBay

from the International Herald Tribune

Another example of how messy things are in Zimbabwe. Kale

Amid Zimbabwe's mind-boggling hyper inflation, a new 100 billion dollar bank note has more value as a novelty item on eBay than on the streets of the capital.

The note, launched this week, is worth enough to buy a loaf of bread — if you can find one on Zimbabwe's depleted store shelves. Meanwhile on eBay, the bill was on offer for nearly US$80.

Notes in the millions of dollars are useful only as toilet paper and it's cheaper to light a fire with low denomination bills than with newspaper.

In the political and economic turmoil since disputed March 29 elections, prices have risen almost daily. Factories and businesses have shut down amid empty order books and chronic shortages of gasoline, power, water and spare parts for equipment repairs.

President Robert Mugabe and opposition leader Morgan Tsvangirai signed an agreement Monday to hold talks about power-sharing to end the crisis and restore economic stability. But the news failed to move the exchange rate, since little cash is available.

House prices and lottery prizes are quoted in quadrillions — that's with 15 zeros. Zimbabweans says it's only a matter of time before big ticket items will be priced in the quintillions, which have 18 zeros.

Official inflation is quoted at 2.2 million percent but independent finance houses say it's closer to 12.5 million percent.

One major commercial bank said its automated teller machines are not configured to dispense multi-zero withdrawals and freeze in what it called a "data overflow error." Software writers are busy writing programs to try to overcome the problem.

Urgent electronic transfers in trillions also take several days as electronic accounting systems grapple with transactions in 12 zeros.

Bank transfers command a special rate. A hundred billion dollars is worth US$5 at the official rate, US$1 at the black market rate — but just 30 U.S. cents in a transfer because by the time the funds are processed the Zimbabwe currency can be expected to be worth a lot less.

Shops have dropped six zeros from price tags, adding them again after totals are tallied at tills.

Zimbabwe has 27 denominations of bills and no coins. Lower value bills — 10 million Zimbabwe dollars — are all but obsolete, even in brick-sized bundles. Beggars and street urchins rarely bother to pick up such bills dropped on the street.

But one recent day in Marondera town outside Harare, traffic stopped and business came to a halt when someone — apparently upset by the dizzying rate of inflation — started throwing 50-billion-dollar notes from a moving car. Residents scrambled to collect the money.

The biggest bakery in Harare shut down this month and sent 1,200 workers home on forced leave because flour stocks recently ran out. For years, the bakery donated free loaves every week to a home for the handicapped and charity-run hostels.

One Internet provider has invited customers to pay their fees in gasoline coupons that hold their value.

A 58-year-old Harare financial director who asked not to be identified said his monthly salary is paid in local money which converts to US$50 at the bank rate. When available at his local sports club, a hamburger costs the equivalent of US$12. He hasn't eaten out in a year.

A cup of coffee at a government-owned five-star hotel was 130 billion Zimbabwe dollars, or US$5.30 this week. A waitress at the hotel said she earns 100 billion Zimbabwe dollars, US$4 a month.

A German company stopped shipments of bank note paper to the central bank's printers this month as the European Union looked to strengthen sanctions. The release of new money slowed as the central bank said it was looking to Indonesia and Malaysia to supply the specialized paper.

The daily grind for Zimbabweans to survive in the economic meltdown has won them a rating as the world's unhappiest people in the World Values Survey of the Michigan Institute for Social Research.

Zimbabweans were slightly unhappier than Armenians and Moldovans, also victims poverty and "the legacies of authoritarian rule," the researchers said.

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