The Money game

Zimbabwe is now experiencing an annual inflation rate of 7000%.

What does an annual inflation rate of 7000% mean?

A good costing Rs 1/- now will cost Rs 71/- after an year. or the prices double for ever 60 days.

Good deal indeed! Buy now and sell later.

But just wait...... How do you buy to store and sell later when you are not able to buy your basic goods. If all the cash you have is just sufficient for a meal!

I was curious about the highest inflation rates and did a bit googling. I found some interesting facts:



Historically, there have been incidences of monthly inflation in the order of 10^6 - 10^9 %!!!
The highest ever being 4.19 x 10^16 % per month which means prices double for every 15 hours!!
What happens in such cases?
The maximum denomination of note available increases drastically.
How does it end eventually?
It ends either with change in currency or the notes issued in that period( high denomination) are exchanged at a suitable rate.

This picture shows a German woman loading a stove with currency notes. They burn longer than the wood they can buy!!


PS: data and photo from wikipedia.