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Zimbabwe's Currency Colapse Gabriel Cruz 10500502.

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Presentation on theme: "Zimbabwe's Currency Colapse Gabriel Cruz 10500502."— Presentation transcript:

1 Zimbabwe's Currency Colapse Gabriel Cruz 10500502

2 Why Zimbabwe Question: Why are financial institutions important o Rich people make money by taking money from the poor o Why are they there No: Financial institutions are important

3 Preview The country of Zimbabwe Zimbabwe during the 1990's Zimbabwe's Land Reform Consequences of Land Reform Zimbabwe's Central Bank Policies Effect on Inflation Inflation's Effect on the Country The Importance of Competent Leadership and Central Banks

4 The Country Of Zimbabwe Zimbabwe is a land-locked country in sub-Saharan Africa Former English Colony Known for its beautiful waterfalls and it dire economic situation

5 Zimbabwe during the 1990's In the Early 1990's Zimbabwe was considered the "bread-basket of Africa" It's flourishing agriculture sector was being pushed to new levels of efficiency Today if Zimbabwe had kept on track it would be on about the same level as Brazil in terms of development

6 Zimbabwe's Land Reform Beginning in the late 90's the Land Reform policies of Zimbabwe Changed Robert Mugabe, President of Zimbabwe accelerated land reform and encouraged violent seizures of land Emphasis was placed on large industrial farms, the backbone of Zimbabwe's economy

7 Consequences of Land Reform Following the land reform many of the lands seized were given to government officials as private estates Gideon Gono's estate

8 Consequences of Land Reform Cont. With massive land seizures across Zimbabwe investors fled With a loss of money flowing in Zimbabwe became cash strapped Much of the Land Reform was paid for by money from the IMF Farms turned into estates caused a decline in food production Mass famine begins

9 Zimbabwe's Central Bank's policies Zimbabwe was now in debt Mass Famine What to do? Print lots of money

10 Effect on Inflation Central bank begins to print money Inflation skyrockets December 22, 2008 80 billion percent inflation a month 6.5 quindecillion novemdecillion percent a year, 65 followed by 107 zeros

11 Effect on Inflation July 4, 2008 at 5PM, a bottle of beer cost 100 billion July 4, 2008 6PM bottle of beer costs $150 billion Much of the increase in costs was due to food prices The lack of supply pushed cost up

12 Effect on the Country 2008 many social service sectors close No one can pay anyone so sanitation services collapse Cholera outbreak 2008 Prisons are not able to feed prisoners Zimbabwe's ambula nce

13 The Importance of Competent Leadership and Central Banks The case of Zimbabwe shows just how quickly a country can fall with incompetent leadership Robert Mugabe and Gideon Gono have single handily move a middle income country to the poorest country in the world

14 The Importance of Competent Leadership and Central Banks The case of Zimbabwe shows how important a financial sector is as well Hyper-inflation brought all of Zimbabwe's activities to a stop and destroyed the economy

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