Inflation and Zimbabwe

"Inflation is always and everywhere a monetary phenomenon."
- Milton Friedman

This from The Wall Street Journal about hyper-inflation in Zimbabwe. It seems they have solved the problem by adopting a stable currency: the U.S. Dollar.

Zimbabwe topped that record for economic mismanagement last year. The country’s annual rate peaked at 489 billion percent in September 2008, the International Monetary Fund reported, and for the full year averaged 56 billion percent. The Zimbabwe dollar became literally worthless, the IMF said, and by November 2008 it “virtually disappeared from circulation.”

Fed up, locals started using U.S. dollars, which put a sharp lid on inflation. This year, the IMF estimates that inflation will descend from hyper-stratosphere and average 6.9%, when measured in dollar terms.