Zimbabwe

  I never quite understood why Zimbabwe could print so much money and still maintained high levels of unemployment. I am sure someone with more knowledge about the country could explain it better. But hyperinflation in Zimbabwe did create one thing. The worlds best stock market when viewed from a return on investment perspective.

 
  The Zimbabwe Stock Exchange (the ZSE) is the best performing stock exchange in the world, the key Zimbabwe Industrials Index up some 595% since the beginning of the year and 12,000% over twelve months. This jump in share prices is far in excess of increases in consumer prices.

  I suppose more money was used to drive up stocks than it was used to invest in the real economy such as infrastructure and jobs. 


  When Germany experienced hyperinflation, unemployment fell nearly to zero percent. So much money was coming off the press that everyone and their grandmothers all found work.


Industrial output increased by 20 percent within a year, unemployment fell to below 1 percent in 1922, and real wages rose significantly. The "lubricant of inflation," as economic historian Carl-Ludwig Holtfrerich put it, breathed new life into the private sector.

The post-war boom was all the more remarkable because the rest of the world economy was sinking into a deep recession. The United States and Britain stabilized their currencies even though it put up to a fifth of their respective working population out of work. The governments of the Weimar Republic took the opposite approach, buying themselves an economic upswing and full employment at the cost of catapulting the mark to dizzying heights. Although it would probably be unfair to suggest the politicians in Berlin deliberately drove inflation forward, they didn't exactly try very hard to rein it in.

  Wages were increasing so quickly that the German Mark itself lost any significance as a monetary value.