A story by the news agency AFP would have us know that Zimbabwe’s inflation rate six months ago was estimated to be “in multiples of billions”.
Now I know that things in Zimbabwe are bad … but that bad? Or is this just another case of a journlalist who doesn’t understand numbers? An annual inflation rate of a billion percent means that if your wad of money – let’s say, a million Zimbabwean dollars – can buy a loaf of brad today, it will only be able to buy one-billionth of that loaf in a year’s time. A billionth of a loaf of bread is a very, very small particle; conversely, a billion is a very, very large number. In fact, so large, that it becomes meaningless when you are talking about a measurable indicator such as inflation.
The Zimbabwean central bank recognised that when it stopped calculating its inflation rate at the end of last year. At that time, the official inflation rate was 14 841%, which already signified hyperinflation of an unprecedented scale. Since then, credible estimates of Zimbabwe’s inflation rate have ranged from 40 million percent (economist John Robertson) to 231 million percent (Zimbabwe’s Central Office of Statistics). So where does AFP get its “multiples of billions” from?
In February, The Times of South Africa reported that economist Steve Hanks of Johns Hopkins University had calculated Zimbabwe’s inflation rate at 89.7 sextillion percent. In his blog on the same day, editor Ray Harltey put the figure at between 5 sextillion (that is, 5 followed by 21 zeros) and 80 sextillion. He pointed out that this was “academic” (I think he meant statistically meaningless) because the currency had, for all intents and purposes, become valueless.
But if those sort of figures are meaningless, then why publish them? And, being the estimate of one economist, how credible are they? Gary Els, vice-president of the Astronimical Society of South Africa, answered that question much better than I can in a response to Hartley’s Blog:
I was definitely astonished to see the figure shoanswerwn of Zimbabwe’s inflation rate on the front page of The Times newspaper today. A figure of 5 followed 21 zeros percent!
In scientific terms we say 5 x 10 to the power of 21, now that is truly a very large number. To give you an idea of just how large it is, the estimate for how many stars there are in the entire universe is 9 x 10 to the power of 21 or 9 billion trillion stars !
So almost a star in the universe for every percent inflation of the poor Zim dollar.
Now if you take a Zim dollar note which is 0.1mm thick, and place another 9 notes on top, you get a pile of notes 1 mm in height. Thus 10 000 notes will be a pile 1 meter in height.
Thus for this inflation rate, or to purchase the same item as in the past with the same denomination, you would require a pile of notes 5 x 10 to power 14, kilometers in height, which is a pile of notes from earth to beyond the edge of our Solar System !!
The space probe Voyager 1 which was launched by NASA in 1977 to explore the solar system, is traveling at 61 000km/h and is currently, only now near our farthest planet Pluto`s orbit, would only get to the end of the poor Zim dollar pile of notes in 2025 !
Also a bank note weighs 1 ounce or 23 grams, and so the poor Zimbabwean would require the inflated same denomination notes in tons of 1 x 10 to the power of 17, which about 85 percent of the earths weight in tons !
Now that is more than astonishing as your headlines say, it is a number just to large to believe.