Where a beer costs $150,000

I WAS INTRODUCED to the "Zimbabwean wallet" on my first day back in my home country. I needed to change 100 U.S. dollars into local currency, and a friend in Victoria Falls, the resort town where I had just arrived from Zambia, said he knew a black-market money dealer. He called a number, asked for a man codenamed "Mashishe" and inquired what the day's rate was. "Three," came the reply. Could he change $100? It appeared he could.

Ten minutes later, a car pulled up in the driveway. My friend took my $100, went to meet his man and, seconds later, returned with a knapsack bulging with thick bricks of Zimbabwean dollars -- in notes of 20,000 -- held together with rubber bands. It totaled 30 million Zimbabwean dollars.

"Here," he said, handing me the heavy bag. "The Zimbabwean wallet."

In the 1980s, when I lived in Zimbabwe, Z$30 million would have made me one of the richest men in the country. Today, it barely buys a family a week's groceries. The "three" quoted by the money changer did not mean three Zimbabwean dollars to one U.S. dollar. It meant 300,000 to 1. As I write this, a week after returning from Zimbabwe, the black-market rate has climbed again -- now it's 450,000 to 1. Even at the unrealistic government-set bank rate of 101,000 to 1, Zimbabwe's currency is the worst performing in the world; Zimbabwe's 1,200% annual inflation rate is the highest in the world.

The sheer volume of cash that people in Zimbabwe have to deal with draws comparisons to 1920s Weimar Germany and the peso crisis in Argentina in 2001-02. Indeed, one of the few growth industries in the country is in imported money-counting machines that can rapidly sift through and add up the thousands of notes required to purchase fuel or food or to pay bills.

Prices go up every day, and shoppers can be seen in supermarket aisles with pencils and paper, trying to add up all the zeroes on their bill before checkout time. Until June, the highest-denomination bill in print was the Z$50,000; my visit coincided with the introduction of the Z$100,000 note -- but even this denomination is not large enough.

"Our money loses half its value every four months," explained Zimbabwean economist John Robertson. "The Z$100,000 note at the official rate is US$1, but really it's worth 25 cents. In four months, it'll be worth 12 cents. A million-dollar note is more realistic."