This image has been doing the rounds of the economics and investment blogs lately, and so of course I can't pass by without adding my six penny [or 144 Zimbabwe Dollars—ed.] worth.
It's rather spoiled by the fact that, apparently, Zimbabwe is now experiencing deflation, after switching its economy to using a basket of world currencies rather than the old Zimbabwe dollar, but let's cast our minds back a year, or preferably two.
The first observation is that, like any commodity, toilet paper has a price. In finis, even a single sheet of toilet paper has a price. Let's say that this price was at one time one Zim$. Now let time pass (and not necessarily very much time) and we see that the price of a single sheet of toilet paper is 10 Zim$. Now, remembering your Structuralism, what little squiggles on the dollars do is establish a relationship between two of these pieces of paper such that one of them is worth ten times as much as the other. The obvious conclusion, assuming for a moment that Zim dollars and pieces of toilet paper are perfectly fungible, is that by applying ink to a piece of paper, the Zimbabwe government has actually destroyed 90% of its value.
