http://www.economist.com/news/finance-and-economics/21576665-grubby-greenbacks-dear-credit-full-shops-and-empty-factories-dollars-they
This article talks about Zimbabwe's recovering economy after a period of extreme hyperinflation. During 2008, inflation had reached a point of 231,000,000% and the economy was struggling tremendously as a result. However, Zimbabwe has now begun using the U.S. dollar as their main form of currency, and is beginning to get itself back on track. However, there are still problems that must be resolved. Banks in Zimbabwe are struggling because nobody is willing to deposit money for more than 90 days. Banks do not have very much extra cash or anyone to rely on as a last-resort for funding. Therefore, liquidity is constantly an issue. As a result of all this, banks cannot lend money to people for a very long time either. This is hindering investment because firms and potential homeowners can't find loans, so they can't buy homes or make business investments.
This is very interesting timing. I just posted a blog yesterday about how well the economies of the world are doing. Japan is projected to break its two decade downward spiral of deflation very soon. The Philippines, a virtually non-existent market, has emerged and is projected to be a player on the world stage now. The news about Zimbabwe is good and on par with the rest of the world. The "global" meltdown of 2009 seems to almost have made a comeback.
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