Another Zimbabwe Dollar… Backed By Gold?
As Zimbabwe’s latest attempt at a currency collapses – this would be the sixth one since 2008 – the country’s leaders are watching it fall and hinting that the next Zimbabwe dollar will be gold-backed.
Riiiight! Of course it will!!!!
The country’s local dollar has weakened against the US dollar every day in 2024, sending the price of a single loaf of bread from Z$6,105 to Z$19,357 in a mere 11 weeks. Such a loss of purchasing power has historically pushed the central to intervene bank and arrest the slide, but this time, there has been no action….
President Emmerson Mnangagwa announced this February his government will introduce a “structured currency.” Then, Finance Minister Mthuli Ncube said it may be backed by gold and the central bank postponed its monetary-policy statement to give final touches to the plan.
There are no gold-backed government currencies anywhere in the world. None. It is a symptom of the dishonesty of our age. While it is inevitable that people – given enough government currency debauchment – will start to trade in gold among themselves around government’s monetary systems – there is zero chance that Zimbabwe will introduce a gold-backed currency.
Of course, Zimbabwe is a stunning case history for the brazenness of its monetary crimes, its policies are only different in degree and not in kind from those of the US. And for the same reasons that economist Peter Earle with the American Institute for Economic Research identified in the above epigram: inflation is a tool for giving favors to cronies and buying votes, and because the people don’t understand it, governments and politicians can blame it on outside forces.
Bloomberg:
Even when people want to use it, the Zimbabwe dollar can hardly buy anything. The highest denomination, the Z$100 note, must be carried in large wads to carry out the smallest of transactions….
Zimbabwe suspended publishing inflation figures after July 2008, when the measure reached an annual 231,162,000%.
If you want to read the story of the currency inflation that made Zimbabwe the world’s laughingstock, read my book REAL MONEY FOR FREE PEOPLE! The American Gold Story. It’s an important guide to wealth protection and profit in these troubled days. Stop by our office, we’ll give you a complimentary copy.