Zimbabwe's central bank said on Saturday it will circulate $10 million worth of new bond notes on Monday, a quasi-currency that authorities expect to ease a serious cash crunch, but will limit withdrawals to curb any abuses.
The Reserve Bank of Zimbabwe (RBZ) first announced the plan in May to issue bond notes to address chronic cash shortages and supplement dwindling U.S. dollars that have been in circulation for the past seven years.
But many Zimbabweans are sceptical about the scheme after a 2008 multi-billion percent inflationary meltdown caused by rampant money-printing. The new plan has already caused a run on the banks as Zimbabweans empty their accounts of hard currency.
The bond notes will be officially interchangeable 1:1 with the U.S. dollar.
Source: Reuters
See also: India grapples with the effects of withdrawing 86% of cash in circulation
(Score: -1, Offtopic) by Anonymous Coward on Monday November 28 2016, @08:36AM
Stupid cuntries use stupid monopoly money like stupid cunts.
(Score: 1) by anubi on Monday November 28 2016, @09:16AM
My guess is the only way these notes are going to have any value is if they are used for paying tax.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 2) by Bot on Monday November 28 2016, @01:55PM
This is the big problem. If there were political leaders instead of puppets, cash shortage would not be a problem. You emit bonds, and you mandate them to be used to pay taxes, maybe even overvaluing them. Voila' you created money. You also created inflation? hm I am not sure inflation is what they say it is. You raise prices when business is going well and you need to build a pool, but usually the case is more for raising prices because the bank/landlord/tax office has you by the balls.
Account abandoned.
(Score: 2, Interesting) by Arik on Monday November 28 2016, @02:24PM
You've created no value. What you've done is skimmed the national capital to produce a dividend for the state at the expense of all other entities inside it.
"hm I am not sure inflation is what they say it is."
That's what inflation is. The state which mandates fiat currency and is itself the central bank can effectively tax all savings - whether in a bank or stuffed under a mattress - at will. To the people on the receiving end, it's called inflation, because there is no bill and no payment made - but the savings just shrank in value and the state now has a corresponding amount of new currency to disburse.
It's a neat trick from the states perspective but it's also a dangerous one. Fiat money itself is a confidence game, and the more of the game the people see the less confidence they have in it.
If laughter is the best medicine, who are the best doctors?
(Score: 3, Insightful) by frojack on Monday November 28 2016, @09:16AM
The bond notes will be officially interchangeable 1:1 with the U.S. dollar.
Unless you can go to a bank and be assured that the rate will be exactly a dollar this money will fail like all the others that have failed after being nominally pegged to the dollar (or any other currency).
Without a legally binding rate you might as well let it float. With a legally binding rate, you might as well just use actual dollars (or pounds or what ever). It will travel better. But that's the point of many of these pegged currency: precisely to make sure they DON'T travel.
No, you are mistaken. I've always had this sig.
(Score: 0) by Anonymous Coward on Monday November 28 2016, @09:14PM
With a legally binding rate, you might as well just use actual dollars (or pounds or what ever). It will travel better. But that's the point of many of these pegged currency: precisely to make sure they DON'T travel.
Even assuming they are trying to be legitimate, there are reasons to use an independent currency pegged to a dollar:
1) Currency wear out. You'll need a new source if they are in actual circulation, and it is easier to print your own than to always need to go back to the US, especially unofficially.
2) This opens the possibility of an easier transition to a floating currency in the future. (This can be a feature or an anti-feature, depending on how much you trust the government.)
3) National independence/pride. It's pretty shameful to have a pegged currency, but it's even more shameful to be a mere "colony" of another country.
4) It's less likely to provoke some kind of negative reaction from the US government about their currency being co-opted.
5) I imagine it also lets more flexibility in terms of banking institutions as well (such as electronic funds and transferring amounts), although I'm not sure about this.
(Score: 2) by kazzie on Tuesday November 29 2016, @06:14AM
1) Currency wear out. You'll need a new source if they are in actual circulation, and it is easier to print your own than to always need to go back to the US, especially unofficially.
2) This opens the possibility of an easier transition to a
This. The same US dollars havr been circulating in Zimbabwe for so long (since 2009) that many of them are falling apart. Zimbabwe's government can't print new US Dollars, but can reintroduce their own notes.
(Score: 2) by darkfeline on Monday November 28 2016, @09:36AM
So is Zimbabwe backing their currency with... US currency? Of course, currency is only as good as the trust in it; how many Zimbabweans trust that their government will really exchange these notes 1:1 with USD? Probably not many.
(US currency is not backed by gold any more. It's trust all the way down!)
Join the SDF Public Access UNIX System today!
(Score: 0) by Anonymous Coward on Monday November 28 2016, @11:37AM
Then you find that it was all built on lies and control, and that you're well and thoroughly fucked, with a recorded history of all your actions...
Unless you were smart enough to use two devices instead :)
(Score: 0) by Anonymous Coward on Tuesday November 29 2016, @05:16AM
They always start at 1:1 to the USD. And then it always goes to heck. Al that varies is the speed. Zim currency is only backed by how much mineral wealth China can strip mine out while propping up Mugabe.
And the "West", don't forget, eagerly helped achieve this disaster in the 1970's. Now 10 million people suffer, 12 drive new Mercedes and the Chinese have tons of chrome, gold, etc on tap on demand.
(Score: -1, Flamebait) by Anonymous Coward on Monday November 28 2016, @09:42AM
The desootic evil ruthless white bastards and their families were chased out of the country or killed to hand the profitable farming land back to the blacks it was stolen from.
Blacks run the places. Their justice is seen widely.
How can there be problems?
This must be filthy white bastard lies sent against this fine nation in an attempt to undermine the glorious black supremacy.
(Score: 2) by fritsd on Monday November 28 2016, @11:32AM
I once knew somebody who had travelled the length of Zimbabwe.
She said that (besides being piss-poor and having Mugabe as autocrat and having to eat sadza [wikipedia.org] all the time) the country has a very large social problem:
After the revolution, there was no real plan to take care of the numerous veterans, called "war-vets". No health care, housing etc. for the men who risked their lives.
So now they have a situation where the war-vets tolerate the ZANU-PF [wikipedia.org] government, and the government stays out of the way of the war-vets, and if the war-vets need anything from the villages they live in, they take it.
Because they have all the military training and heavy weaponry (as souvenirs), and nobody seems to care for them, so they care for nobody.
It will all explode once Mugabe is finally dead, because I've read somewhere that, despite him being a despot, behind the throne there are other ZANU-PF brass waiting in the wings that are *even much worse*.
(Score: 2) by Entropy on Monday November 28 2016, @09:02PM
So in short--They can't manage themselves, and really need someone to do it for them.
(Score: 2) by fritsd on Monday November 28 2016, @09:59PM
They can't manage themselves as long as they haven't gotten rid of their corrupt government, that's for sure. Otherwise I don't know what you mean.
I don't think the Zimbabweans fancy some kind of re-colonisation, if that's what you're thinking about :-)
I don't know what Morgan Tsvangirai is doing, is he dead yet?
(Score: 5, Insightful) by Phoenix666 on Monday November 28 2016, @03:23PM
Zimbabwe fascinates me because, whereas I endorse multi-ethnic states, that country was better off ruled by the white minority. And by that I don't mean, "better for some," but better for whites and blacks there even if the blacks were disenfranchised. Rhodesia was the breadbasket of Southern Africa. Its farms were productive and its economy sound. Zimbabwe under Mugabe spoiled all that. It has sunk back into the abject poverty it suffered before Cecil Rhodes arrived on the scene. I don't believe any race is superior or inferior to any other, but Rhodesia/Zimbabwe is perhaps a poignant argument for Max Weber's central thesis that culture does tell.
For those who are interested in what that transition was like, Alexandra Fuller [powells.com] has written several engaging books about the experience.
Washington DC delenda est.
(Score: 1, Insightful) by Anonymous Coward on Monday November 28 2016, @04:34PM
That's what happens when the monkeys run the zoo
(Score: 4, Insightful) by n1 on Monday November 28 2016, @05:16PM
Mugabe is a tyrant and a traitor to the people of Zimbabwe, i'm pretty sure of that.
However, it really irritates me when people use the phrase "breadbasket of Africa", it's a rose-tinted view of history, a justification for colonial power and expansion... Every colonial power with a stake in Africa at various points in history had their own 'breadbasket of Africa' from Libya to Congo to Rhodesia to South Africa, and probably several more in-between.
Colonial forces did have positives, but also huge negatives associated with them, but the nostalgia for those days and the willful ignorance of the social and economic climate which lead to the displacement of the western/european populations in the country is not constructive at all... We give our own countries the benefit of time to learn from our mistakes, consign the misdeeds to history but carry the banner of the positives as if they occurred in a bubble.
We do not give former colonies and non-aligned states the same latitude to make those horrible 'mistakes' and then leave them in the past when they want, unless there's some economic agreement. Such as in the case of the Middle East, we're very supportive of tyrants and no allusions to democracy there because we have an economic/trade understanding between the cultures.
Mugabe appeared to have taken the worst of colonial rule and nationalist rule, and should be rightly condemned for it. But there is no answer in selective hindsight when it comes to colonial rule in Africa, or anywhere.
If that is what we should be doing, then we need to give unreserved praise to China and especially India for their amazing economic growth and ensuring their prominence in global trade, breadbaskets of their own regions. Look at the growing middle classes there... I mean sure it's still based on modern slavery, political oppression and the persecution of the unfavored ethnic and social groups, but the numbers don't lie.
Zimbabwe and Cuba have similarities, the existing global powers had no desire to see those regimes succeed because of what they replaced. The regimes may have failed on their own, especially in the case of Zimbabwe, but we cannot ignore the sanctions and geopolitical forces that were working from day 1 to see the revolutions in those countries fail the people.
(Score: 2) by Phoenix666 on Monday November 28 2016, @06:04PM
The legacy of colonialism is complex and fraught, I agree. There seems to be an emotional dynamo behind your response:
It elicited an emotional response in you, but "breadbasket" is how Rhodesia was known. You can find it called such in the Atlantic, Foreign Policy, and even by the UN [un.org] (I didn't link the first two because they're pay-walled).
Wikipedia defines "breadbasket" [wikipedia.org] as, "The breadbasket of a country is a region which, because of richness of soil and/or advantageous climate, produces large quantities of wheat or other grain. It lists Rhodesia as one example. As such it's a florid description of agricultural output. "a justification for colonial power and expansion" is your take.
Sure, and subaltern [wikipedia.org] studies pore over that ambivalence. The railroads, telegraphs, and civil service the British built in India, previously a loose collection of independent states; the modernizations the Japanese brought to its Taiwan colony, previously a backwater in imperial China; and others are examples. "Nostalgia," again, is your imputation. Remarking that Rhodesia's agriculture abounded while Zimbabwe's withered is a statement of fact, not nostalgia.
The larger point I was musing at was how the case of Rhodesia/Zimbabwe reminds me a lot of Weber and how culture and its physical artifacts (a system of roads, a legal code, etc) do perhaps explain why some societies thrive and others languish; that's a point reinforced by the observation that Zimbabwe also thrived initially because Mugabe continued the policies that worked under Rhodesia, and only failed when he struck at their roots.
Washington DC delenda est.
(Score: 2) by n1 on Monday November 28 2016, @06:53PM
Yeah, it was an emotional trigger because i've heard it so many times from older members of my family who use it to explain why we shouldn't have let the British empire slip away... "Look at Rhodesia, it used to be the breadbasket of Africa until...." and to clarify Zaire/Congo was the "jewel of africa [upi.com]" not the breadbasket. But I think you got my point.
I actually went to look at where this phrase came from, specifically in relation to Zimbabwe, and I cannot find where it originated, it's just repeated often enough so it must be true.
The legacy of colonialism is different in every former colony, some were encouraged to do independence because they were a financial drain on the empire they were under. This wasn't done in a 'you're strong enough to go on your own now' it was a balance sheet decision after the strategic importance of various places (in the caribbean) diminished after WWII and subsequent shifts in global economics. Some countries were encouraged to be independent, others were warned against it. None of it was done in the interests of the local populations.
I really don't mean to undermine your point, it's a valid one which I am mostly in agreement with.
As a final point on this, the Atlantic article [theatlantic.com] i first stumbled across that used "breadbasket" phrase was written by Samatha Power, who is an American diplomat and ambassador to the UN. She is a neocon and a proponent of using military force to spread human rights. The modern embodiment of a colonialist mindset.
(Score: 0) by Anonymous Coward on Monday November 28 2016, @06:58PM
Its interesting, my take on the British disposal of empire in the 50s/60s was that (with the exception of India) the Labour government exactly thought they were liberating the people from unjust government.
(Score: 0) by Anonymous Coward on Monday November 28 2016, @07:32PM
https://en.wikipedia.org/wiki/Names_of_large_numbers [wikipedia.org]