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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: 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?