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Wednesday, 30 July 2008

Gono's last dice or Mugabe's last theft?

Zimbabwe will slash 10 zeros from its currency from Aug. 1, in bid to bring hyperinflation under control. Atleast that is the official line. Of course, redenomination can also be used as a method of confiscation. The Zimbabwean government may demand that such an exchange takes place within a short period of time, hoping that not all Zimbabweans will exchange the available cash. The old currency that won't be exchanged is essentially revenue - indirect seignorage - for the government.


  1. Cho,

    Have you noticed that the US government has promised to repeal the Zimbabwe Democracy and Economic Recovery Act of 2001 if the MDC wins?

    " "If the talks result in 'a new government that reflects the will of the Zimbabwean
    people' the United States stands ready to provide a substantial assistance package,
    development aid and normalization with international financial institutions," added
    the statement. "

    In other words, if the MDC gets to power and 'privatises' the country's assets (mines, parastatals), usually for cents on the dollar, they are willing to lift the Zimbabwe Democracy and Economic Recovery Act of 2001, which is what 'normalization with international financial institutions' means.

    US Prepared To Help If Talks Succeed
    Nancy Pasipanodya
    Mon, 28 Jul 2008 09:25:00 +0000

    With all the talk about the reaction to hyperinflation, no one ever honestly discusses the causes of hyperinflation in Zimbabwe. They certainly don't mention sanctions like ZDERA.

    Interesting piece from an Australian program called "Inside Story". Interesting, in that for once they have George Shire on, who of course gets overtalked by Roy Bennett and whose words are distracted from with negative scrawl - I guess they don't trust their viewers to make up their own minds.

    Inside Story - Zimbabwe's political conundrum - 25 Jun 08 P2

    Notice the negative propaganda scrawl when George Shire is talking. Also, Roy Bennett is a superior and insufferable rhodesian dirtbag, liar and former rhodesian police officer. How dare rhodesians criticize the democratic content of a government and country they swore would never be democratic, 'not in a thousands years', to use the words of the unindicted traitor, war criminal and racist Ian Smith. This is the type of individual they want to launch into power?

    How sanctions are making the economy 'scream'
    New African, May 2007 by Mahoso, Tafataona

    Britain and its Western allies claim that they have only imposed "targeted sanctions" and "travel bans" on the Zimbabwean leadership and not economic sanctions on the whole country. "Who do they think they are deceiving?," asks Dr Tafataona Mahoso, head of Zimbabwe's Media and Information Commission.

    There is a campaign of what I call "economic terrorism" against Zimbabwe mounted by Britain and its Western allies. "Economic terrorism" is what was meant by the former US president, Richard Nixon, when he instructed US spy agencies to ''make the economy of Chile scream".
    (Read on here...)

  2. 1. Slashing zeros from a currency cannot bring anything down. It's a purely cosmetic move. And while cosmetic moves do help with the psychological aspect of the issue, the underlying fundamental is all that matter (but I bet you know that, Cho).

    In fact, let's just remember that Zaire once introduced the New Zaire at an exchange rate of 1/3,000,000 just to print million notes a few years later.

    2. There are historical examples of currency change as confiscation measure. For instance during the Biafran war, Nigeria created the Naira that made all the money owned by Biafrans worthless. And in the 80's, in Nigeria again, a sudden change of banknotes (and not currency) was implimented with the almost openly declared as a way to force people to declare assets.
    In a politically divided country like Zimbabwe, it's far from a stretch to imagine some politically motivated abuse. It's not that they may hope that not all Zimbabwean will exchange the cash, the problem is that they may prevent some Zimabweans to exchange the cash.

    But yeah, I read a report of the Gono's speech and a lot of things barely made sense.
    Commiting to not printing more money would have been a start but I guess that's too much to ask.

  3. Zimbabwe dollars already have an expiration date printed on them so needing new currency is not unfamiliar in Zim.

  4. Anonymous,

    Zimbabwe dollars already have an expiration date printed on them so needing new currency is not unfamiliar in Zim.

    Don't bet on reading that in the mainstream press. All the spin about Zimbabwe is negative, no matter what the fact are.

  5. Don't bet on reading that in the mainstream press. All the spin about Zimbabwe is negative, no matter what the fact are.

    This is not about "spin in the mainstream press".

    Zimbabwean banknotes in fact aren't in use at the present moment.
    What serves as banknotes since around 2003 are actually bearer cheques and yes they do have an expiration date.

    This is one of the oldest:

    Now Anonymous obviously thought they were banknotes and that's wrong but somehow you manage to prove that the idea that everything is negative spin is nothing but an emotional reflex from some idiots.

  6. Actually I totally misunderstood that comment. So my apologies. (Cho, feel free to delete it)

    But still, how would the mainstream press mentionning that Zimbabwe got an expiration date on what it uses as a currency be anything but negative ?

    I mean, seriously, what's positive about that ?

    (especially since the currency is usually worthless before the expiration date)


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