Zimbabweans Turning Away From Government Money?
Given that inflation in Zimbabwe is running at something like several million per cent, one has to wonder why people there accept money. If I had been a Zimbabwean, my first choice would have been to get the out of that hell hole. But if for some reason that would not be possible, I would either require foreign money in transactions (even though that is reportedly prohibited by the Mugabe regime) or return to barter. Even barter is preferable to a joke of a currency like the Zimbabwean dollar.
Via David Theroux at the Independent Institute blog I now see that many are starting to think like that in Zimbabwe now. Gasoline, in the form of gasoline coupons, is increasingly used as currency with many openly pricing their goods in terms of liters of gasoline. Although the article says that this is equivalent to barter, it is more accurate to say that if gasoline were to become de facto currency, this would mean that Zimbabwe would have a commodity based monetary system, quite similar to the gold standard. I suspect however that the Mugabe regime, seeing its revenue source vanishing, will use violence to crack down on this practice.
Via David Theroux at the Independent Institute blog I now see that many are starting to think like that in Zimbabwe now. Gasoline, in the form of gasoline coupons, is increasingly used as currency with many openly pricing their goods in terms of liters of gasoline. Although the article says that this is equivalent to barter, it is more accurate to say that if gasoline were to become de facto currency, this would mean that Zimbabwe would have a commodity based monetary system, quite similar to the gold standard. I suspect however that the Mugabe regime, seeing its revenue source vanishing, will use violence to crack down on this practice.
posted by stefankarlsson at 7:57 PM
2 Comments:
http://www.irinnews.org/Report.aspx?ReportId=79701
Check out the madness of deleting ten zero's. I have often wondered why Zimbabweans are not using tiny small gold coins. I guess they don't exist down there. Which again means gold is less valauble than other things in a complete crack-up bust?
What will Mugabe do when the coins turn worthless again and he has no factory to print paper money. My wild guess is that he will leave the country before September 1.
Stefan,
I believe Mugabe has made it illegal to use anything but the Zimbabwean dollar in transactions. My guess, therefore, is that there is probably a very active underground market using some other currency (perhaps the U.S. dollar).
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