Zim phasing out local currency

F1 Fan said:
Is that at all possible? Wouldn't it then be better if that? If we had kept the British currency, would we not have been in a much better position today?
Click to expand...
Usually only happens when the tinpot dictators have extracted all possible wealth from citizens and wrecked the economy. By then it's too late - your savings will have been plundered and your pension devalued to zero. If our overlords are smart, we'll abolish the ever-diminishing ZAR and switch to USD now. That should buy us a little time before the USD itself sinks into oblivion from all the fiat money and QE over the past while.

If you have the means, get out of paper and into tangibles.
 
How does this work? If they still have hyper inflation then the costs will still rise in Dollar terms not so, or does inflation not influence items priced in US Dollars locally in Zim? If that is the case, then how do they actually determine the inflation rate in Zim if prices dont go up according to the local economy situation? If they officially switch over to the US Dollars then does that mean they now have a inflation rate of lets say 3% or whatever? :confused:
 
Ockie said:
How does this work? If they still have hyper inflation then the costs will still rise in Dollar terms not so, or does inflation not influence items priced in US Dollars locally in Zim? If that is the case, then how do they actually determine the inflation rate in Zim if prices dont go up according to the local economy situation? If they officially switch over to the US Dollars then does that mean they now have a inflation rate of lets say 3% or whatever? :confused:
Click to expand...
Almost all inflation is produced by governments printing more money than the sum of the value of goods and services produced and traded in that denomination.

Zimbabwe, by using USD, is now subject to the inflation rate in the USA.
 
Arthur said:
Almost all inflation is produced by governments printing more money than the sum of the value of goods and services produced and traded in that denomination.

Zimbabwe, by using USD, is now subject to the inflation rate in the USA.
Click to expand...

Oh ok, so if the USA goes on a printing spree and the inflation increases then so does the inflation rate in ZIM?

Perhaps we should dump the Rand and also use the Dollar :)

We import more than we export anyway and imports are priced in Dollars in most cases. Would make transactions simpler and cheaper propably.
 
Arthur said:
Usually only happens when the tinpot dictators have extracted all possible wealth from citizens and wrecked the economy. By then it's too late - your savings will have been plundered and your pension devalued to zero. If our overlords are smart, we'll abolish the ever-diminishing ZAR and switch to USD now. That should buy us a little time before the USD itself sinks into oblivion from all the fiat money and QE over the past while.

If you have the means, get out of paper and into tangibles.
Click to expand...

There's absolutely no reason why they'd need to change to a foreign currency. You're effectively saying that all emerging markets need to switch to a reserve currently because nearly all of them are inn free fall due to the lagging world economy. It'd only make sense for SA to think to switch if we had hyper inflation and they had to resort to pegging the currency at some artificial level. Even China still refuses to float their currency to keep benefiting from their relationship with the US who obviously hate it but can't do anything more than complain.
 
Ockie said:
Oh ok, so if the USA goes on a printing spree and the inflation increases then so does the inflation rate in ZIM?

Perhaps we should dump the Rand and also use the Dollar :)

We import more than we export anyway and imports are priced in Dollars in most cases. Would make transactions simpler and cheaper propably.
Click to expand...
SA has been printing extra money for decades, long before the ANC. So do most countries these days, following that mad Brit John Maynard Keynes. We've just been doing it faster than our main trading partners - that's why it takes R19.63 to buy one British Pound and R12.63 to buy One US Dollar. In 1962 one could buy a US dollar for R0.80, and a Pound for R1.95. There is no other reason.
 
I had the honour of visting ZimBobWe on business - or rather the lack of - last year.

The US dollars in circulation have seen more pockets and palms than the US treasury had intended .... these notes are like green rags.

Pull out a new note and there is the whole check to see if its real.

At the time, there was talk about using the Chinese Yuan ....
 
Where does Zim get all these Dollars? A country will only have so much of foreign exchange in their vaults. If lets say SA switched to the US Dollar, there would surely not be nearly enough in reserve to fuel the daily transactions in our local economy? :confused:
 
the problem is not the currency, you ****.... fix the country and the currency will get better
 
Ockie said:
Where does Zim get all these Dollars? A country will only have so much of foreign exchange in their vaults. If lets say SA switched to the US Dollar, there would surely not be nearly enough in reserve to fuel the daily transactions in our local economy? :confused:
Click to expand...
There are more than enough USD bills and coins in circulation on the planet to handle a little place like SA. Besides, most of the stuff lives on hard drives.
 
Arthur said:
There are more than enough USD bills and coins in circulation on the planet to handle a little place like SA. Besides, most of the stuff lives on hard drives.
Click to expand...

Yes, but I am talking about local reserves of the US Dollar. The banks will and reserve bank will only have so much on hand. Not like we can just email China and ask them to give us some of theirs.
 
Ockie said:
Yes, but I am talking about local reserves of the US Dollar. The banks will and reserve bank will only have so much on hand. Not like we can just email China and ask them to give us some of theirs.
Click to expand...

Lots of people go there to work, and fix things, and they get given dollars in cash to use for subsistence. That then introduces more of it. But that's only a small portion.
 
Ockie said:
Yes, but I am talking about local reserves of the US Dollar. The banks will and reserve bank will only have so much on hand. Not like we can just email China and ask them to give us some of theirs.
Click to expand...

Sure you can, you then either mail them bricks of gold in exchange for more $ or take out some sort of loan (the latter is more likely).

Either way, i won't be surprised if the main reason Zim is switching is because they simply do not have the labour/skills/efficiency to print their own money anymore. It's like Nigeria and their Oil. They sit on massive oil reserves, but guess who has just run out of Diesel? Nigeria. They can't refine their own oil, it's cheaper to sell + transport it and buy the refined Diesel back than doing it themselves.

SA is going the same road, can't farm, can't manufacture, can barely get gold/platinum out of the ground. It will soon be cheaper to [re]- import our own food and gold than try to process it here....oh wait...
 
Ockie said:
Yes, but I am talking about local reserves of the US Dollar. The banks will and reserve bank will only have so much on hand. Not like we can just email China and ask them to give us some of theirs.
Click to expand...
When you switch from local paper to USD it's not out of reserves. All it requires is 1. Law legalising USD as legal tender and banks to hold, and 2. About a week for Treasury to catch up. Done.
 
Anyone know where I get my hands on few of their notes? I'll happily exchange Rands for some of their notes. Guarantee they'll be worth tons more when I eventually sell them on E-Bay. Seriously. It would be fun to own their Reserve Bank.

No for real now... it would be great to own some of their notes. Would make a great conversation piece :)
 
McT said:
Anyone know where I get my hands on few of their notes? I'll happily exchange Rands for some of their notes. Guarantee they'll be worth tons more when I eventually sell them on E-Bay. Seriously. It would be fun to own their Reserve Bank.

No for real now... it would be great to own some of their notes. Would make a great conversation piece :)
Click to expand...

They sell them at the curios shop in the departure lounge at Harare International airport
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X