As Zimbabwe tries new currency, skeptics reach for the old

[webfact]

As Zimbabwe tries new currency, skeptics reach for the old

By FARAI MUTSAKA

 

HARARE, Zimbabwe (AP) — Zimbabwe's 100-trillion-dollar bill, a relic of economic ruin, has been an international joke and an online collector's item for years. But this banknote (14 zeros, if anyone is counting) is getting a warmer embrace from Zimbabweans than a new local currency the government is introducing this month.

 

"I hear people complain about poverty, cash problems and all those things. I am doing pretty well," Willard Mandona, a street currency trader, told The Associated Press. He offers U.S. 10 cents for a $10 trillion note, U.S. 20 cents for a $20 trillion note and $1 for an old $50 trillion note.

 

"The $100 trillion note is the ultimate prize because I can sell it for $20," Mandona said. The out-of-circulation notes are popular with tourists and are collector's items on eBay, where a $100 trillion note was selling for up to $25 this week.

 

Few Zimbabweans trust that the new currency, called bond notes, will have a similar worth.

 

Zimbabwe jettisoned the trillion-dollar notes in 2009 when the government of President Robert Mugabe had printed so much of the currency that hyperinflation reached 500 billion percent, according to the International Monetary Fund. This once prosperous southern African country then began operating on the U.S. dollar.

 

Relative stability followed, and inflation was brought under control. Other currencies also became legal tender including the Chinese yuan, the South African rand, the British pound, the Botswana pula, the Euro, the Indian rupee and the Japanese yen. But more than 95 percent of transactions in Zimbabwe are made with the U.S. dollar, according figures from the central bank, the Reserve Bank of Zimbabwe.

 

However, the dollar is now in short supply because of low imports, with the trade deficit rising from $400 million in 2005 to $2.5 billion last year. People have money in the banks, but they cannot get cash because the banks do not have adequate U.S. dollar notes. The government has been short of cash and has been late in paying civil servants, teachers, police and army.

 

The economic frustration fueled widespread anti-government protests this year.

 

The new local bond notes are to be valued at par with the U.S. dollar to ease bank shortages. They will be anchored by a $200 million U.S. bond facility with Afreximbank. At first, $65 million worth of bond notes will be released, with the balance introduced gradually, according to Reserve Bank governor John Mangudya.

 

The plan for the new currency has provoked widespread hostility, with street protests against the release of bond notes and court applications from opposition groups to stop it.

 

Meanwhile, dozens of men and women, some carrying infants, line the streets to buy and sell both U.S. dollars and the old Zimbabwean ones. Some wave placards with their mobile telephone numbers.

 

The cash shortages will continue because of Zimbabwe's inability to increase exports and its failure to attract meaningful foreign investment, said Harare-based economist John Robertson.

 

"It's getting worse because people are taking out the few dollars they were keeping in banks," he said.

 

It is a different story at the banks. Lines that used to snake up to a kilometer (half a mile) long are getting shorter.

 

"Why should I go to the bank when I know I won't get any money? Cash is now found on the street," said Esther Sandiero, a trader in mobile phones and other electronic gadgets who was trying to withdraw her money in U.S. dollars before banks start issuing the new bond notes.

 

She was lucky to find her bank allowing withdrawals of up to $200, although the money came in tattered, dirty $1 notes.

 

"They said they don't have any bigger denominations. It's better than nothing. The other day I was offered coins, can you imagine? Fifty dollars in coins?" she said.

 

Sandiero voiced the conviction of many that the Mugabe government's introduction of bond notes will introduce a new spiral of inflation: "They will do what they know best: Print more and more until it is worthless."

 

-- © Associated Press 2016-11-04

[Andaman Al]

The breadbasket of Africa now with only remnants of mouldy stale crumbs left. Nice legacy Mr Mugabe!

[Kerryd]

Living proof that the UN is a corrupt, ineffective entity that dances to the tune of a certain select few of it's members, regardless of their true intentions.

 

Ever since Mugabe took power inflation in Zimbabwe has been climbing. After he passed a law (that had been rejected in a nationwide referendum) that authorized blacks to seize "white" farms without compensation, inflation in Zimbabwe began to skyrocket and in a few short years went from single digits to double to triple and quadruple digit inflation. 

Mugabe violently and ruthlessly attacked any who opposed them and had no problem at all with having opposition leaders thrown in jail for little or no reason.

 

Yet the UN (and the "West") did next to nothing about any of it.

 

Inflation, corruption and violence continued to soar to the point where the government was printing bills worth 10 BILLION (Zimbabwe) dollars only to replace them with ones worth 50 BILLION weeks later, and then replacing those with even higher denomination notes weeks later again, until they were printing notes in denominations of TRILLIONS of  dollars.

When that didn't work they simply decided to start cutting zeros off. 3 times they devalued their currency by simply cutting off zeros, to the point they had cut off over 26 zeros ! 

 

Yet despite the ongoing oppression, corruption and violence, the UN (and the "West") are doing nothing.

 

The "Arab Spring" saw uprisings on various scales in numerous Arab/African countries.

Libya used force to put down the uprisings - The UN (and the "West") sent in the bombers and supported the overthrow of the government. 

Syria used force to put down the uprisings - the "West" sends in support to the "rebels" and nearly sends in the bombers to help overthrow the government.

 

Saudi Arabia used force to put down uprisings - barely a whisper of objection heard. (Major US ally - mere coincidence.)

Qatar used force to quell uprisings - barely a whisper of objection heard. (Home to a major US Navy fleet - mere coincidence.)

Bahrain (with help from Saudi Arabia) used force to quell uprisings - barely a whisper of objection heard. (Home to a major US Air base - mere coincidence.)

 

Iranian police cracked down on protesters and arrested protest leaders - barely a whisper of objection heard.

Many other countries used force to put down uprisings and protests - barely a whisper of objection heard.

(In Zimbabwe, Mugabe had an opposition leader and dozens of other people that were meeting to discuss the uprisings arrested, imprisoned, tortured and charged with treason - barely a whisper of objection heard from the West.)

As a former co-worker of mine (who was from Zimbabwe) once said "What do we export ? Potatoes, not oil. So no one cares." Seems as glaringly true today as it did then. 

Another former co-worker thought that when the UN decided to help overthrow Qaddafi (technically in violation of their own mandate but allowed by using a loophole), they did it because "it was a fight  they thought they could win". He (seriously) thought that the UN wasn't doing anything about Zimbabwe because it "wouldn't be worth it" ! As though the UN picks and chooses who to invade (and overthrow) based on whether or not it would be "worth the effort". (The guy was a former Air Force pilot in case anyone wondered about his intelligence level.)

Well, maybe he wasn't off the mark at all. Who wants to overthrow Mugabe for potatoes ?

 

Got to wonder what would happen if suddenly Zimbabwe discovered huge oil reserves in it's territory (and especially if they announced they were going to sell that oil to China instead of the US or Europe). 

[Andaman Al]

51 minutes ago, Kerryd said:

Living proof that the UN is a corrupt, ineffective entity that dances to the tune of a certain select few of it's members, regardless of their true intentions.

 

Ever since Mugabe took power inflation in Zimbabwe has been climbing. After he passed a law (that had been rejected in a nationwide referendum) that authorized blacks to seize "white" farms without compensation, inflation in Zimbabwe began to skyrocket and in a few short years went from single digits to double to triple and quadruple digit inflation. 

Mugabe violently and ruthlessly attacked any who opposed them and had no problem at all with having opposition leaders thrown in jail for little or no reason.

 

Yet the UN (and the "West") did next to nothing about any of it.

 

Inflation, corruption and violence continued to soar to the point where the government was printing bills worth 10 BILLION (Zimbabwe) dollars only to replace them with ones worth 50 BILLION weeks later, and then replacing those with even higher denomination notes weeks later again, until they were printing notes in denominations of TRILLIONS of  dollars.

When that didn't work they simply decided to start cutting zeros off. 3 times they devalued their currency by simply cutting off zeros, to the point they had cut off over 26 zeros ! 

 

Yet despite the ongoing oppression, corruption and violence, the UN (and the "West") are doing nothing.

 

The "Arab Spring" saw uprisings on various scales in numerous Arab/African countries.

Libya used force to put down the uprisings - The UN (and the "West") sent in the bombers and supported the overthrow of the government. 

Syria used force to put down the uprisings - the "West" sends in support to the "rebels" and nearly sends in the bombers to help overthrow the government.

 

Saudi Arabia used force to put down uprisings - barely a whisper of objection heard. (Major US ally - mere coincidence.)

Qatar used force to quell uprisings - barely a whisper of objection heard. (Home to a major US Navy fleet - mere coincidence.)

Bahrain (with help from Saudi Arabia) used force to quell uprisings - barely a whisper of objection heard. (Home to a major US Air base - mere coincidence.)

 

Iranian police cracked down on protesters and arrested protest leaders - barely a whisper of objection heard.

Many other countries used force to put down uprisings and protests - barely a whisper of objection heard.

(In Zimbabwe, Mugabe had an opposition leader and dozens of other people that were meeting to discuss the uprisings arrested, imprisoned, tortured and charged with treason - barely a whisper of objection heard from the West.)

As a former co-worker of mine (who was from Zimbabwe) once said "What do we export ? Potatoes, not oil. So no one cares." Seems as glaringly true today as it did then. 

Another former co-worker thought that when the UN decided to help overthrow Qaddafi (technically in violation of their own mandate but allowed by using a loophole), they did it because "it was a fight  they thought they could win". He (seriously) thought that the UN wasn't doing anything about Zimbabwe because it "wouldn't be worth it" ! As though the UN picks and chooses who to invade (and overthrow) based on whether or not it would be "worth the effort". (The guy was a former Air Force pilot in case anyone wondered about his intelligence level.)

Well, maybe he wasn't off the mark at all. Who wants to overthrow Mugabe for potatoes ?

 

Got to wonder what would happen if suddenly Zimbabwe discovered huge oil reserves in it's territory (and especially if they announced they were going to sell that oil to China instead of the US or Europe). 

 

 

To late for the west now. China have their foot in the door and are just waiting. They realise we can't eat oil but can eat potatoes!

[elgordo38]

2 hours ago, Andaman Al said:

The breadbasket of Africa now with only remnants of mouldy stale crumbs left. Nice legacy Mr Mugabe!

I am sure Mr. Mugabe has plenty of both. This sly old fox has been milking the country for years. He has made a joke out of the UN and all these so called International bodies. 

[elgordo38]

The rest of the world should take a lesson from this it will not be long before we have a new currency called a digital currency to go along with our casino lifestyle. Give the IRS the wrong answer and zap they push a button and your account is emptied. Like Las Vegas you will leave with empty pockets and the government will be the big winner. 

[soalbundy]

10 minutes ago, elgordo38 said:

The rest of the world should take a lesson from this it will not be long before we have a new currency called a digital currency to go along with our casino lifestyle. Give the IRS the wrong answer and zap they push a button and your account is emptied. Like Las Vegas you will leave with empty pockets and the government will be the big winner. 

unless we all go back to bartering, people always find a way to avoid the tax authorities, in fact they find a way around anything. A car company that i worked for brought out a sophisticated fool proof system to stop your car being stolen, a method to overcome this was on the streets before the first new car had been sold, people are ingenious when it comes to money   

[soc]

Of course the west couldn't give a rat's a@$ about Zimbabwe(Zimbabwe-a dirty word when l was there!).

There is no OIL there.

Had to laugh when l saw a documentary about the locals trying to farm on 5 or 10 acres & one "War Veteran", now farmer, said that he was "angry" with the white farmer who formally own the farm, as he wouldn't show the "veteran" how to successfully farm the land!

[Jonmarleesco]

And still Mugabe is hanging in there.

[Jonmarleesco]

4 hours ago, elgordo38 said:

'Give the IRS the wrong answer and zap they push a button and your account is emptied.'

HMRC already have that ability.

[JetsetBkk]

1 hour ago, Jonmarleesco said:

And still Mugabe is hanging in there.

 

He must have incredibly good security.

 

[KBsinter]

I hate him with a passion...............