So essentially a return to gold standard and away from from fiat currency.
There’s one sure way to control inflation: stop printing money. The government needs to stop spending in excess of tax revenues, and fire excess government employees.
I imagine that these gold coins will become popular especially with Zimbabwe citizens as a way to protect their wealth considering how high their inflation rate is. I get the feeling that both gold and silver will soon become popular again everywhere.
That’s actually great news for Zimbabwe.
192% means that prices only tripled from the last year.
After going through hyperinflation, Zimbabwe prices are getting stabilized!
Sounds like they are not too far away from getting invaded for “democracy” and “LGBT rights”.
> 192%
We can catch up!
This is zimbabwe so one is compelled to ask what the “gold” is made of.
I would guess that whoever thought this up read a history book which detailed how the Weimar Republic ended its own hyperinflation and once again got a stable currency.
The Weimar Republic was stuck with the Imperial policy to raise money by turning their gold backed currency into a fiat currency, meaning they could inflate its value beyond the amount of gold they had.
WWI reparations were outrageous, so they decided to print money like crazy, which caused hyperinflation to their paper currency, the Papiermark.
The way out of this was to make a second currency backed by gold, the Rentenmark, which was used exclusively between big businesses and the government. It did not inflate, because it could not. And it had a strong stabilizing effect on the German economy.
This is what they likely hope will happen with the Zimbabwe 1 Troy ounce gold coin. It is not intended to be a public currency.
But eventually, once their economy has stabilized, Germany then and Zimbabwe today will need yet another currency, a public currency backed with gold. In Germany’s case it was the Reichsmark, which was gold back and survived the war.
Not having learned their lesson, and wanting a lot of cash to pay for a welfare state, the German government again replaced their gold backed Reichsmark with the fiat currency Deutschmark.