Posted on 08/19/2022 3:47:18 AM PDT by EBH
HARARE, Zimbabwe (AP) — After working as an overnight security guard at a church in Harare’s impoverished Mabvuku township, Jeffrey Carlos rushes home to help his wife fetch water to sell.
Prolonged water shortages mean most residents of the capital city of more than 2.4 million must source their own water. Carlos is lucky because the property he rents has a well and his family can haul up buckets of water to sell to neighbors.
“This is our gold,” he says of the well water.
“If we are lucky, we can sell up to 12 buckets of water (per day) for $2,” said the 50-year-old father of three. That’s about enough money to buy the family’s food for the day, he said.
Rising prices and a fast depreciating currency have pushed many Zimbabweans to the brink, reminding people of when the southern African country faced world-record inflation of 5 billion% in 2008. With inflation jumping from 191% in June to 257% in July, many Zimbabweans fear the country is heading back to such hyperinflation.
o prevent a return of such economic disaster, President Emmerson Mnangagwa’s government last month took the unprecedented step of introducing gold coins as legal tender. The country’s central bank, the Reserve Bank of Zimbabwe, said that because the value of the one-ounce, 22-carat coins would be determined by the international price of gold they will help tame the runaway inflation and stabilize the nation’s currency
(Excerpt) Read more at apnews.com ...
$10E15 would fit.
I understand the benefit of physical possession, but I’ve been told for years that gold/silver is a “store of wealth” So wouldn’t it’s value be sensitive to inflation, adjusting up and down related to it? (I already know this doesn’t happen, but I don’t understand why)
Gold and silver are a store of value because a govt via its central banks can’t just create more out of thin air.
It’s also compact, divisible, uniform across the world, does not rot or degrade, etc.
Every time a govt “issues” more “currency” out of thin air (using central bank debt) that currency’s value is inflated away. America is on the same path as Zimbabwe, Zimbabwe is just a more radical example.
I think you’re still thinking in terms of dollars for gold, or dollars for silver. There’s a finite amount of gold or silver, so it retains value when paper dollars lose theirs.
A better way to think of it is in terms of hard goods. So, rather than gold for inflated dollars, think gold (or silver) for something tangible, like bread. So, just to throw numbers out, we’ll say that a loaf of bread is worth one ounce of silver, or ten paper dollars. It follows that an ounce of silver is worth ten dollars. However, a madman seizes the presses, and makes lots more paper dollars. Now it takes a hundred dollars to buy that loaf of bread, since with so many more of them, they have less value. However, the silver is still a finite commodity, like the bread, so an ounce of silver still gets you a loaf of bread, or you could get a hundred dollars for it. The amount of silver and bread did not rise, so their value in proportion to each other remained the same.
Does that explain any better?
Zimbabwe virtually stays in super high inflation to hyperinflation. Reminder: Zimbabwe hyperinflation of 2007-2008.
Gold would only be hoarded by those who have the means to purchase it in the first place. Sure it is doomsday money, but the advantages gold presents are still highly asymmetrical.
When any country finds itself in a hole, stop digging. Or at least turn the shovels to cutting a ramp so it is possible to walk back up out of the hole.
Thanks for these answers.
Zimbabweans... Lol... Why doesn’t that sound grammar correct?
How does one have means to purchase gold with a totally worthless currency, a currency only recognized inside their country?
Be Africa: 600 million acres of uncultivated arable land, 60% of the global total. Starve. Flee to Europe by the millions for food.
Maybe we should offer all the oppressed people of African descent in our country the opportunity to emigrate back to their ancestral lands and pay their way. It would be the humanitarian thing to do.
And I mean better in every way.
A gold coin is very expensive to hold in Zimbabwe because you need to hire a private army to protect it.
;-)
Good post—folks who have relatives in Nigeria tell me that young Nigerian children have two main goals in life:
Either join the government to flee to Western Europe or the US.
What is important is why they believe this.
The average citizen of Nigeria is subject to looting from the government and/or local gangs/rebels.
Therefore they have to hide any wealth—even from their neighbors.
It is a horrible way to live—and it is what the globalists want to happen to us.
Allowing citizens to own gold will not curb inflation, unless the government also fixes the price of gold, and makes its paper currency redeemable in gold at the fixed price.
Making its paper currency redeemable for gold at a fixed price will stop inflation by forcing the government to choose between limiting the paper money supply, or quickly depleting it’s gold reserves.
Note: The same strategy could theoretically be applied without gold - the government could establish a market price index of various commodities, and expand or shrink the money supply to keep that index from falling or rising.
Governments have zero incentive to control inflation though, and must be forced to do so by the people - which is why paper money must be redeemable for some tangible commodity.
Any time.
Seconded.
The currency is tied to the value of gold. That ought to stabilize inflation because of the set value of gold.
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