Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Zimbabwe Can't Paper Over Its Million-Percent Inflation Anymore [no more banknote paper]
The Wall Street Journal ^ | 2008-07-02 | Marcus Walker & Andrew Higgins

Posted on 07/01/2008 8:44:20 PM PDT by rabscuttle385

Robert Mugabe has kept his embattled regime in Zimbabwe afloat on a sea of paper money. Now, he'll have to try to do it without the paper.

The Munich-based company that has supplied Zimbabwe with the special blank sheets to print its increasingly worthless dollar caved in to pressure on Tuesday from the German government for it to stop doing business with the African ruler.

Mr. Mugabe's regime relies on a steady supply of the paper -- fortified with watermarks and other antiforgery features -- to print the bank notes that allow it to pay the soldiers and other loyalists who enable him to stay in power. With an annual inflation rate estimated at well over 1 million percent, new notes with ever more zeros need to be printed every few weeks because the older ones lose their worth so quickly.

Giesecke & Devrient -- a secretive, family-owned Bavarian company that once made its money churning out worthless cash for the doomed Weimar Republic in the 1920s -- has been airlifting tons of blank notes to the Zimbabwean capital Harare. The company, which has been doing business with the African nation since before Mr. Mugabe took power in 1980, is one of the few sources in the world for the specialized paper that is so important in an age when computers and laser printers have made forgery easy.

(Excerpt) Read more at online.wsj.com ...


TOPICS: News/Current Events
KEYWORDS: hyperinflation; mugabe; papermoney; zimbabwe
Navigation: use the links below to view more comments.
first 1-2021-39 next last
The opposition MDC says that without German supplies to keep the printing presses rolling, the central bank, run by Mr. Gono, a stalwart ally of Mr. Mugabe, will have trouble pumping out money in ever greater volumes.
Hyperinflation, says Steve H. Hanke, a professor of applied economics at Johns Hopkins University in Baltimore and an expert on the subject, "is a very simple equation" -- stop printing money and it stops.

Every paper money experiment in history has ended badly, and Mugabe's Zimbabwe dollar is no exception. Governments that emit bills of credit (regardless of what backs the bills) always eventually succumb to the temptation to inflate the currency in order to default (stealthily) on past debts.

Mugabe is toast. It's only a matter of time.

1 posted on 07/01/2008 8:44:20 PM PDT by rabscuttle385
[ Post Reply | Private Reply | View Replies]

To: Clive

.


2 posted on 07/01/2008 8:45:27 PM PDT by Libertarianize the GOP (Make all taxes truly voluntary)
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385; All
...always eventually succumb to the temptation to inflate the currency in order to default (stealthily) on past debts.

Or, in Mugabe's case, not so stealthily.

Note that recent unofficial inflation rate figures are over 9 million percent on an annual basis and are expected to exceed 10 million percent this month.

3 posted on 07/01/2008 8:47:44 PM PDT by rabscuttle385 ("Facts are stubborn things." –Ronald Reagan)
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385

The end of Mugabe draws near.


4 posted on 07/01/2008 8:47:44 PM PDT by Free Vulcan (No prisoners. No mercy. Fight back or STFU!!!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385
They could use any paper, no one would counterfeit worthless money, besides by the time someone knows what the new note looks like it is worthless and must be replaced.
5 posted on 07/01/2008 8:48:24 PM PDT by Libertarianize the GOP (Make all taxes truly voluntary)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free Vulcan

Can’t come too soon, or to a nicer guy.


6 posted on 07/01/2008 8:48:57 PM PDT by karnage
[ Post Reply | Private Reply | To 4 | View Replies]

To: rabscuttle385

Jobu, say Robert is very bad......./Just Asking - seoul62.......


7 posted on 07/01/2008 8:51:50 PM PDT by seoul62
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385
With respect, poor monetary policy is the very least of Mugabe's mistakes. What essentially happened is that they ran out of stuff to steal and in order to maintain the illusion that the thieves were going to stay rich forever he just started printing money. There were price controls in the government stores, so as long as one could shop there one really was still relatively wealthy. Until the shelves went empty.

The real problem was not making anything more to steal, including food. And ZANU-PF couldn't do that because it had declared the producers the enemy and was busy suppressing them.

True, printing money under these conditions was an insane policy but the real economic problem was supply-side, caused by political stupidity. IMHO.

8 posted on 07/01/2008 8:52:43 PM PDT by Billthedrill
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385

Kill Mugabe and the next 250 below him.

Publicly


9 posted on 07/01/2008 8:54:05 PM PDT by wastedyears (Obama is a Texas Post Turtle.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385

Mugabe may well be toast, but tragically he has taken out a few people with him, and destroyed a once-productice country. Let’s talk about crimes against humanity, shall we? Oh, and by the way it’s not an “election” when the opposition candidate is arrested, and his relatived kidnapped, prior to the “runoff” election. (Which the opposition won.)


10 posted on 07/01/2008 8:54:28 PM PDT by coloradan (The US is becoming a banana republic, except without the bananas - or the republic.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385

Maybe Obama’s admitted Afro-centric preacher, the Rev Wright, can fix Zimbawbe. After all, they recognize Africa as the mother country; maybe they should actually spend some time there.


11 posted on 07/01/2008 8:55:39 PM PDT by hsalaw
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free Vulcan
The end of Mugabe draws near.

It may be nearer than we think.

Under Mugabe, Zimbabwe's economy has been ravaged to the point where there's nothing left. There is no more productive activity going on, and political conditions have scared off all the foreign investors. Zimbabwe's own population is fleeing in terror into neighboring countries.

At some point, likely in the near future, there will literally be nothing left to steal and nothing left that Mugabe can use to pay the folks who keep him in power. Either he will be spirited out in the dead of night or his own folks will kill him, like any other common dictator.

12 posted on 07/01/2008 8:56:08 PM PDT by rabscuttle385 ("Facts are stubborn things." –Ronald Reagan)
[ Post Reply | Private Reply | To 4 | View Replies]

To: coloradan
Mugabe may well be toast, but tragically he has taken out a few people with him, and destroyed a once-productice country.

The tragedy of Zimbabwe should be a lesson for the United States and for all other Western free-market economies. Follow down the path of tyranny, whether it be at the hands of a mob (democracy) or those of a dictator, and you will end up in the dung pile of history as a failed nation-state, along with Zimbabwe and the rest.

13 posted on 07/01/2008 9:01:03 PM PDT by rabscuttle385 ("Facts are stubborn things." –Ronald Reagan)
[ Post Reply | Private Reply | To 10 | View Replies]

To: rabscuttle385

14 posted on 07/01/2008 9:01:35 PM PDT by george76 (Ward Churchill : Fake Indian, Fake Scholarship, and Fake Art)
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385
Print the money on toilet paper, and the value of the money will instantly increase by ten fold at least.
15 posted on 07/01/2008 9:03:40 PM PDT by Ratblaster ( Obama's house, Rezko's yard)
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385

Isn’t Mugabe changing the name of the country to “ZimBobMe.”

The country’s flag will now have his picture above the name of the country.

Bob Mugabe deserves to hang from a meathook like Mussolini did.


16 posted on 07/01/2008 9:07:52 PM PDT by Nextrush (MCCAIN, OBAMA, CLINTON......WHAT A CHOICE?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385
With an annual inflation rate estimated at well over 1 million percent, new notes with ever more zeros need to be printed every few weeks because the older ones lose their worth so quickly.

Reporters are SUCH idiots.

They don't flood the market with HUGE bills because prices are rising. Prices are rising because they are flooding the market with HUGE bills.

If there are 100 pigs for sale and $1000 to buy them, the pigs will costs $10 each. If the government wants 1/2 of the pigs, it will magically print another $1000. Now the pigs cost $20 each. The people can buy 1/2 of them and the government can buy the others. It is how you tax poor people.

17 posted on 07/01/2008 9:11:59 PM PDT by Onelifetogive (Seriously, is freedom so complicated?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385

I wonder how much a roll of toilet paper costs in Zimbabwe — and how much money could be saved by cutting out the middleman.


18 posted on 07/01/2008 9:22:00 PM PDT by Ronin (Is there some rule that says that when an evil man gets sick, we must pretend he was saint?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385

I think the only real economy left in Zim is underground barter.


19 posted on 07/01/2008 9:23:53 PM PDT by antiRepublicrat
[ Post Reply | Private Reply | To 12 | View Replies]

To: rabscuttle385
The tragedy of Zimbabwe should be a lesson for the United States and for all other Western free-market economies. Follow down the path of tyranny, whether it be at the hands of a mob (democracy) or those of a dictator, and you will end up in the dung pile of history as a failed nation-state, along with Zimbabwe and the rest.

I think you miss the point. Mugabe has ruled for 2 generations with an iron fist and has billions of dollars stashed away in foreign banks. There is a lesson there for American leftists, but not the one you want them to learn...

20 posted on 07/01/2008 9:28:09 PM PDT by Onelifetogive (Seriously, is freedom so complicated?)
[ Post Reply | Private Reply | To 13 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-39 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson