From New Zimbabwe
Sunday, May 15, 2011
The central bank says the country must consider adopting a gold-backed Zimbabwean dollar, warning that the US greenback's days as the world's reserve currency are numbered.
The government ditched the Zimbabwe dollar in 2009 after it had been rendered worthless by record inflation levels, and adopted multiple foreign currencies with the US dollar, the South African rand, and the Botswana pula being the most widely used.
Finance minister Tendai Biti says the country needs at least six months of import cover and a sustainable track record of economic growth, inflation, stability and above 60-percent capacity utilisation in industry before the Zim dollar can be brought back into circulation.
However, central bank chief Dr Gideon Gono said the country should consider adopting a gold-backed currency.
"There is a need for us to begin thinking seriously and urgently about introducing a gold-backed Zimbabwe currency that will not only be stable but internationally acceptable," Gono said in an interview with state media. "We need to rethink our gold-mining strategy, our gold-liberalisation and marketing strategies as a country. The world needs to and will most certainly move to a gold standard and Zimbabwe must lead the way."
Gono said the inflationary effects of United States' deficit financing of its budget were likely to impact other countries, leading to resistance of the greenback as a base currency.
"The events of the 2008 global financial crisis demand a new approach to self-reliance and a stable mineral-backed currency, and to me gold has proven over the years that it is a stable and most desired precious metal," Gono said. "Zimbabwe is sitting on trillions worth of gold reserves and it is time we start thinking outside the box, for our survival and prosperity."
Hah! Gono, you utter noob. I've got a dozen of your 100 trillion dollar banknotes with your signature here. I remember you.
ReplyDeleteHi Mike,
ReplyDeleteYou might want to cash in those notes now:
The hottest commodity among currency collectors is Zimbabwe's 100-trillion-dollar bill http://on.wsj.com/lKHrLZ
Wow! This is coming from the man who presided over hyper inflation and whose signature appears on the worlds largest ever bank note denomination, now worthless. Perhaps its the same logic that suggests entrepreneurs are likely to be more successful if they've previously failed because they've learned what doesn't work.
ReplyDeleteIf Zimbabwe could pull it off it would be impressive. From the worlds least stable currency to the most stable in a single leap.
@Jon: That's what bigbanknotes.com is for. I've sold about 80 of them over the past couple years at a hefty mark-up :)
ReplyDelete