Where the Money Isn’t - A must read from Mugabe's paradise island

Newsweek ^ | Newsweek

[Santino Sonny Corleone]

Harare—John Robertson, a Zimbabwean economist, went to the dentist yesterday with a painful tooth that needed urgent work, but before he could get it done, he had to arrange payment. His choices were these: Either he could pay in Zim dollars, in which case he'd need a bag of them, because the bill for his dentistry was $1.3 trillion, plus the limit for cash withdrawals from his bank account was only $25 billion daily. Or he could pay by check on his Zimbabwean bank account, in which case, since it takes a week to clear the check and the Zim dollar is plummeting in value, he'd have to write the check for double the amount, $2.6 trillion. Or he could just go out and find foreign exchange, either South African rand or U.S. dollars, about $50. "My only choice was to go out and find some foreign exchange."

[Santino Sonny Corleone]

and Happy (illegally, unilaterally declared ;) ) Independence Day!

[goldstategop]

A few billion dollars buys nothing in Zimbabwe. So pay in foreign currency.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[Extremely Extreme Extremist]

plus the limit for cash withdrawals from his bank account was only $25 billion daily

(Dave Chappelle's voice) "I'm rich, bee-yotch!"

[goldstategop]

Not a lot when that 25 billion is worth 25 cents, thanks to astronomical inflation.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[Ratblaster]

But, they're out from under Whitey's yoke.

[goldstategop]

But they still need whitey - ahem the Germans - to print worthless dollar bills for them.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[Santino Sonny Corleone]

“Officially, one U.S dollar is worth about 30,000 Zimbabwean dollars. As of last week the real price on the black market was about 35 million dollars, or 1,166 times the official rate. The bill for a simple meal I shared with five other people at an unassuming cafe in Zimbabwe last week came to 581 million Zimbabwean dollars. The black market value: US$21. If I had paid according to the bank’s rate? US$19,366.”

US$21 versus US$19,366
http://www.newsweek.com/id/129010

[goldstategop]

People survive in Zimbabwe since every one ignores the official rate. Or they barter. Meanwhile, the regime's thugs are stripping the country's assets to keep themselves in power.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[Vince Ferrer]

But they still need whitey - ahem the Germans - to print worthless dollar bills for them.

They've stopped doing that this week.

[Donald Rumsfeld Fan]

Robertson, the economist, says the Reserve Bank has plates for a new currency, without all the zeroes, which it could issue.....

"You can rig an election,".... "but you can't rig an economy, ...... I don't think they can survive very long, lop off all the zeroes, the zeroes would crawl right back in. They're trading in fiction, anyone can see that."

"The tipping point will come when the people with the guns say don't even think of paying us in Zimbabwean dollars, we want foreign exchange. We want something we can actually spend."

[goldstategop]

You could put all that in a wheelbarrow and its good for one thing - going up in smoke.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[rabscuttle385]

Such moves have been made necessary, in his view, by the sanctions on Zimbabwe and by denial of credit facilities to it by international institutions. "No one wants to lend money to this country," he says.

Who the hell would lend money in a country where you never know if the government will arbitrarily void the loan contract at its whim, a la the seizure of white farms by Mugabe's regime?

[goldstategop]

DUH. Zimbabwe's domestic credit is worthless and there's security of life, limb and property. An investor would have to be insane to invest under those kinds of conditions.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[goldstategop]

I meant no security of life, limb and property.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[Santino Sonny Corleone]

Ok, I brought the other 12 cents. Are we even?

[arthurus]

A new currency that cuts off all the zeroes is just like getting a debt fix from one of those outfits that promises to consolidaty your debt and cut your payments in half. They may even fix someone’s immediate situation but they have not changed his habits and outlook. He will be far deeper in debt a year or two later because that “fix” just gave him room to take on more.