What the heck??
They are going to print their own counterfeit US currency, and this counterfeit US currency will be legal tender????
What the heck??? I sure don’t see what this does.
It appears that this is being done with official blessing, but I still don't see how it's supposed to work.
...They are going to print their own counterfeit US currency...
Iran and North Korea have been doing it for years on actual banknote paper, correctcappearance, sequenced serial numbers, and proper feel and texture. You may even have one. .
“They are going to print their own counterfeit US currency, and this counterfeit US currency will be legal tender????”
With ‘Bank of Zimbabwe’ printed on them I don’t think it will be confused with ours.
They are circulating bonds backed by US dollars. The next logical question is what, exactly, backs the US dollars?
When Israel and Lebanon were at war, a misfired SAM or something hit one of the government buildings. Uncut $100 bills were all over the place. The US does not ship that denomination uncut. I guess Zimbabwe is the latest. Next up, Zimbabwe style inflation here.
Affirmative Action Counerfeiting!
Not counterfeit.
Because of rampant (hyper)inflation in the local currency, their people have taken to using the USD for trade amongst themselves. That way, when you receive a USD today for something, you can be reasonably confident that that USD will be worth about the same amount tomorrow.
Problem is that there aren’t enough of those little green pieces of paper in their country for everyone to be able to commence trade (and that once people have them, they prefer to take them out of the country).
Say I want to buy a dozen eggs from you, and you want to use that money to buy a loaf of bread, and the baker wants to use that money to buy...etc. If I don’t have a few Washingtons handy because they are in short supply and someone else happens to be holding them at the moment, the whole exchange can never get started and the best we could do is try to work out some complicated barter system. We don’t have enough “liquidity”.
So some agency that has money to back it up is going to issue a bunch of pieces of paper that effectively say “The Bank of XYZ will exchange this piece of paper for 1 actual USD note” (probably at some time in the future, I barely skimmed the article). This increases the number of notes that can be used so that trade can commence.
It almost seems like the “perfect” combination of the gold standard and fiat money, in a sick kind of way. The currency is backed by something relatively fixed in value (compared to the local economy at least), and yet it’s also backed by something that has value only because our government says it does.