Zimbabwe’s Currency Crashes, Prices Rocket
| AR Articles on Zimbabwe |
|---|
| Zimbabwe: 23 Years of Black Rule (Jul. 2003) |
| Zim Over the Edge (May 2002) |
| War on African Whites (May 2001) |
| Thank You, Mr. Mugabe (Jul. 2000) |
| Heart of Darkness (June 2000) |
| Search AmRen.com for Zimbabwe |
| More news stories on Zimbabwe |
Zimbabwe’s currency plunged to a new record low on Thursday, trading at an average 1 billion to the U.S. dollar on a recently introduced interbank market and triggering massive price increases.
Traders were quoting the Zimbabwean dollar
Analysts said the rapid weakening of the currency was being driven by inflation expectations as well as huge demand for hard currencies.
{snip}
Zimbabwe’s production capacity, largely based on agriculture, has declined sharply mainly due to upheavals on commercial farms following President Robert Mugabe’s drive to seize land from whites to resettle landless blacks.
Prices of basic goods, most of which are now imported, have gone up sharply since the disputed March 29 election in which Mugabe’s ZANU-PF lost its parliamentary majority for the first time in 28 years.
{snip}
PRICES SOAR
Nhiwatiwa said the freeing up of the exchange rate system in the absence of improved production and amid uncertainty over the unresolved election stalemate, had seen prices rising sharply.
For instance, a loaf of bread, which cost about Z$15 million before the polls, now costs about Z$600 million.
A two-litre bottle of cooking oil costs about Z$5 billion, almost equal to an average low-income worker’s monthly wage, piling the misery on a country also grappling with food, fuel, water and electricity shortages, 80 percent unemployment and hyperinflation.
Official figures put Zimbabwe’s annual inflation—the highest in the world—at 165,000 percent in February, but analysts say the figure vaulted as high as 1.8 million percent by May.
{snip}
The benchmark Zimbabwe Stock Exchange (ZSE) industrial index leapt to a new high above 900 billion points on Wednesday, from just over 1.2 billion points at the start of the year.
{snip}
(Posted on June 6, 2008)
Comments
Tonight, Every former Rhodesian in every armchair, in every corner of the world is sipping his drink and saying to himself and others, “I told you so!” Small consolation it must be though.
Posted by Tim Mc Hugh at 6:26 PM on June 6
The underlying pattern of all these failed black regimes is
1. Black fantasy world contacts reality, and collapses.
2. Faced with failure fantasy world only becomes more entrenched.
Mugabe’s fantasy was that blacks were a dynamic force being
victimized and beaten down by the White Man’s World.
Mugabe got control and was free to live out his false vision.
As he met with more and more failure he clung to his fantasy
as an escape from that reality.
This is EXACTLY the pattern that will happen with President Obama.
Posted by at 6:34 PM on June 6
Basically Zimbabwe has gone back to the bush. Soon there will be no inflation …because there will be no concept or use for money.
About Par for an African run country.
Posted by at 6:56 PM on June 6
And they can all thank the U.S. led embargo against the white rulers they once had. Now, look at them. They should all send Jimmy ‘traitor’ Carter a thank you card.
Posted by at 7:38 PM on June 6
The same thing is going to happen here. The market fell 395 points today. The worst is still to come. When the final collapse begins, it will be the excuse for the government to take over everything in the name of national security or some other nonsense. They are after complete control of your lives. We may have defeated the communists in the U.S.S.R., but we haven’t defeated it here.
Posted by N. J. MOE at 7:39 PM on June 6
Proof of Mugabes brilliant economic policies… Everyone in the country is a millionaire!!
Posted by Robert M. at 8:13 PM on June 6
Another example of inspired black rule! Rhodesia, once the breadbasket of Africa and an African example of prosperity and enlightenment, has been utterly destroyed after the assertion of black African political control and the total destruction of democratic institutions.
Surely, this is an isolated phenomenon, due entirely to the failure of the white population to peacefully concede power to the black majority.
Europeans, who desperately need an influx of European genes, should relocate every white Rhodesian to western Europe. The US should do the same, but that would appear to be politically impossible, since the widespread view is that the whites of Rhodesia and soon South Africa are getting their just deserts.
Posted by john at 8:55 PM on June 6
“The benchmark Zimbabwe Stock Exchange (ZSE) industrial index leapt to a new high above 900 billion points on Wednesday, from just over 1.2 billion points at the start of the year.”
_______________
I almost fell out of my chair laughing when I read this. Can you imagine ZIMBABWE having a stock exchange??? Who is running it, the “talented 10th” with average IQ’s of 80?
I am truly speechless.
Posted by at 10:52 PM on June 6
Communist dictators love inflation. It reduces all savings to essentially zero, thus making everyone equally poor and dependent on the collectivity. Except in Zimbabwe, where the dictator is happy to see his people starving to death and escaping to another Black-run country, South Africa, where they are murdered systematically.
Posted by at 10:36 AM on June 7
Ah, the greatness of Mugabe is truly beyond adequate description by poor mortals such as ourselves. An average national leader would seek ways to improve his country, but the mysteriously majestic Mugabe continues on his way, purifying Zimbabwe’s population until they can see the light of his exaulted patriotism.
One day they will see it, through the delerium of nationwide disease and starvation.
Posted by Gary at 11:38 AM on June 7
Expect the exact same thing to happen here. When that black, Obama, gets elected, he’ll drive this already faltering economy right into the ground. Why? They just don’t have the intelligence or ability to lead.
George Manuelian
Atherton, CA
Posted by George Manuelian at 12:27 PM on June 7
This is exactly why White Americans don’t want a black president in the US!
Posted by at 12:29 PM on June 7
A scenario for America, should Obama be made ‘king’. We already have knowledge that the money supply is drying up, that inflation is rampant, that ‘peak oil’ is here, and that the rule of this nation under a non-White leads to complete collapse.
Yup, I can hardly wait for the “Emperor Jones” to be sworn in…..
Posted by AlmostMusicPhD at 1:20 PM on June 7
If every African were as smart as Senator Obama they would not be having this problem. But before they start killing each other in mass, it will be the white tax payer in the United States who will be expected to come to their rescue.
MoMo
Posted by MoMo at 1:44 PM on June 7
“The same thing is going to happen here. The market fell 395 points today. The worst is still to come. When the final collapse begins, it will be the excuse for the government to take over everything in the name of national security or some other nonsense. They are after complete control of your lives. We may have defeated the communists in the U.S.S.R., but we haven’t defeated it here.”
Posted by N. J. MOE at 7:39 PM on June 6
While I agree that difficulties will multiply as we go into the over populated, polluted future, I think you are exaggerating about the stock market a bit like Chicken Little. Just watch the stock market correct (its not THAT bad) as less oil is required for transportation due to technological changes.
The financial privations occuring to us now are due to capitalist greed, not a communist plot. We could have begun planning for the change from oil 30 years ago, but everyone was too lazy. There is just no comparison to the 70 years of the USSR with the Stalinist purges (20 million murdered) or the Five Year Plans, or to China or even Tito’s Yugoslavia. Some people should read up on history and think a little more.
But that we could find ourselves living under martial law in some areas is quite possible, but it will be due to violent society. The likely security forces will be the overwhelmingly white and Christian Blackwater Security forces that made a very early apprearance in New Orleans after Katrina. This scenario was predicted over 20 years ago by a leftest group that feared Bush senior’s aim was to suspend the Constitution and declare martial law due to National Emergencies like terrorist attacks. I ran across that information during the Gulf War. Others predicted that violent areas of cities like Philadelphia and LA would be the first to have permanent areas of martial law. Increased natural disasters that can’t be funded for full recovery and bankrupt insurance companies will leave areas of high crime, with only partially functioning infrastructure, increased no-go zones, etc. Still another group seems to be planning an race war to rid the country of all non-whites. I wonder if those people are actually Blackwater and affiliates? Blackwater answers to no one and constitute the only private army in U.S. history. It has been the aim of the GOP to privatize the military, not Democrats or liberals. Blackwater receives huge amounts of U.S. tax dollars for its operations and in turn donates a huge amount of that same money to the Republican party.
To me, it looks like a combination of all these things will end up occuring. But I think it is still a long way off. I think that we will however continue to ignore all the warning signs and continue to argue and stall while the inevitable collapse takes on its own momentum. Then, the groups that have been preparing the best to take control will go into action. I also think that this will be world wide, not limited to the U.S., but it will look more medeival than modern with nations dividing up into regional patchworks of power. It will be a terrible time to live and most likely, die in.
Posted by Whiteplight at 4:18 PM on June 7
Actually 86.5 or higher, w/o limit to the stratosphere.
Of that group (talented tenth) median IQ around 92.
Can be construed as talented in comparison to the lower ten percent
(around 42.25, I wreckon)
Posted by belle kerve at 5:27 PM on June 7
This is America’s future, Obama or no Obama. We will be majority underclass in a few years. White Americans are docile enough to allow themselves to be sc***ed over, but you can bet non-whites will elect a Hugo Chavez/Jessal Sharpson type who will confiscate the residual wealth of the white minority. American manufacturers have already moved their production facilities out of the US. Soon the HQ’s will go too. The pie will shrink to nothing, but the outraged demands for a bigger slice will go on. Whites too dumb to leave will be dead meat.
‘Before long every ex-pat AR reader in every armchair, in every corner of the world will be sipping his drink and saying to himself and others, “I told you so!” Small consolation it will be though.’
Posted by at 7:13 PM on June 7
Still no lessons have or will be learned by Western liberal politicians who mouth their hypocritical disapproval as another Marxist regime goes belly-up while the tyrant Mugabe’s party & followers commandeer Western aid for their own supporters & the white minority can only cower in terror as fellow African leaders back Mugabe in blaming it all on white Western nations wanting regime change.
Of course when intervention does finally happen it will be the taxpayers of these ‘evil white Western colonisers’ who foot the bill for ‘aid & reconstuction’. And so the cycle is repeated.
Not one Western soldier’s life should be put at risk to free these Zimbabweans from their ungrateful, white-hating, malcontent Marxist leaders. This should be the task of their fellow Africans.
Perhaps after this show of strength by our liberal leaders Africans would then stop blaming whites for all of its troubles & start looking inwards & find the root cause to solve their many problems.
Posted by dr dees brainwashing elixir at 9:35 PM on June 7
Concerning what AlmostMusicPhD wrote: “We already have knowledge that the money supply is drying up…”
That’s the one thing that isn’t true in his statement. Bush and the Fed have debased our dollar by turning the printing presses on. We are awash in dollars, and that is one reason inflation is soaring.
Posted by Lester at 10:32 PM on June 7
If Obama wins the presidency, you will see a drop in the Market so big, “they” will shut the market down for a few days to stop the panic.
Nobody, and I mean NOBODY will want to own American assets when a Kenyan is the American president. What a horrid thought.
Posted by LOGIC at 10:54 PM on June 7
As producing whites become a minority, ethnic factions and their leaders will wish to appropriate (commandeer) the residual wealth (as mentioned above). I believe Obama is already intimating that oil companies should just ‘roll back’ prices. That sort of governing will shutter major companies, and alert the rest to a fraying of the civilized infrastructure essential to found, operate and retain businesses. The problem truly is that the have-nots will surely make a grab for pie of the doers, ethics—and reality—be damned. The idea of income redistribution promulgated by today’s liberal democrats can be tenable when abundance prevails, and while the needy are relatively small in number. Yet, when abundance falters, and the unproductive become obstreperous and many, then the politics of redistribution becomes the seeds of demise.
Posted by ActionPotential at 12:23 AM on June 8
Black Zimbabweans don’t know how to produce bread of any kind, be it the edible sort, or the spending type. They will always be dependant on Whites for their own survivial, like all other African countries with a Black majority.
Posted by at 3:23 AM on June 8
With an annual inflation rate of 1.8 million percent as of May, prices are doubling approximately every 21 minutes (using the “72 Rule” approximation). If someone had written this as satire, Morris Dees and his grape Kool-Ade drinkers would be outdoing themselves in shrillness.
The problem for any country with a free-floating currency is what backs up that currency. The answer isn’t “nothing backs it up.” The currency is backed up by the value of all of the fixed property and all of the goods and services produced in that country. Since Zimbabwe has seen fit to expell its former agricultural sector, which used to be the main component of its GDP, while gangs deliberately vandalize the fixed property remaining, the GDP is obviously contracting. I suspect the Zanu-PF government is printing money as fast as possible as well, since it has supporters to pay off, which exaccerbates the problem. They probably spent the country’s last reserves of hard currency when they bought MiG-29 fighter jets from Russia some years back.
The poster above who said that Zimbabwe is headed for a moneyless society is exactly correct. In fact, they may already be there. With prices doubling every 21 minutes, think about what happens to a worker on a fixed income. Even if he is paid in cash, the end of an 8-hour workday will see his pay for that shift drop in value by 50%, every 21 minutes, for eight hours. It will have dropped in half about 22 times that day, to 0.00002% of its original value before he can take it out and spend it.
Sound bad? Think now about a merchant’s predicament, when he has to decide how much inventory to stock, then order it, and set prices. With prices doubling every 21 minutes, and the rate of inflation subject to drastic changes, nobody could do that without the process being pure guesswork. Agriculture in Zimbabwe is dead, but with a six-digit inflation rate, retail won’t survive, either.
Posted by Michael C. Scott at 9:56 AM on June 8
A little note about South Africa: White minority rule ended in Zimbabwe (then Rhodesia) 14 years earlier than it did in South Africa (1980 as opposed to 1994). As bad as it already is in South Africa, imagine what it will be like once African Empowerment government really begins to take its toll as it has in Mugabeland.
Posted by at 10:30 AM on June 8
While I agree that difficulties will multiply as we go into the over populated, polluted future, I think you are exaggerating about the stock market a bit like Chicken Little. Just watch the stock market correct (its not THAT bad) as less oil is required for transportation due to technological changes.
Just a small comment on this. I make my living as a trader. And I can tell you with some certainty that the stock market is going to CRASH this year. The severity of the crash will be similar to the dot com bust of years ago. If you have money in the stock market, you better get it out…..soon.
This has much more to do with the fact that it is time for a crash than anything else. Markets move in waves. Repeating patterns you see over and over again. The stock market has reached that point in a pattern where it is time for a massive move down. This coincides with alot of really dumb economic moves made by lots and lots of people and the large economic interests in our country positioning themselves to manipulate the stock market downward. This confluence of events is bad news for stock investors.
A good book on the wave phenomenon is Elliot Wave Principle, by Frost and Prechter. You can track what the big boys are doing in the futures market by reading the Commitment of Traders report released every friday. Pay close attention to what is going on with the DOW, the US dollar and oil.
How the next President handles economic policy will determine how bad this gets for most people. McCain = recession, lasting a couple of years. Not a big deal. We will recover during the latter half of his first term. Obama means a depression as he rubber stamps massive insane tax increases that will grind our economy to a halt. It will take significantly longer to recover from that. Much less time if he is impeached.
Posted by at 10:53 AM on June 8
“Agriculture in Zimbabwe is dead”
What about inflation hedges?
Posted by Madame Smythe at 12:11 PM on June 8
“Even if he is paid in cash, the end of an 8-hour workday will see his pay for that shift drop in value by 50%, every 21 minutes, for eight hours. It will have dropped in half about 22 times that day, to 0.00002% of its original value before he can take it out and spend it.”
Actually it is .00238 percent. The number .00002 is OK, but needs to be multiplied by 100 to make it into a percentage. Suppose you divide 1 by 5. The answer is 0.20. Is that 0.20%? No, it is 20%.
Posted by belle kerve at 12:39 PM on June 8
“The benchmark Zimbabwe Stock Exchange (ZSE) industrial index leapt to a new high above 900 billion points on Wednesday, from just over 1.2 billion points at the start of the year.”
_______________
I almost fell out of my chair laughing when I read this. Can you imagine ZIMBABWE having a stock exchange??? Who is running it, the “talented 10th” with average IQ’s of 80? I am truly speechless.
Posted by at 10:52 PM on June 6
Yes, they do have a stock exchange. Business is conducted across the top of an old orange crate inside of a cave with bats hanging from the ceiling.
Posted by at 2:18 PM on June 8
You reap what you sow. Or, in Zimbabwe’s case, what the White man is no longer allowed to sow.
Posted by Kevin at 3:48 PM on June 8
Another casualty of this inflation rate will have been banking. Just what sort of interest rate does a bank set for loans when inflation is 1.8 million percent annually, and subject to rapid change? How does a bank pay enough interest to depositors to convince them to keep their accounts open, when the value of the money in these accounts drops to nothing every day?
Posted by Michael C. Scott at 4:23 PM on June 8
Michael C. Scott wrote:
“With an annual inflation rate of 1.8 million percent as of May, prices are doubling approximately every 21 minutes (using the “72 Rule” approximation).”
It’s not quite that bad, actually. If 2^x = 18,000, where x is the number of times the prices double per year, then x = log18,000/log2 = 14.14. So the prices double *only* about every 26 days. Even so, this is still an extreme case of hyperinflation.
Posted by Ken P. at 3:05 AM on June 9
A peek into the future of America, unless by some strange happenstance, White people actually wake up.
Step 1: Kill your television
Posted by SG at 8:52 AM on June 9
Thanks. Something was nagging me about that figure, but I couldn’t quite put my finger on it, and then had some projects around the house to catch up on (the “HoneyDo List”.)
The figure of .00238% still means that putting in an eight-hour workday is simply not worthwhile unless one is being paid in specie, goods, or hard currency.
Another interesting thought is what this currency devaluation does to Zimbabwe’s ability to import things like refined petroleum products (they have some oil, I think, but do they have even one refinery? I doubt it), spare vehicle and machinery parts, and so-on.
It’ll be even worse after Mugabe dies, because his supporters will begin fighting each other over who gets to succeed him in the orchestration of this national pilliaging.
What we are seeing is the reverse of a classic Ponzi scheme. A Ponzi scam - like Social Security here in the US - only works so long as the number of people paying in can be continually expanded. In Zimbabwe, the only people paying in were whites, and most of those have been deliberately driven out of the country.
Even in the bad old days of the USSR, the Marxists didn’t deliberately drive their own productive elements out; they built walls to keep them in.
Posted by Michael C. Scott at 9:18 AM on June 9
Zimbabwe is the future of the world.
Posted by at 9:24 AM on June 9
The base of every economy is production.
Without production there can be no prosperity.
Add corruption to Zimbabwe’s idle economy and you have a formula for a currency crash.
Posted by (•▼•) Night Owl at 12:34 PM on June 9
It is amazing how everyone here at AR knows that putting Blacks in charge of anything will result in failure and disaster, yet the majority of the American populace is on the verge of electing a Black man as President of the USA!
God help us.
Posted by jayfresh at 3:17 PM on June 9
Of all of the “countries” in sub-Saharan Africa, Zimbabwe has the lowest IQ. The reason that the black government cannot deal with problems like inflation is because they have no word for abstract concepts in their native language and they lack the intellectual ability to use such concepts even should they be supplied.
Zimbabwe is one more example of the very close correlation between national IQ and national wealth. It is also a wonderful example of how an abundance of natural resources (Rhodesia was the breadbasket of Africa when ruled by whites) means nothing when the host population is of extremely low IQ.
Posted by at 6:09 PM on June 9