Zimbabwe running out of US dollars; says it will print its own ‘bond notes’
Stashed in a drawer somewhere I have a 100 Trillion Zimbabwe Dollar bill. It’s a novelty just like the 100 Thousand and 100 Million Mark notes in there with it. They are great conversation pieces for people who don’t know about Germany’s nightmare inflation of the 1920’s and the Zimbabwe inflation that peaked in 2008-9 at as much as 89.7 Sextillion Percent.
The real lesson of these episodes is that governments and monetary systems must be completely separated. The Zimbabwe inflation was such an embarrassment to other money-printing states that at one point Germany’s foreign minister even ordered the German company that provided Zimbabwe with the fine banknote stock for its legalized counterfeiting to stop deliveries. The Los Angeles Times marked the event with a headline that betrays the news media’s confusion about all things economic: “Lack of bank note paper threatens Zimbabwe economy.”
Since the currency crack-up Zimbabwe has mainly relied on U.S. dollar in its commerce. But now its about to embark on its old ways again:
Zimbabwe announced Thursday it will introduce next month “bond notes” equivalent to the US dollar…
Zimbabwe has run out of US dollar notes in recent months and hopes to ease the cash crunch by printing its own “bond notes” that will be valued in denominations of $2, $5, $10 and $20.
“The bond notes will start to circulate by the end of October and will be at par with the US dollar,” Reserve Bank of Zimbabwe governor John Mangudya said in Harare.
Here’s a link to the story from Agence France-Presse.