Zimbabwe to introduce gold coins as currency

Cut and paste from facebook

Prof Mutambara explains how ZANUPF and its friends are looting public funds using the Gold Coin ponzi scheme.
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The Gold Coin: A Self-enrichment Scheme for the Elites
By Professor AGO Mutambara
Here is how it works.
You take your USD to the parallel market and get RTGS at, say, 1USD to 950.
You go and buy the gold coins in RTGS at 1 USD to 441 (the gold coin exchange rate) and immediately make a profit of more than 100%.
That is the gold coin arbitrage opportunity.
Is this not common sense?
It gets worse!
For the elites who are connected and have access, you don’t have to involve your hard-earned USD in the first part of the transaction.
You take your RTGS to the RBZ and buy the USD at the auction rate, say 320.
You take this ill-gotten USD to the parallel market and buy RTGS at 950.
That's a profit of 200%.
Then you go and buy your gold coins at 100% profit, as explained before.
So the potential benefit to the elites (the connected) is as follows:
Start with 10 000 USD it becomes 30 0000 USD then it becomes 60 000 USD.
From 10k USD to 60k USD.
WITH NO PRODUCTION.
500% PROFIT.
This is quite a self-enrichment scheme for the elites.
Just to clarify:
To get started, the elite person takes their 10k USD to the parallel market and buys RTGS at 950.
Then they go to the RBZ and buy USD at 320 (auction rate).
Then they go back to the parallel market and buy RTGS at 950.
Then they go for the gold coins and pay in RTGS.
10k USD to 60k USD.
It is shameful.
 
You just can't go wrong owning gold, everything is bullish now.
Holding USD is a great idea as long as it's still backed by gold.
It's currently backed at a $2330 conversion in USD per ounce.
It's Brandons gold standard haha.
 
sammysilver said:
https://www.bbc.com/news/world-africa-68736155

From today’s BBC.
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From the article:

It is the latest attempt to stabilise an economy that has lurched from crisis to crisis for the past 25 years.
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They must have a different definition of stability to mine. Fiat based systems (in advanced economies) are stable if we define stability as an absence of variability. In the case of modern economies there is steady long-term inflationary pressure. A number of papers that I've read on gold standards show that they are not stable, with periods of inflation followed by periods of disinflation making it difficult to plan future business investment decisions. Of course that suggests therefore that gold standards or are not a panacea for a nation's economic woes.
 
JohnnyBravo300 said:
That's why you also need free markets. Government managed gold standards always end in disaster because they eventually become manipulated.
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Can you elaborate on your model of a gold standard operating in a free market without governments maintaining a monopoly on the issuance of currency?
 
Some of America's history except when banks or governments issued paper replacements.

Our money wasn't always government minted here until they made the laws requiring it but it worked fine too.
The money was already around long before and already used in trade.

Americans basically piggybacked off what the Spanish had going and slowly took the monopoly here.
The government monopoly isn't the problem of course.
 
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I recently read that Zimbabwe is set to introduce gold coins as a form of currency. This seems like a really interesting move, especially considering the country's long struggle with hyperinflation and currency instability. By using gold coins, Zimbabwe aims to provide a more stable store of value for its citizens and investors.

It's also a way to build trust in the local economy, since gold has always been seen as a reliable hedge against inflation. However, it’ll be interesting to see how accessible these coins will be for the general public and whether this can truly stabilize the economy in the long run.

What are your thoughts? Could this be a model for other countries facing currency challenges?
 
jackson_99 said:
What are your thoughts? Could this be a model for other countries facing currency challenges?
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Governance is the issue when it comes to currency collapses. A commodity based currency just becomes more and more unwieldy if the economy can't generate revenue through exports. If the US couldn't maintain a gold standard countries like Zimbabwe have got no chance. It could be a store of wealth for those that have wealth mind you (also see El Salvador etc with BTC and it's much easier to obtain) but it would struggle to operate as a currency because it would have be exchanged at a floating rate.
 
Been a while since I posted an update to this thread. Zimbabwe did roll out a new "ZiG" that is supposedly backed by a reserve of gold among other things (USD, etc.). However, the new ZiG is not redeemable/convertible to gold and the locals don't trust the Reserve Bank, so it's having a rough launch and looks likely to follow the same doom loop as previous Zimbabwean national currencies.
 
I have long thought the devaluation was inevitable. Authorities must confront the fundamental causes, which are rooted in a loss of faith in the ability of government to manage spending. In particular, its habit of printing money, overspending on its budgets and failing to expand the economy.
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https://theconversation.com/zimbabw...in-trouble-because-of-government-overspending

Overspending is not the fundamental cause, that and the other issues the author raises are more symptoms of a piss poor socio-economic and political framework.

Slashing the budget, reducing money "printing" and putting in place strategies that create growth which can then be taxed to enhance tax revenue won't help. In fact with the exception of promoting strategies that enhance growth (forget the revenue side of things) it will only make things worse. They're old solutions looking for a problem in the wrong places.

Where to start? Governance itself, but that's not gunna change in a hurry. How do you change Africa itself? :eek:

Zimbabwe's problems: https://prosperity.com/globe/zimbabwe
 
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