It’s always a reasonable advice to expect the unexpected.
Zimbabwe, whom has been the latest country to endure a stunning gut-wrenching episode of hyperinflation as shown below (previously posted here)....
….has reportedly been considering…hold your breath…a Dollar backed by GOLD!
Reports the New Zimbabwe (hat tip Bob Wenzel)
THE central bank says the country must consider adopting a gold-backed Zimbabwean dollar warning that the US greenback’s days as the world’s reserve currency are numbered.
Government ditched the Zimbabwe dollar in 2009 after it had been rendered worthless by record inflation levels and adopted multiple foreign currencies with the US dollar, the South African Rand and the Botswana being the most widely used.
Finance minister Tendai Biti says the country needs at least six months import cover and a sustainable track-record of economic growth, inflation stability and above 60 percent capacity utilisation in industry before the Zim dollar can be brought back into circulation.
However central bank chief, Dr Gideon Gono said the country should consider adopting a gold-backed currency.
“There is a need for us to begin thinking seriously and urgently about introducing a Gold-backed Zimbabwe currency which will not only stable but internationally acceptable,” he said in an interview with state media.
“We need to re-think our gold-mining strategy, our gold-liberalisation and marketing strategies as a country. The world needs to and will most certainly move to a gold standard and Zimbabwe must lead the way.”
Gono said the inflationary effects of United States’ deficit financing of its budget was likely to impact other countries to leading to a resistance of the green back as a base currency.
Has this tergiversation talk of Dr. Gono, the man responsible for Zimbabwe’s hyperinflation, imply of a genuine conversion? I doubt so.
Yet, as earlier pointed out in my previous post where Steve Forbes has predicted the return of the Gold Standard in 5 years, it usually takes a calamitous event for politicians to embrace what is seen as politically repulsive.
Could Dr. Gono be the trendsetter?
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