- FrontPage Magazine - http://www.frontpagemag.com -

Zimbabwe Achieves Economic Growth by Destroying Ability of Government to Print Money

Posted By Daniel Greenfield On June 8, 2013 @ 3:21 pm In The Point | 2 Comments

So the good news is that once the economic collapse kicks in and the dollar becomes worthless preventing Hillary Chelsea Clinton Obama III, our 79th President from just printing more money, we too can have an actual economic recovery. Just like Zimbabwe.

Benson Mahenya makes as much as $10,000 a month as he drives around Harare in a white Mercedes- Benz dealing in the five currencies that Zimbabwe recognizes as legal tender. Mahenya, and traders like him, have sprung up since Finance Minister Tendai Biti abandoned the Zimbabwe dollar in 2009 following hyperinflation that the International Monetary Fund estimates hit 500 billion percent.

Under Biti, Zimbabwe stopped printing money and adopted the U.S. dollar, the euro, the South African rand, the Botswana pula and the British pound as legal currencies.

The currency reform has brought some semblance of stability to a country bearing the scars of Mugabe’s economic mismanagement. Zimbabwe’s central bank began printing money in 2006 to pay a debt to the IMF to stave off expulsion and continued the practice to meet expenses including infrastructure payments.

Banks sell currency to general customers at rates set at a daily level based on international markets while giving their corporate customers, such as retailers, a range within which they can trade. Customs rates are set weekly by the government for import duty purposes.

It’s an “incomparable” improvement from trading before Zimbabwe dollar was abolished, said Mills, whose company competes with OK Zimbabwe (OKZ) Ltd. to be the country’s biggest supermarket chain, said.

“Back then shelves were empty and retail was at a standstill.”Stores and taxi drivers convert the rand at 10-to-the- dollar for ease rather than using a market-related rate.

“Having a multi-currency economy with no Zimbabwe dollars is primarily good news for Zimbabwe because government can’t print its way out of a deficit,” said John Robertson, an independent economist, in an interview from Harare. “They can’t just print more if they need it, as was happening in 2008.”

The economy is expanding and most shortages have abated. Economic growth of 5 percent is being targeted this year, Biti told reporters in Harare on April 16. Biti and Tsvangirai have said a return to the Zimbabwe dollar isn’t likely soon.

So there’s hope for America yet. Our current dictator could learn some lessons from the plight of Zimbabwe, but I suppose destroying the economy is a better means of wealth redistribution, than actually repairing the economy. Until then we’ll go on printing imaginary money.


Article printed from FrontPage Magazine: http://www.frontpagemag.com

URL to article: http://www.frontpagemag.com/2013/dgreenfield/zimbabwe-achieves-economic-growth-by-destroying-ability-of-government-to-print-money/

Copyright © 2009 FrontPage Magazine. All rights reserved.