Zimbabwe, Hyper-Inflation Are We Next ?

Yes, it's real money. Or at least it was until just recently when the government of Zimbabwe declared its own paper money worthless

This recently printed One Hundred Trillion Dollar Zimbabwe note (above)use to buy only 300 America dollars. Now it's totally worthless. The 100 Billion Dollar Zimbabwe note (below) was said to have bought just three eggs.

Could this happen in America? Is this the destiny of the American dollar?Zimbabwe is a place where our poor American dollar is still King Dollar. Do your homework and read this article before you decide.


Had Americans sold their S&P index fund holdings in 1999 and just purchased gold bullion to bury in their back yard they would have tripled their money. No question the new 21st century has seen the decline of the American dollar and rise of emerging markets. Certain trends have been evolving for years. For this reason I posted a link to a free educational webcast hosted by U.S. Global Investors CEO Frank Holmes and world famous Dr. Marc Faber.

The Republic of Zimbabwe formerly known as Southern Rhodesia, and the Republic of Rhodesia like most African countries has a history that one must understand prior to making the usual economic shock jock comparisons to America. The shock jocks want to use "shock and awe" tactics to garner listeners while the gold bugs want to talk up the value of their gold and commodities investments.

Now I know predictions of total doom for America win 90 out of 100 times in the blogosphere. If you want to increase traffic talk smack and doom. One word of green shoots is political readership suicide. It's understandable. People are anger, many unemployed. The economies in the dumpster and real American unemployment rates are around 16.5%. You, can bet that I have no rosy story to tell. As former President Bill Clinton use to say, "I feel your pain".



Yes, the current financial crisis and our declining American dollar is a symptom of decades of mounting debt and economic decay. It's a major nightmare. And it's debatable if we're seeing the light of daylight at the end of a tunnel, or if that's the head light of a 28,000 pound, on-coming (debt burden) locomotive -roaring towards us.

I'm posting these stereotypical shock jock video's for four reasons: 1) Maybe we need "shock and Awe" to wake us up. 2) They contain some excellent education information. 3) In 1975 to complete my minor in Economics, I took a course in African Economics, so I've an understanding of histories impact and desire to stay abreast of African issues. 4) They show how Economist Greenspan and Bernacke had no understanding of how holding interest rates so low was like pouring gasoline on a real-estate forest fire bubble. Given their advance education and age, even I was shocked by boomer brother Ben's lack of real-estate knowledge. See my post on California Day Dreaming Homes.

But please, for your own education learn more about Africa and Zimbabwe's history. You'll gain an understanding of what led to its current social and financial debacle. These video's provide a glimps of the Zimabwe nightmare.

I'll give my followers more insight than those whose only goal is to pump up the value of their gold bullion bars. You may disagree with me. But in the process we may both learn something. And that's the value-added of this blog.



How bad is Hyper-inflation in Zimbabwe? Well, the words hyper and inflation were two separate words now made into one word in Zimbabwe's vocabulary. Hyperinflation in 2007 and 2008 made Zimbabwe's currency virtually worthless despite the introduction of bigger and bigger notes, including a 5, 10, and 100 trillion dollar bill !

Yes, I said Zimbabwe issued a 100 trillion dollar bill (top photo)

Zimbabwe recently announced the official suspension of the Zimbabwe dollar for at least one year. Can you image having earned a 100 trillion dollar bill that your government will no longer honor?



Extra Credit Education for advanced learners below:

Yes, excessive paper money creation combined with a our transition to a debtor nation is very problematic. Now the usual gold bugs and financial fear mongers are talking up their gold investments by comparing the USA dollar decline to the now worthless Zimbabwe dollar. We do need to learn from Zimbabwe's financial chaos. But their simplistic comparisons fail to discuss how the once wealthy nation (by Africa standards) with the highest literacy rate has been mismanaged and micro managed for decades by a dictator. Robert Mugabe ranks number one on the charts of The World's Worst Dictator.

The valuation of any currency has numerous variables which impact the currency’s value and exchange rate . The value of a currency is affected by exports, imports, foreign currency reserves, balance of payment position , economic activity and many other factors.

You don't need a Ph.D. in Economics to know if Zimbabwe has nothing to sell to the world and imports everything, that's a problem. If no wants to invest in Zimbabwe or put money in their banks, thats another problem. Yes, America has problems. But we still have things the world wants to buy and considered among the worlds stable governments. Although demand for the dollar is falling it's still the worlds most used currency. During the peak of the World Financial Crisis money from around the world sought safety by buying US Treasuries. The gold bugs perdiction of gold $2,000 was proven to be a folly as the fear of deflation cause it to lose value as fast as stocks. You can bet no one wanted to invest in Zimbabwe during the crisis, nor does anyone wish to keep money in a Zimbabwe bank.

Zimbabwe has had decades of social and economic problems. The recent confiscation of farmlands from white Zimbabwe citizens led to a sharp decline in agricultural exports, traditionally the country's leading export producing sector. No sane western country would want to invest in Zimbabwe with Robert Mugabe in charge. As a result, Zimbabwe is experiencing a severe hard-currency shortage, which has led to hyperinflation and chronic shortages in imported fuel and consumer goods. In 2002, Zimbabwe was suspended from the Commonwealth of Nations on charges of human rights abuses during the land redistribution and of election tampering.

The general health of the civilian population also began to significantly flounder and by 1997 - 25% of the population of Zimbabwe had been infected by HIV, the AIDS virus. Life expectancy at birth for males in Zimbabwe has dramatically declined since 1990 from 60 to 37, among the lowest in the world. Life expectancy for females is even lower at 34 years. All this under the leadership of Mugabe.

Warning these videos are not for those who want to walk in the park and smell the roses. Finding Gold for daily Bread. Here is what's left of a once propsperous country. This is how a dictator gets votes to proclaim he runs a democracy. Democratic Apocalypse - Zimbabwe

Namibia-based tribunal of the Southern African Development Community ruled in October 2008 that Zimbabwe’s land reform program was racist, discriminatory and illegal. This Robert Mugabe dictator policy dates back to 1999. And like most so called "Freedom Fighters" of the past e.g. Castro brothers (Cuba) and Idi Amin (Uganda)they use their nations initial admiration to leverage themselves into a lifetime Dictatorship in President's clothing.