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Currency collapse experience

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tjisse Posted: Sat, Dec 17 2011 9:02 AM

 In Zimbabwe the currency collapsed slowly and with increasing speed but not the government infrastructure.  Prices later increased a number of times per day and cheques and credit cards were no longer accepted.  Quotations for anything had a validity of mere hours.  Many people were confused with the quantity of zeros and calculators were useless. The few cash registers used were registering first only the full millions, then billions and in the end trillions. A law was passed limiting the maximum cash withdrawal from the bank during any given day.  ATMs broke down and were not repaired, Shop shelves became bare and a delivery of any product was sold within hours. The government passed more laws this time on price controls on all basic essentials. Within days all those very same essentials were no longer available or product names were changed to circumvent the price controls.

Budgeting for anything became impossible. Hoarding became a criminal offence. The police would be informed who bartered volumes of singular commodities and raided homes and warehouses. The hoarders were charged and when found guilty sent to jail where there was likewise hunger.  Zimbabwean products had disappeared for lack of supplies and the companies went bankrupt with the workers left destitute.  Many people left for neighbouring countries often illegally seeking any employment. A network of courier started taking foreign cash back to their families. Poaching, life stock theft and theft of vegetables out of gardens increased.  Zimbabwe under the present government and party is and was a dictatorship. Some people spoke out publically about the situation and the government.  They were told to keep quiet.  Others who did not keep quiet had trumped up charges made against them. Neither pensions nor utilities kept up with inflation. Utilities were months behind the inflation that a month’s electricity would only amount to a loaf of unobtainable bread.

Foreign exchange was accepted widely though illegal and it was rumoured that the government itself was involved in the black market. Shortages of everything were normal from eggs to beef and from bread to flour.  Electricity and water failures became the norm.  State television proclaimed how Zimbabwe was the only country in the world where every citizen was a millionaire.  The libraries, cinemas, sport clubs and theatres continued to function haphazardly. Traffic fines were given and had to be paid on the spot. Barter took over in all essentials: sugar for chicken, chicken for medication, medication for fuel, fuel for rent. Insurances of any kind became worthless and futile. Crime increased and the police did not have sufficient fuel to investigate. People changed their gardens to vegetable patches and kept chickens. Some people in and with government connections used the system between barter, foreign exchange, primarily US Dollars and South African Rand and importing to amass fortunes. By the time a loaf of bread cost 500 hundred trillion Zimbabwe Dollars the government announced that as of that midnight the Zimbabwe Dollar would no longer be legal tender in Zimbabwe and it would henceforth be legal to use and possess foreign exchange. That midnight all bank accounts were zeroed with no recourse to claim for losses. In the morning businesses and private people alike found their bank balances to be Z$0.00

Barter continued and increasingly involved foreign exchange.  The Zimbabwean manufacturing and processing base has not recovered.  Small privately owned mines flourished during that time, and do so still, as these export.

Zimbabwe has a small population and a small economy.  The switch to Dollar and Rand was easy.  What would the US do, the Amero? Economic refugees to Canada & Mexico? States splitting away from the Union? What would you do?

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bbnet replied on Sat, Dec 17 2011 12:19 PM

Whiskey, tobacco, gunpowder, silver, and gold - in that order over time.

People will be in shock and looking for escape. Therefore whiskey first.

Once the shock has worn off, people will be ready to get busy. Therefore tobacco second.

Some of these busybodies won't respect others natural rights and might become a nuisance or even try to form or maintain a state. Therefore gunpowder third.

Once the new free market emerges from its infancy, local markets will be favoring silver.

As the new market matures, gold will once again gain favor for larger local and foriegn exchanges.

bzzzzzzzz - alarm rings and I wake up ... lol  ... thank heavens for the multiverse!

We are the soldiers for righteousness
And we are not sent here by the politicians you drink with - L. Dube, rip

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