Economics Questions

Re: Zimbabwe dollar worth more than British sterling

wilderness — Mon, 08 Mar 2010 16:36:28 GMT

EinarFridgeirs:
http://www1.voanews.com/english/news/a-13-2009-04-12-voa9-69816747.html

EinarFridgeirs:
http://news.bbc.co.uk/2/hi/africa/7995882.stm

those articles are from last year

Re: Zimbabwe dollar worth more than British sterling

wilderness — Mon, 08 Mar 2010 14:28:52 GMT

Merlin:
wilderness:
Are you saying a currency that has been abandoned is worth more than a currency, the sterling, that is still in use? Or are you saying the Zimbabwe dollar is qualitatively backed by a foreign currency basket? Cause if the first question has an answer of "yes", then that's even worse than I thought.

Actually, an ‘abandoned’ currency is candidate to being the strongest currency around. ‘Abandoning’ only means hat the central bank has abandoned it, for no one can decide when the market is going to stop accepting something as money. But if the market still takes it and the central bank has stopped ‘managing’ it, than we have a perfect zero-growth currency in a competitive monetary environment. Indeed as good as it gets. Way to go Zimbabwe!

that's true. I was thinking "abandoned" in the sense that the people abandoned the currency and that due to legal tender laws it was no longer accepted in gov't transactions (taxes, etc....) either. But semantically the way you put it, it would raise its value.

Re: Zimbabwe dollar worth more than British sterling

Torsten — Mon, 08 Mar 2010 11:51:04 GMT

EinarFridgeirs:
All I know is that a variety of currencies, hard and soft are now circulating freely in Zimbabwe, and the government is not exercising it's legal tender laws.

US Dollar and South African Rand were in use already before that. But it was "illegal" to exchange them or to trade in them unless you had a license to do that. Of course we still did do that and I freely engaged even with state officials into this (as a shear necessity), but it was putting people at some risk.This caused even more problems for the "government", so they lifted that ban. Right now US Dollar and Rand are used the old Zim Dollar may still have some uses as monopoly money or collectors items.

The 'government' still tries to get a grip on gold diamonds both mineral commodities that can be mined in Zimbabwe and also did function as a means of exchange.

Zimbabwe is called a "dictatorship", but I don't think that is really true. While Mugabe has a grip on "governmental" institutions and via this on certain commodities in the country like the boss of a corporation, lot's of the country rather works like an anarchy with people taking the law into their own hands. You basically can do what you want, unless you'll piss someone of that is ready to use force against you. Sometimes you may find a police man that is asking you for a bribe or food, but usually they leave you alone, especially, if you are white. The common people are pretty poor, but there is less crime then in South Africa, which is rife with crimes like murder, theft, hijackings, rape and the like.

Re: Zimbabwe dollar worth more than British sterling

Hard Rain — Mon, 08 Mar 2010 11:22:23 GMT

Merlin:

wilderness:
Are you saying a currency that has been abandoned is worth more than a currency, the sterling, that is still in use? Or are you saying the Zimbabwe dollar is qualitatively backed by a foreign currency basket? Cause if the first question has an answer of "yes", then that's even worse than I thought.

Actually, an ‘abandoned’ currency is candidate to being the strongest currency around. ‘Abandoning’ only means hat the central bank has abandoned it, for no one can decide when the market is going to stop accepting something as money. But if the market still takes it and the central bank has stopped ‘managing’ it, than we have a perfect zero-growth currency in a competitive monetary environment. Indeed as good as it gets. Way to go Zimbabwe!

Indeed, Merlin. The Somali Shilling no longer has a government or a central bank to "manage" it and it is still used as a medium of exchange. It's virtually backed only by the costs of producing it with paper and ink. Anarchic Somalia achieving a stable monetary base... It brings the statists to shame

Re: Zimbabwe dollar worth more than British sterling

Merlin — Mon, 08 Mar 2010 08:35:27 GMT

wilderness:
Are you saying a currency that has been abandoned is worth more than a currency, the sterling, that is still in use? Or are you saying the Zimbabwe dollar is qualitatively backed by a foreign currency basket? Cause if the first question has an answer of "yes", then that's even worse than I thought.

Actually, an ‘abandoned’ currency is candidate to being the strongest currency around. ‘Abandoning’ only means hat the central bank has abandoned it, for no one can decide when the market is going to stop accepting something as money. But if the market still takes it and the central bank has stopped ‘managing’ it, than we have a perfect zero-growth currency in a competitive monetary environment. Indeed as good as it gets. Way to go Zimbabwe!

Re: Zimbabwe dollar worth more than British sterling

EinarFridgeirs — Mon, 08 Mar 2010 04:07:00 GMT

wilderness:
Are you saying a currency that has been abandoned is worth more than a currency, the sterling, that is still in use? Or are you saying the Zimbabwe dollar is qualitatively backed by a foreign currency basket? Cause if the first question has an answer of "yes", then that's even worse than I thought. Obviously the sterling is still being exchanged but that seems like one heck of an odd currency exchange on the global market (Zimbabwe currency not in use yet still traded at a better price than the sterling on that given day).

All I know is that a variety of currencies, hard and soft are now circulating freely in Zimbabwe, and the government is not exercising it's legal tender laws.

http://www1.voanews.com/english/news/a-13-2009-04-12-voa9-69816747.html

http://news.bbc.co.uk/2/hi/africa/7995882.stm

Re: Zimbabwe dollar worth more than British sterling

wilderness — Mon, 08 Mar 2010 02:36:13 GMT

EinarFridgeirs:
Zimbabwe isn't just printing less - the Z$ has been effectively abandoned as a unit of currency.

Are you saying a currency that has been abandoned is worth more than a currency, the sterling, that is still in use? Or are you saying the Zimbabwe dollar is qualitatively backed by a foreign currency basket? Cause if the first question has an answer of "yes", then that's even worse than I thought. Obviously the sterling is still being exchanged but that seems like one heck of an odd currency exchange on the global market (Zimbabwe currency not in use yet still traded at a better price than the sterling on that given day).

Re: Zimbabwe dollar worth more than British sterling

EinarFridgeirs — Mon, 08 Mar 2010 02:19:14 GMT

Merlin:

Is Zimbabwe trying to ‘stabilize’ (print less)? If so, there is little particularly sensational here. But if they are continuing to print full throttle, than this is the beginning of the end for the EU.

Zimbabwe isn't just printing less - the Z$ has been effectively abandoned as a unit of currency. It's not the official legal tender note of Zimbabwe and hasn't been since April 2009, when the ZB Fed authorized the use of foreign currencies in legal transactions. It may seem kind of strange, but ZB today has probably the banking system that is closest to what Rothbard, Hayek et. al would approve of, which is to be expected since much of ZB's economy is now firmly a black market/unregulated economy.

Re: Zimbabwe dollar worth more than British sterling

Merlin — Thu, 04 Mar 2010 16:23:44 GMT

wilderness:

Anybody else see this:

"It says something about your currency when foreign exchange dealers are even prepared to swap it for the Zimbabwean dollar. Yet this was the pitiful fate of sterling yesterday as it suffered its biggest rout on the currency markets for more than a year.

Apart from the pastings received at the hands of the US dollar and the euro, sterling also fell by more than 1.7 per cent against Zimbabwe’s much-mocked paper, completing a decline of more than 7 per cent since the end of January....

One senior banker said yesterday his big worry was that if a bailout of Greece was agreed, all the hedge funds that have been shorting the euro could turn their attention to sterling."

--

Zimbabwe dollar worth more than British sterling. gaaaf!

Is Zimbabwe trying to ‘stabilize’ (print less)? If so, there is little particularly sensational here. But if they are continuing to print full throttle, than this is the beginning of the end for the EU.

Zimbabwe dollar worth more than British sterling

wilderness — Thu, 04 Mar 2010 15:00:56 GMT

Anybody else see this:

"It says something about your currency when foreign exchange dealers are even prepared to swap it for the Zimbabwean dollar. Yet this was the pitiful fate of sterling yesterday as it suffered its biggest rout on the currency markets for more than a year.

Apart from the pastings received at the hands of the US dollar and the euro, sterling also fell by more than 1.7 per cent against Zimbabwe’s much-mocked paper, completing a decline of more than 7 per cent since the end of January....

One senior banker said yesterday his big worry was that if a bailout of Greece was agreed, all the hedge funds that have been shorting the euro could turn their attention to sterling."

Zimbabwe dollar worth more than British sterling. gaaaf!