A 500mln bearer cheque (aka ‘bank note’) added to Gono’s portfolio of success
(Click on the image to enlarge). A new so-called bank note - which is actually just another of Gideon Gono’s funny-money bearer-cheques (printed with expiry dates) - has hit the streets. It has not yet been added to our display of Gideon Gono’s portfolio of past and current cheques, but I’m sure our readers will understand that it is almost as hard to keep up with him and his printing as it is to keep up with inflation!
The photograph certainly makes one think, doesn’t it?!
It’s hard to believe that the smallest note in this pile - $5 - was issued on 1st August 2006 (you can just make out the date if you enlarge the image).
1st August 2006 is a very important date: this marked the beginning of Gono’s Operation Sunrise where he knocked three zeros off our currency.
Operation Sunrise was accompanied by a big Reserve Bank Of Zimbabwe advertising campaign as well, heralding the new future of three less zeros which was supposedly about restoring value. Here is one advert to remind you (click on it to enlarge and you can see the ‘restore value’ slogan in the top right).
There are three things to point out here: first, the $5 note in our picture had actually been worth $5,000 in July 2006. Value was not restored to the currency, all that happened was three zeros were dropped. The advertising campaign set out to con the public that the real value of our money had somehow returned miraculously overnight; that Gideon Gono was a successful Reserve Bank Governor who had helped to heal the economy.
So the REAL figure associated with the new $500,000,000 cheque issued today is in fact $500,000,000,000.
Your eyes are not deceiving you - eleven zeros - $500,000,000,000.
The second thing to note is the price of bread. A new $500,000,000 cheque will buy two loaves of bread; but according to the government’s own campaign, one loaf cost a mere $85 in August 2006.
Translate that to the proper terms with all the zeros in place: a loaf that cost $85,000 in 2006, now costs $250,000,000,000.
The third thing to note is that THIS - the mis-management of the economy - is the biggest reason why Zimbabweans want Mugabe and Zanu PF to go. Wouldn’t you vote your government out if they did this to YOUR economy?
This via Reuters
Zimbabwe’s central bank introduced 500 million Zimbabwe dollar notes worth just $2 on Thursday in the latest sign of spiralling hyperinflation, only a week after issuing the 250 million bill.
The new highest denomination note would buy about two loaves of bread.
The central bank also introduced special agricultural cheques in 5 billion, 25 billion and 50 billion Zimbabwe dollar denominations to facilitate payments to farmers during the current selling season.
Farmers normally have to carry huge stacks of bank notes after selling their produce to state agencies, while consumers often carry large piles of cash with them for simple daily transactions.
May 15th, 2008 19:20
At the time we left our farm in 2001 my wife and I drew a monthly ’salary’ - living money - from the business of just Z$6000 between us. That is Z$6 of the new imporved money as at 1st Aug 2006!
And I don’t think that would be enough for a crumb of bread now, let alone a slice.
But don’t worry - Mbeki worships Mugabe for these rampant successes. In the same way that Zim money has no meaning any more, I think the English language no longer has words that adequately describe these two cretins.
May 15th, 2008 19:37
New bank notes in a bid to tackle cash shortages = Zeros Ventured, Zero gained.
Therefore: Nothing ventured, nothing gained.
Gideon Gono quote: “The country is standing on the edge of a cliff which threatens to irreversibly take us downhill if we do not boldly move forward with speed to address most of our shortcomings.” Yes, well, er, how about:
Old habits die hard.
May 15th, 2008 20:09
My first job netted me $83.62c a month. That’s $0.08362 in today’s money or just over 8 cents. If a loaf of bread is 800g then I could buy 2,67 x 10^-7 grammes of bread i.e.
0,000 000 27g. Much less than one crumb.
Why do people choose to use this currency in place of, say, batteries or matches or cigarettes. Just about anything can be used as a unit of exchange as long as it is numerous and uniform and is perceived to be of value to someone somewhere. That’s why prison economies (and some refugee camps in the Congo apparently) work with cigarettes as a unit of exchange, while much of West Africa and other parts of the world functioned fine on cowrie shells for centuries (which had to be fetched from the Indian Ocean and had value as jewellery).
Seriously, someone could define a cut-off date (say, the expiry date of the current notes) as the date beyond which all payments move to some new medium of exchange. It’s a consensus thing, rather like saying who the government is. Perhaps even an on-line medium based on the systems people use to send telephone airtime and fuel home, with some physical token as equivalent. That would create a virtual Zimbabwean economy well beyond the borders of the country, and linked to where the wealth generation now is.
May 15th, 2008 20:28
The banknotes must cost more to print than their value. i don’t understand the logic. My impression is that the economy is running on barter now plus the input of Forex from the diaspora.
May 15th, 2008 21:15
Off-topic
Check out this link. If you have a slow connection, then these are the four steps:
Type in Zimbabwe
Click somewhere on the applet to “get it to focus”
Squint and look top right and select “past year”
Squint and look bottom right and chose “time”
Wait a little - it is doing a big search
And you will see the press coverage for Zimbabwe as a bar chart. Mmmm, which is going up faster - the currency or the press coverage? Well maybe the currency wins but the press coverage ain’t bad.
May 15th, 2008 21:16
And you want the link!
May 15th, 2008 22:04
CONGRATULATIONS!!!
Lets give praise to Gono for printing more money for use during the run-off. Brilliant economics. Mugabe should be happy with all your efforts. Inflation should be now 385 000%.
May 15th, 2008 22:38
Looking at those two photos, I wondered… perhaps we have dropped through a wormhole and are living in a parallel world?
May 15th, 2008 22:39
Im trying to go on the mdc website but having problems, is anyone experiencing the same?
May 15th, 2008 23:51
Yep, can’t get on the MDC site either. Just says “web server ok”.
May 15th, 2008 23:54
http://www.mdczimbabwe.org/
is the one to use - it works fine here.
Someone should buy up mdczimbabwe.com and mdczw.org as these are seemingl available, and point them to the MDC site so people don’t get lost - I can never remember which one it is!
May 16th, 2008 05:52
Hyper-inflation in Germany a century ago hit over one trillion percent; wheelbarrows were necessary to carry enough money to buy a loaf of bread. The economic collapse eventually elected Adolph Hitler (right-wing socialism) to office. At least twenty million died.
Stalin and Mao (left-wing socialism) did not inherit inflation, but they killed at least ninety-five million people between them, mostly by starvation after government take-over of private farms.
Is ‘Economic History’ taught in Zimbabwe? Does anyone in the Zimbabwe government have a degree in neo-classical Economics, instead of Marxist economics?
May 16th, 2008 09:56
Somebody please explain how they can afford to print these new notes?
May 16th, 2008 10:24
@Faraway
Presumably the same firm Giesecke Devrient.
Perhaps time for friendly phone calls to German Ambassadors asking if the internet gossip is true - do they supply the notes to Mugabe? And if so, how are they being paid?
Economists/financiers out there - is it the case that if the notes dried up, the government is likely to topple? Gono is already raiding POSB - they will find a few more innovative moves, people will learn to barter for essentials, and it will be over??
And what is the MDC plan re the currency - presumably they will have to invent a new one? Do you remember the joke when inflation started (in the 10% days!). 10 ‘chidzeros’ made one ‘bob’ and ten ‘bob’ made one banana. This has been going on a long time - twenty years! I remember the times when we speculated (as if we were very clever indeed) that the dark green 20 dollar note would soon be less than one pound.
For reference, at the election the rate was 90m to the pound, 2 days after the election the dollar strengthened to 60m to pound. Then it started to drop. It rallied briefly when it was floated. Yesterday it was at 480m to the pound. Well - 1/8 of the confidence of 2 months ago. Wow, we like to set records.
Economists/financiers - your comments?
And check out the link to internet coverage. The world has not forgotten.
May 16th, 2008 10:42
They can’t. More to the point: We, as a country, can’t afford this. This hasn’t bothered them though…. Back near the beginning of all this, they decided to pay the compensation the war veterans demanded by increasing taxes and printing money. So, after neglecting the people that fought for our Independence (and put them in power as a convenient side-effect) for 20 years, they compensated them by 1)taking money from everyone else and 2) making more. The first is oppressive, the second is ridiculous. Whilst printing money is, for them, like taking it out of thin air, the effects of this tactic, which they’ve used repetitively, was to kickstart the spiral of hyperinflation that we experience today.
May 16th, 2008 12:42
election date gazetteed
May 16th, 2008 14:13
So would this company, presumably their division Giesecke & Devrient Southern Africa (Pty.) Ltd. in Johannesburg, be the one that supplies the RBZ with all these copious notes. Are they mad? Is there some union who could help put a stop to this nonsense? Isn’t it the more notes, the quicker the downfall?
May 16th, 2008 14:16
For your information, someone on ebay is offering a $250million note for £40. Maybe someone can work out the actual value of £40 in $Z. How can scum like that sleep at night profiteering from the suffering of Zimbabwe people.
http://cgi.ebay.co.uk/NEW-ZIMBABWE-250MILLION-NOTE-BEARERS-CHEQUE-FREEPOST_W0QQitemZ130220647244QQihZ003QQcategoryZ3422QQssPageNameZWDVWQQrdZ1QQcmdZViewItem
May 16th, 2008 17:43
As a collector of notes I say more the merrier. But to have to live with the cansequences of the inflation must be horrendous. Yugoslavia suffered similar problems in the 93-94 period., regularly cutting zero’s off their notes.
Re cost of printing. It costs the same to print a Z$5 or Z$500M note.
May 16th, 2008 22:25
If they need to earn some hard currency, they should just start printing the $1billion note and put it on ebay for Americans to buy.
Seriously, I would like to get a couple of the $500million notes as a collectable. Anyone know where I can get it?