If you were having coffee with me I would tell you after a week of a rainy cold spell, the sun came out to play today 🔆 I can’t remember a winter it was this cold before, we are like children of summer who have never known a day of winter. They say it’s the effects of global warming, which I find rather confusing because shouldn’t it be warmer? Anyway, that’s the enigma of climate change for you. Still the sun’s out.
Ray – A drop of golden sun.
You will never guess what new innovation our Reserve Bank has decided to come up with, to solve the issue of our currency woes. Before I get into that, I am sure you are aware that my country Zimbabwe, has been experiencing some economic challenges so to speak, but of course, so is everyone else in the world, its tough times out there. Except for us, it’s as if someone pressed the accelerator paddle to rock bottom.
At least we have the dubious honour of being number one on Steve Hanke’s inflation ranking right? *Officially our inflation is recorded as being 191.6%
From the studies done by our relevant authorities, it came to light that part of the problem we face, stems from people not having confidence in the local currency unit, the Zimbabwean Dollar. Can’t blame anyone for that, especially after the currency shenanigans we have had in the past few years or how the Zim Dollar once got ditched in favour of the greenback. It feels like we are fast heading back to that situation despite the best efforts of the government to resurrect the local currency.
Consequently, people prefer to liquidate any Zim Dollar balance they have in favour of United States Dollars. Since the value of things in USD terms is fairly constant, it is being used to store value, which puts pressure on the local unit and further drives down its value on the parallel market. Thusly the Reserve Bank in its great economic foresight has decided to introduce Gold Coins.
The Gold Coins to be introduced mid-month of July are set to be used as an instrument for storing value. According to the Reserve Bank Governor, ”Once minted they will be distributed by Fidelity Printers and Refiners, local banks and international banking partners that we will announce in due course. These gold coins will be used both locally and internationally because we have engaged with international banking partners.”
Gold is gold, right? So this should be an interesting course of action. According to the Gold Bars Worldwide website, countries with gold coins include South Africa with its Krugerrand gold coins, Australia with Australian Kangaroo, the United States has the American Eagle, Canada has the Maple Leaf, Austria has the Vienna Philharmonic.
Its almost similar to the gold standard, where a country’s currency or paper money has a value directly linked to gold. For now, Zimbabwe is not yet adopting a gold standard.
No details have been issued on how exactly all this will work except that one will be able to purchase these Gold Coins in either local currency or foreign currency. A bearer certificate will be issued when one buys the coins and one can trade them or use them as collateral.
If you were having coffee with me, it is still unclear if you will actually be able to take the gold coins with you or they most likely the bank will safe keep them for you in a safety deposit box and you only get a fancy bearer certificate that you own gold. Maybe it’s a sign of how I don’t have confidence in the system that I bet they could just lie and give you a bearer certificate not worth the paper it’s printed on claiming to be representing gold you will never ever see….
Gold is the new gold, unless its fool’s gold… I hear Uganda announced that surveys show that their country has 31 million metric tons of gold waiting to be mined which could fetch the country more than $12.8 trillion. A Chinese-run firm, Wagagai, expects to mine and start refining at least 5,000 kilogrammes of gold a day in Busia by the close of this year. Uganda looking good about now.
Not all that glitters is gold… what’s been going on in your neck of the woods?
Update: Communication from Reserve Bank On introduction of gold coins
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