|
Simple Economics Continue to Baffle Mugabe
President Robert Mugabe has established new courts to counter Zimbabweâs critical banknotes shortage. The Zimbabwe leader blames the four-month-old shortage on the thriving black foreign currency market. Why the hell would there be any kind of foriegn market for currency that is totally worthless even in Zimbabwe where the notes are legal tender?Michael Santu of the Reserve Bank of Zimbabwe told the Sunday Mail newspaper the courts would co-operate with neighbouring countries. They will eliminate the Zimbabwe dollarâs illegal externalisation, he said. A donkey cart couldnât externalize enough Zimbawe cash to buy a Snickers bar. Unless the neighboring countries are short of toilet paper, people other than natives of Zimbabwe have no reasonable use for paper with Robert Mugabeâs printed portrait. Mr Santu told the newspaper: "There is still a lot of money out of the country, especially in Mozambique and Zambia." Maybe Zimbabweâs currency is printed on rolling papers. Zimbabweans use the notes to buy foreign currency abroad which they then re-sell onto the parallel market at home, he The courts are expected to start operating soon. Critics of the Mugabe-led government say banknote shortages are more to do with Zimbabweâs soaring inflation rate, currently standing at more than 426%, than its black currency market. Since the dawn of time markets have only existed for items that are of value to other people. Nobody buys inflationary currency. The Zimbabwe Government introduced a new currency - bearer cheques - this week, but economists warned they are easily forged. "There is a serious danger because they can easily be manufactured using modern machinery such as scanners and photocopiers," economist John Robertson told Zimbabweâs Standard newspaper. Encouraging counterfieting may be the only way that the government can keep up with the currency shortage casued by their stupid policies. My favorite economist, Walter Williams, has written several columns demonstraing that assured personal property rights are more important to the economic health of a nation than a constitution establishing liberal democratic rights. Posted by: Super Hose 2003-09-28 |
| http://www.rantburg.com/poparticle.php?ID=19199 |