A Glimpse Into Our Future?
May 2, 2006
9:35 a.m., MT

Those with spare cash put it not in banks, which pay a paltry 4 percent to 10 percent annual interest on savings, but in gilt-edged investments like bags of cornmeal and sugar, guaranteed not to lose their value.

"There's a surrealism here that's hard to get across to people," said Mike Davies, the chairman of a civic-watchdog group called the Combined Harare Residents Association. "If you need something and have cash, you buy it. If you have cash you spend it today, because tomorrow it's going to be worth 5 percent less."

It won't happen exactly the same way here, o'course, but it seems inevitable. I already know of some individuals who are following the practice described above—if you have cash you spend it today. There's much more of interest in the article, Zimbabwe: Inflation Capital, from today's San Francisco Chronicle.

If you prefer the delicate twang of irony accompanying your news, check out what the Happy Curmudgeon discovered today. Barf bag not optional for sane readers.

Sunni

Comments: 10 people have contributed to the conversation

On Tuesday, May 2nd, at approximately 11:25 a.m. Mountain time, Michael said:

Commodity based currency seems a much better idea to me than the current fiat money system we currently have. Beef Bills, Soda Cents, Munchies Moola, Meal Money...these are real money and investments. The poor people in Rhodesia...errr...Zimbabwe are experiencing what all of us in the region knew was going to happen. Look for the same thing to happen in South Africa over the next decade, too. Of course, if someone could get the murderous government out of the way, the opportunity for a truly free society is there waiting to be born. The seeds just need to be planted and watered.

On Tuesday, May 2nd, at approximately 1:20 p.m. Mountain time, Pagan said:

“White House proclaims May 1st henceforth to be Loyalty Day.”

So instead of May Day in Red Square, we now have Loyalty Day on Pennsylvania Avenue. That's an improvement?!
(And fed employees get another official holiday at our expense.)

On Tuesday, May 2nd, at approximately 1:35 p.m. Mountain time, Sunni said:

Michael, I wouldn't object in the least if someone wanted to use my truffles as a commodity based currency.

Pagan, nice addition; I'd forgotten about the communist significance of May 1. I've always been more of a mind to celebrate Cinco de Mayo with a generous mug of Sol beer.

On Wednesday, May 3rd, at approximately 10:47 a.m. Mountain time, NeoWayland said:

I'm reminded of some histories of pre-Nazi Germany in the wake of WWI, and of a story by F. Paul Wilson.

In both cases, the currency was devaluing hourly. The only way for people to keep ahead was to spend the money as fast as they could on critical supplies. Most things could only be found on the black market, which didn't accept the debased currency.

At one point in the Wilson story, the currency was only printed on one side because it was too expensive to print it the regular way.

There was an effort in the early US to switch to a currency based on corn liquor, at least for some regions. That makes about as much sense as anything else we've tried.

On Wednesday, May 3rd, at approximately 11:42 a.m. Mountain time, Michael said:

Truffle based currency works for me. The bills could be redeemable for X grams of truffle with, perhaps a larger bill for premium truffles. Choco-bills. Hmm...you could even have chocolate coinage. A "new" form of gelt.Of course with all the competition in that market the currency might be undervalued. Hard to compete against The First National Bank of Hershey.

On Wednesday, May 3rd, at approximately 12:36 p.m. Mountain time, Sunni said:

Neo, is that story his Black Wind, by any chance? He sent that to me, but I've not made time to read it yet.

Michael, I like your thinking! But after tasting some of the premium chocolates of the world, I don't see myself ever going to the First National Bank of Hershey again.

On Wednesday, May 3rd, at approximately 5:08 p.m. Mountain time, NeoWayland said:

I think it was "Enemy of the State." I know it was in The LaNague Chronicles.

On Wednesday, May 3rd, at approximately 9:34 p.m. Mountain time, jeffrey smith said:

Did you notice how Newspeaky the paragraph Happy C. quoted was?

And quite co-incidentally, I'm listening to Shostakovich's 10th Symphony, the perfect antidote to May Day/Loyalty Day-ism in musical terms.

On Wednesday, May 3rd, at approximately 10:39 p.m. Mountain time, Mark Odell said:

Google is your friend.

> "If you have cash you spend it today, because tomorrow it's going to be worth 5 percent less."

What's the difference between that, and exchanging paper dollars for e.g. gold or silver, or for anything else that will hold its value against a depreciating paper currency? (I'm guessing Zimbabweans aren't permitted--officially, or otherwise--to own precious metals, as is the invariable custom of governments in trouble, so they naturally go for the next best things.)

(How much of the loot Mugabe has received in "foreign aid" over the years is safely tucked away in Swiss-and-elsewhere bank accounts -- most-carefully *not* denominated in Zimbabwean dollars?)

On Thursday, May 4th, at approximately 5:58 p.m. Mountain time, billswift said:

You should check out John Pugsley's Alpha Strategy: The Ultimate Plan of Financial Self-Defense, published back in 1980. As he points out, your return is the rate of inflation-whatever it is- and you don't have to pay taxes on it which increases your real return.

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