Zimbabwe Calls for Honest Money

‘Here’s a novel idea: why don’t we try the gold standard?’

That’s not exactly how he phrased it, but yesterday’s statements by the Governor of the Reserve Bank of Zimbabwe, Dr Gideon Gono, who oversaw the complete collapse of his nation’s economy, are very telling.

Gono has held the reins at the bank since 2003 and was reinstated to another five year term at the height of Zimbabwe’s economic collapse in 2008 and in spite of numerous controversies surrounding his private activities.

“There is a need for us to begin thinking seriously and urgently about introducing a Gold-backed Zimbabwe currency which will not only ( be) stable but internationally acceptable,” he said in an interview with state media.

“We need to re-think our gold-mining strategy, our gold-liberalisation and marketing strategies as a country. The world needs to and will most certainly move to a gold standard and Zimbabwe must lead the way.”

In 2008 inflation became so bad in Zimbabwe that no amount of creatively added zeros could slow the catastrophic collapse of the “Zim Dollar”. Traditional record keeping methods could not keep up with the rapid rate of inflation and now the currency is collected as little more than a reminder of how fragile demonetized paper currency truly is.

The central bank has also indicated that the proposed move was due in part to the opinion that the days of the US Dollar are numbered.

“The events of the 2008 Global Financial Crisis demand a new approach to self reliance and a stable mineral-backed currency and to me, Gold has proven over the years that it is a stable and most desired precious metal,” Gono said.

“Zimbabwe is sitting on trillions worth of gold-reserves and it is time we start thinking outside the box, for our survival and prosperity.”

Fortunately, it only took him a few years to figure that out.