Zimbabwe Raises Interest Rates To %200

avatar

Zimbabwe has announced that they will be raising their interest rates from 80% to 200% to help curb the rampant inflation of 192%. The bank is looking to tighten up supply of currency to try and destroy demand for goods and services in a bid to combat inflation.

Surging commodity prices stemming from disrupted supply chains
cock ups during covid and now the Russia-Ukraine conflict has compounded pressure on the local currency of Zimbabwe. Zimbabwe fucked up their farming industry as they used to be the bread basket of Africa, they were the Ukraine of Africa.

HIVE Blog Header.png

Now they relied on Ukraine for imports as does South Africa, and with the war, the annual inflation rate has been in triple digits for two straight months, rising to 191.6 percent in June from 131.7 percent in the previous month, reported Livemint.

Screenshot 20220628 at 10.41.11.png

As a result, the Zimbabwean dollar has dropped 69 percent to $361 per US dollar.

The keynesians continue to cry

This is keynesian insanity at its best, if you cut off supply of currency and make it harder to borrow, you're hoping that demand falls off a cliff, but what you don't want to speak about is that you're also killing supply at the same time. When the price of money increases, so does goods, energy, raw materials, and making creating a certain amount of output uneconomical.

However, certain goods and services are price insensitive, and food and energy are not going to go to zero like Netflix subscriptions if you raise the price of money. People have to eat, travel and keep warm, this is the madness of central planning.

All central banks are doing the same thing, walking the same tight rope around the world, they just do it to varying degrees and Zimbabwe just looks like the clown show because to normies the percentages around outrageous, but if we look at the US offering 1.5% fed funds rate on an 8.6% compounding inflation rate, is it any less dumb? I don't think so.

DEFI bros cry harder

So why aren't you flocking toward Zimbabwe with your money right now? Because the returns are paid out in Zimbabwean dollars. Then how do you

At least Zimbabwe has a central bank backing its currency and lawmakers forcing people to use the currency so there is reservation demand for the capital you earn, even though it's pretty much worthless.

As for your DEFI token, if you don't get another Ponzi-loving bro to take the token off your hands to try and get that fake returns, you're out of luck.

It's literally the same argument you're making chasing percentage returns and not accounting for the currency risk. DEFI is fiat, fiat is DEFI.

The contagion is spreading

As for someone like me, this is an alarming problem, considering South Africa is in the shitter already, as Zimbabwe falls it pushes more of its citizens here to try and make a living. Adding more inflationary pressures while sending money come to loved ones, driving more capital flight.

In addition, Zimbabwe is South Africa's 12th biggest trading partner, and as their economy falls, so does trade between them, which will affect South African supply chains.

It's only a matter of time really, how much time do we have I don't know but I am grateful for every day I get that I have capital that I can take out of the game, and hold in self-custody with bitcoin.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, "I am a Jessie."

Let's connect

If you liked this post, sprinkle it with an upvote or esteem and if you don't already, consider following me @chekohler and subscribe to my fanbase

Earn Free bitcoin & shopEarn Free Bitcoin & shopClaim Free Bitcoin & Shop
lightning.jpgSmiles.jpgthebitcoincompany.jpg

Posted Using LeoFinance Beta



0
0
0.000
11 comments
avatar

Planning has fallen short, subsistence economy does not work, bread basket regions like Zimbabwe fell 40 years ago, South Africa dismantled what worked, Ukraine in war not anticipated once again massive cracks reveal inadequacies on our continent.

Self-custody protection is about the only method one is able to rely on to a certain degree within a world crumbling, frugal living comes first to sustain life.

0
0
0.000
avatar

Couldn't have surmised it any better, we're in for some tough times head, people think this stuff is isolated but as each one falls it puts pressure on the next domino to fall

Relying on a government to save you is a hazardous occupation

0
0
0.000
avatar

Relying on a government to save you is a hazardous occupation

Well said, this has been coming for a long time, gravy train left the station, now the gnashing of teeth!

0
0
0.000
avatar

and where does this news about Zimbabwe come from ?! Incredible what is happening in certain states. All this makes me think that things will also get worse in Europe and also here in Italy

0
0
0.000
avatar

Zimbabwe has been through hyperinflation before and they only recently brought back their own currency they used to use foreign currency instead

Now that the supply chains are having issues and remittance capital from Zimbabweans working in other counties is lowering and the cost to pay back debt increases the currency always becomes the way to correct the error

As for Europe yes even with Italys manufacturing, the cost of energy increasing is going to make it harder to produce stuff, increasing prices, putting more pressure on businesses! I can only see the ECB devaluing the Euro more to keep it going

It’s not going to be pretty for euro zone countries, the southern countries will likely “default” first so let’s see is it Italy, Portugal, Greece or Spain?

0
0
0.000
avatar

Everything you have written seems to happen ... I am afraid that you have put Italy on the list

0
0
0.000
avatar

This post has been manually curated by @bhattg from Indiaunited community. Join us on our Discord Server.

Do you know that you can earn a passive income by delegating your Leo power to @india-leo account? We share 100 % of the curation rewards with the delegators.

Please contribute to the community by upvoting this comment and posts made by @indiaunited.

0
0
0.000
avatar

That is not cool for the people who try to survive in the economy of Zimbabwe.

0
0
0.000
avatar

not much else they can do, the bank is only trying to slow down the eventual hyperinflation that's coming

0
0
0.000
avatar

Seems to me that Zimbabwe has already been down this road before... I think I still have a trillion dollar Zimbabwe bank note somewhere that I used as a bookmark, for a while... why would they have learned from history? Nobody ever seems to...

=^..^=

Posted Using LeoFinance Beta

0
0
0.000
avatar

The only one that seems to have learned their lesson from blowing up their own currency is El Salvador they moved to the dollar and now added bitcoin

Zimbabwe are now a dual currency country with the zim dollar and US dollar while they also added gold backed bank accounts

They are going to try everything to keep their shitcoin going because it's profitable for the politicians to keep stealing and the bankers

The only way to save the situation is bitcoin and I hope the citizens find that out sooner or later

0
0
0.000