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Headlines From 2008: "Zimbabwe Stock Exchange Soars As Others Crash"

Tyler Durden's picture


From Businessweekly, October 22, 2008

While markets across the world have been crashing, the Zimbabwe Stock Exchange has being seeing record gains as citizens turn to equities to protect their money from the country's hyperinflation.

The benchmark Industrial Index soared 257 percent on Tuesday up from a previous one day record of 241 percent on Monday with some companies seeing share prices increase by up to 3,500 percent.

But before Wall Street traders start packing their bags and heading south, they should bear in mind that these figures are just another representation of Zimbabwe's collapsing economy and are almost meaningless in real terms.

Zimbabwe, once a regional breadbasket, is staggering amid the world's worst inflation, a looming humanitarian emergency and worsening shortages of food, gasoline and most basic goods. Inflation is at 231 million percent, but some experts put it more at about 20 trillion percent.

"Why leave money in the bank?" asked Emmanuel Munyukwi, chief executive of the Zimbabwe Stock Exchange at a seminar on the doing business in Zimbabwe on Tuesday.

"People are forced to come on the stock market. They believe that after hard currency, the stock market is the only viable option where you can get a bit of a return," he said.

Zimbabwe's stock exchange, established in 1896, is one of Africa's oldest and the fourth largest. A securities commission has been established and it is hoping to follow in the footsteps of other countries like its neighbor South Africa and list as a company.

There are 19 stockbroking firms in Zimbabwe and 90 percent of investors come from institutions, asset managers or pension funds. About 8 percent of investors are individuals and only 2 percent are foreigners. This is in comparison to about a decade ago when foreigners made up about 30 percent of investors.

Munyukwi expressed his dismay at the "gross economic mismanagement" by the Zimbabwean government which has led to the collapse of the economy, however, the stock exchange was managing to survive despite the harsh environment.

He cited Zimbabwe's isolation from the international world _ and therefore protection from the financial turmoil _ as one of the reasons the market was performing well.

"We all know what has been happening to the world financial markets, yet the stock exchange in Zimbabwe is breaking all records. We are running short of superlatives to describe the performance of the market," he said.

With the unofficial exchange rate leaping from 30 million Zimbabwean dollars to US$1 on Friday to 100 million to the greenback Monday, showing a shortage of cash, people are trying to hedge against inflation by turning to equities.

Some of the winners have been government controlled Zimpapers, which gained 3,471 percent on Monday to give a share price of US$0.8 while cement maker Lafarge saw their share price rise 1, 400 percent to US$0.90

Companies such as Dawn and African Sun, which are in the tourism sector, have seen real growth in U.S. dollar terms of over 300 percent.

The biggest sector on the stock exchange is financial services with newest listings being in the mining sector. Zimbabwe has vast untapped mineral wealth including gold, diamonds and platinum.

Munyukwi said market performance was also being driven by strong, cheap assets which are offering returns that were more than matching inflation.

"Some people think that this is a bubble about to burst but I don't think so," he said.

He acknowledged though that the market was largely overvalued in Zimbabwean dollar terms but undervalued in U.S. dollars.

Jonathan Waters, head of ZFN, a financial networking and analysis company, cautioned against too much optimism over the performance of the market.

"Nothing has really changed. The market is treading water," he said.

Waters also said volumes being traded were very small and there was no real movement year on year. The market value of the ZSE being about US$2.5 billion compared to South Africa's JSE, which is worth about US$460 billion.

Waters also cautioned about volatility in share prices with some stock being expensive the one week and cheap the next or vice versa.

Munyukwi said a political solution was vital to the resuscitation of the economy and expressed hope that the deadlock in talks over power-sharing between the opposition and President Robert Mugabe would be resolved. A deal is also key to unlocking millions of dollars in much-needed foreign aid.

"There has to be political change," he said. "And I believe it will come sooner than we think."


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Thu, 11/04/2010 - 09:23 | 699157 snowball777
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Numbers fail.

Thu, 11/04/2010 - 09:32 | 699185 macholatte
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from Wikipedia

Hyperinflation in Zimbabwe began in the early 2000s, shortly after Zimbabwe's confiscation of white-owned farmland and its repudiation of debts to the International Monetary Fund, and persisted through to 2009. Figures from November 2008 estimated Zimbabwe's annual inflation rate at 89.7 sextillion (1021) percent.[1] By December 2008, annual inflation was estimated at 6.5 quindecillion novemdecillion percent (6.5 x 10108%, the equivalent of 6 quinquatrigintillion 500 quattuortrigintillion percent, or 65 followed by 107 zeros – one googol 65 million percent).[2] In April 2009, Zimbabwe abandoned printing of the Zimbabwean dollar, and the South African rand and US dollar became the standard currencies for exchange. The government does not intend to reintroduce the currency until 2010.[3]


If you print money like in Zimbabwe... the purchasing power of money goes down, and the standards of living go down, and eventually, you have a civil war.
Marc Faber

Thu, 11/04/2010 - 09:34 | 699195 barkster
barkster's picture

So, i guess this means the Dow is a serious buy in about five years.

Thu, 11/04/2010 - 10:13 | 699322 tamboo
tamboo's picture

+ 500 quattuortrigintillion

sounds like a nice number for qe3.

Thu, 11/04/2010 - 10:22 | 699351 FEDbuster
FEDbuster's picture

Kudos to Glenn Beck's show yesterday, he laid QE2 out for a couple million people:

Calls for Congress to bring Bernanke up on perjury charges regarding his "no monetization" statement given under oath.

Thu, 11/04/2010 - 09:25 | 699162 TheGreatPonzi
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I don't get the point of equities to protect against hyperinflation instead of precious metals and alternate currencies.

Thu, 11/04/2010 - 09:28 | 699173 cossack55
cossack55's picture

Some would say ignorance, I would state categorically...stupidity.

Thu, 11/04/2010 - 09:38 | 699212 FEDbuster
FEDbuster's picture

I wonder if someone could find and post a fact based chart of the cost of one oz of gold in Zimbabwe dollars during this same period?  I am just guessing that it rose even faster than the 200+% days the "stock" market had.

Thu, 11/04/2010 - 13:21 | 700034 BigJim
BigJim's picture

Shouldn't be too hard to calculate. Just look at the price of gold in US$ for the two dates, and then look at the exchange rates between Zim$ and US$.

In some parts of rural Zimbabwe, people were using gold as money, as Zimbabwe's mining is sufficiently undeveloped to allow some small-scale, low-tech gold mining by locals.

Of course, the Grauniad saw this as people being 'reduced' to panning for gold, as if it weren't a legitimate form of value-adding labour.

Fri, 11/05/2010 - 10:03 | 702435 PeaBird
PeaBird's picture

Shouldn't be too hard to calculate. Just look at the price of gold in US$ for the two dates, and then look at the exchange rates between Zim$ and US$.

It's just a maths exercise though, cos' no one accepted it, since the hyperinflated Zim dollar did not exist as that entity after the 1st August 2008, as it had been redenominated 10 billion old Zim dollars to 1 new Zim dollar. Then on 13th Sept 2008, no one accepted Zim dollars as the Zim economy had been 'dollarized', and only foreign currencies & gold were accepted. But what the heck, here goes a maths attempt:

Price of gold around 22nd Oct 2008 was about US$750/oz, and according to this chart:, 1 US dollar was about (10 to the power of 16) Zim dollars around Oct 2008.

So, 750 x (10 to the power of 16) Zim dollars per oz of gold around late Oct 2008. This is still meaningless though since you really can't make this transaction, as gold would not be offered for Zim dollars.

In fact, the most ironic statement from the wikipedia link about the Zim dollar hyperinflation is:

This reflected the reality of the dollarization of the economy

I've bolded the relevant bits from wikipedia:

Introduction of the third dollar

Reserve bank governor Gideon Gono announced on 30 July 2008 that the Zimbabwean dollar would be redenominated.[14] Effective August 1, 2008, ZW$10 billion would be worth ZW$1; the new currency code was ZWR.[14] The planned denominations to be issued are coins valued Z$5, Z$10 and Z$25 and banknotes worth Z$5, Z$10, Z$20, Z$100 and Z$500.[15] While the German firm of Giesecke & Devrientwas no longer printing Zimbabwean currency, The Daily Telegraph reported that the new currency was printed before the relationship was severed and had been kept in storage since then.[16]

Due to frequent cash shortages and the worthless Zimbabwean dollar, foreign currency was effectively legalised as a de facto currency on 13 September 2008 via a special program to officially license a number of retailers to accept foreign money.[17] This reflected the reality of the dollarization of the economy, with many shop keepers refusing to accept Zimbabwe dollars and requesting U.S. dollars or South African rand instead.[18][19] Despite redenomination, the RBZ was forced to print banknotes of ever higher values to keep up with surging inflation, with ten zeros reappearing by the end of 2008 (see below).

Thu, 11/04/2010 - 09:29 | 699176 tmosley
tmosley's picture

This is what people are forced to resort to when no-one will take your crappy currency in exchange for their metals.

Thu, 11/04/2010 - 10:08 | 699300 bb5
bb5's picture

excellent point

Thu, 11/04/2010 - 09:31 | 699181 umop episdn
umop episdn's picture

Try some of this Zimbabweian Strong Stocks Drink. If you can swallow it, you will think you are richer every time the stock market goes up. Otherwise, stick with PMs. (I guess the US LOLlar is no longer an option for them.)

Thu, 11/04/2010 - 09:40 | 699217 SheepDog-One
SheepDog-One's picture

'US LOLar' too funny!

Thu, 11/04/2010 - 11:37 | 699696 chopper read
chopper read's picture

agreed.  hilarious!

Thu, 11/04/2010 - 09:36 | 699201 packman
packman's picture

I don't get the point of equities to protect against hyperinflation instead of precious metals and alternate currencies.

Conjecture on my part, but I'd be willing to bet that even the above-average-Zimbabwean simply didn't have access to PM's or alternate currencies, or to real estate or even other commodities, but did have the ability to buy stocks.

Money often follows the path of least resistance.  Sometimes prices go up on something just because it's really easy to get.

(Like houses in the U.S. 1997-2007.)


Thu, 11/04/2010 - 11:26 | 699636 FullMetalJacket
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If all currencies are depreciating (like now) then shares are a better play, although not as good as PMs.

Thu, 11/04/2010 - 09:30 | 699168 hedgeless_horseman
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once a regional breadbasket

If only the white minority could have put all the natives on reservations, like America did, and slaughtered any that rebelled, like America did, then things might be different.

Thu, 11/04/2010 - 09:30 | 699178 Quinvarius
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Instead they were the first to be eaten.

Thu, 11/04/2010 - 09:48 | 699235 hedgeless_horseman
hedgeless_horseman's picture

...or worse.  The UDI occurred about 100 years too late to succeed.  So it goes. 

Thu, 11/04/2010 - 09:30 | 699179 tmosley
tmosley's picture

Nice job on the collective guilt there, dingus.

Thu, 11/04/2010 - 09:39 | 699199 hedgeless_horseman
hedgeless_horseman's picture

Don't you think Mugabe would be better suited for running a reservation casino (like Native Americans in America) rather than governing a nation?

Sorry about any guilt, but the hypocrisy should be remembered, no?

Thu, 11/04/2010 - 09:41 | 699218 FEDbuster
FEDbuster's picture

With his experience he could be Federal Reserve Chairman instead of Benny "Bubbles" Bernanke the bankster's best buddy:

"I will try again to blow a bubble that will last all day!"

Thu, 11/04/2010 - 09:54 | 699254 tmosley
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The whites didn't steal the land.  Any farmers in that area either bought or homesteaded those lands.  The MINES were stolen, but they weren't in private hands anyways, and Mugabe's government inherited all of those anyways.

Even if that land had been stolen by the whites, it was generations ago.  Why do innocnets have to pay for the crimes of their grandfathers?  Further, the land was NOT returned to its original owners.  It was simply appropriated from a person based on their skin color, and given to someone else based on their skin color and their status within the Mugabe clique.  

So you can fuck off with your white guilt bullshit.

Thu, 11/04/2010 - 10:24 | 699275 hedgeless_horseman
hedgeless_horseman's picture

Your reading comprehension can use a little work.  

I did not say the whites stole anything.  I am merely attempting (maybe poorly) to illustrate the hypocrisy of the American government not recognizing Rhodesia because she took actions far less acrimonious than America took against her own natives. For more on Yankee hypocrisy cross reference America's claim that China is a currency manipulator with yesterday's $600,000,000,000 of manipulation.

Any guilt is your own, friend, not my production. 

Thu, 11/04/2010 - 12:43 | 699914 Lucky Guesst
Lucky Guesst's picture

Lets see waterboard vs stone, temporarily enslave vs chop up.....hmmmm.

As far as Native Americans go, if they used the reservations to preserve their tribal ways (tee-pees, bow and arrows and genuine leather bikinis) then I would feel guilty. But since they build casinos, booze it up and live the same general way we do...... NOW THEIR BIGOTS! Where else on this planet do you get to have only your own race as neighbors?

Another group of people that want to close their own border AND cross every one elses!

Thu, 11/04/2010 - 10:58 | 699504 trav7777
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wasn't a white minority by that point.  The Rhodesian natives were largely on reservations, called slums.  Didn't stop the diversity movement worldwide from trashing the country completely just to make sure it had majority rule.

If majority rule leads to this, of what use is the majority?

Thu, 11/04/2010 - 11:10 | 699524 hedgeless_horseman
hedgeless_horseman's picture

wasn't a white minority by that point. 

Whites never comprised more than 5% of the country's total population, but up to 1979 they never had less than 95% of the total vote in national elections.

If majority rule leads to this, of what use is the majority?

When majority rule (Democracy) defeats the Rule of Law (Republic) the result is usually a Mugabe, no matter how politically correct the individual case may be.

Plan accordingly, friend.

Thu, 11/04/2010 - 09:27 | 699170 FunkyMonkeyBoy
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Er, there is a difference, the $US dollar is the worlds currency (all major commodities are priced in $dollars). If zimbabwe's currency goes through the floor it only really affects Zimbabwe and neighbors at most. If the $US dollar goes through the floor it affects every part of the world and has severe reprocussions, i.e oil-price.

Thu, 11/04/2010 - 09:37 | 699205 macholatte
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Therefore: no more reserve currency status for USA


from wikipedia

The North American Currency Union is a theoretical economic and monetary union of three North American countries: Canada, the United States and Mexico.

Map of a theoretical NAU, with Canada, Mexico, and the United States

Implementation would involve the three countries giving up their current currency units (U.S. dollar, Canadian dollar, and Mexican peso) and adopting a new one, created specifically for this purpose. (Some versions of the theory, particularly those circulating in Canada, assume only the United States and Canada would be included.) The hypothetical currency for the union is most often referred to as the amero.[1][2] The concept is modeled on the common European Union currency (the euro), and it is argued to be a natural extension of the North American Free Trade Agreement (NAFTA) and the Security and Prosperity Partnership of North America (SPP).

Conspiracy theorists contend that the governments of the United States, Canada, and Mexico are already taking steps to implement such a currency, as part of a "North American Union (NAU)".[1][3]


Thu, 11/04/2010 - 13:26 | 700049 BigJim
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They've been talking about this for years... is there any reason to believe it's closer to realisation?

Thu, 11/04/2010 - 09:37 | 699208 packman
packman's picture

...the $US dollar is the worlds currency...

A big word, those two letters.

Thu, 11/04/2010 - 09:52 | 699250 cossack55
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A bigger word......WAS.

Thu, 11/04/2010 - 10:11 | 699314 MachoMan
MachoMan's picture

still is, but slowly giving way to PMs.  It will be the last fiat standing...  not that it's much of a consolation prize.

Thu, 11/04/2010 - 09:38 | 699210 aaronb17
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Well, yeah, but the USD is also priced in other currencies.  If the USD falls and oil rises, it's kind of a wash. 

For example, an ounce of gold was around $1540AUD in June, 2010.  Now it's only $1350AUD.  Despite devaluation of the dollar, and rising gold prices in dollars, the gold price appears to be falling in AUDs.

Of course, it's not, because the AUD has just been appreciating faster than gold against the dollar and other currencies and gold.  When the AUD slows its ascent, gold is probably going to rocket up in that currency.

Thu, 11/04/2010 - 09:42 | 699223 SheepDog-One
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Right, we're not talking about some small country in Africa, its the worlds reserve currency theyre trashing. All boats sink.

Thu, 11/04/2010 - 10:00 | 699272 macholatte
macholatte's picture

Yes, of course, as of today. But think it through to a conclusion based upon information that we have today. That information is the trend that has been stated repeatedly ---> massive printing of USD = massive devaluation of USD relative to commodities. As someone pointed out, the cost of commodities in native currencies, such as the Aussie, is a push because the Aussie appreciates against the dollar.

So the question is this: Does such policy by the reserve currency cause hardship abroad? If yes, then how long do you expect other countries to put up with it? Is it a prelude to war? Is the simple answer to make something else the reserve currency so other countries can cut themselves loose (decoupling) from the US Titanic?




Thu, 11/04/2010 - 10:16 | 699330 MachoMan
MachoMan's picture

The reason our printing policy has persevered here is because, ultimately, it permeates every aspect of our economy and creates unwitting accomplices to the printing.  Likewise, our printing policy has permeated foreign sovereigns, who in response have gone "all in" on the dollar. 

I expect them to tolerate it until they cause the bitter end (which is far longer than most have guestimated so far and I suspect will continue to be so)...  it means their own demise as well...  but sometimes, death is the preferred option.  (presuming they don't beat us to the punch, we'll repudiate our debt, effectively causing the same outcome).

Thu, 11/04/2010 - 11:21 | 699607 FEDbuster
FEDbuster's picture

Now as we move to DOW 35,000 and beyond as measured in worthless paper FRN's the wealth effect that Benron has bet our future on will be an epic fail.  Those not playing the stock market game will not benefit, yet they will still have to pay $10/gal for gas and milk.  Wages (for the few who still have jobs) will not keep up with the real inflation.  Those on fixed incomes from bonds and "inflation" tied benefits are dead in the water.

Most here knew it would come down to hyperdeflation or hyperinflation.  The hyperinflation fix is in and a Zimbabwe outcome is assured.  Benron will fill the debt hole with worthless paper to be given to worthless politicians to spend on worthless programs.

Time to add more garden seeds and fertilizer to the Christmas list.  Starvation will be a bitch.

Thu, 11/04/2010 - 09:31 | 699182 packman
packman's picture

Man, there was some serious, serious money being made then.

(Too bad the money itself was actually worth zilch)

Thu, 11/04/2010 - 09:34 | 699197 Calls and Putz
Calls and Putz's picture

If the dollar goes to zero, stocks go to infinity and investors are still broke.

Thu, 11/04/2010 - 09:44 | 699226 FEDbuster
Thu, 11/04/2010 - 09:37 | 699207 cowdiddly
cowdiddly's picture

Newsflash. Ben Mugabe just seen boarding a Zimbabwe Air jet. 

Thu, 11/04/2010 - 09:38 | 699211 firstdivision
firstdivision's picture

The market surge was noted by ZH back at the end of 2009.


Some one needs to forward this article to all our newly elected officials.  Let us see if real change will occur or not.

Thu, 11/04/2010 - 09:49 | 699242 SheepDog-One
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DOW up 1%, gold up 3.2%, game over. Thats gold up 40$ this morning, wow.

Thu, 11/04/2010 - 09:53 | 699252 chunkylover42
chunkylover42's picture

the dollar is just getting kicked in the nuts today

Thu, 11/04/2010 - 13:24 | 700043 faustian bargain
faustian bargain's picture

kitco website is down...ben's nervously reloading the web page 1000 times a second.

Thu, 11/04/2010 - 13:30 | 700067 BigJim
BigJim's picture


Thu, 11/04/2010 - 10:06 | 699290 Dan Duncan
Dan Duncan's picture

Yes, I'm interested in learning more about your 10 Second TIPS product.  Must I hold this security until maturity, or can I sell it prior to the same on the open market? 


Thu, 11/04/2010 - 10:11 | 699311 wafflehead
wafflehead's picture

where are all the "sell the news" people??? i am still waiting for the market to drop! lolz

Thu, 11/04/2010 - 10:13 | 699321 chistletoe
chistletoe's picture

perhaps you do not understand "this period"?


during this period, a gentleman, desiring to have a leisurely morning, perusing the local journal over a couple of cups of coffee,

would pay for both cups of coffee upon his first entrance

to the establishment of his choice.


reason being, if he waited to buy the second cup until he was ready to drink it,

the price, in the meantime, would have doubled from his first cup.



Thu, 11/04/2010 - 10:20 | 699344 Anarchist
Anarchist's picture

The long economic war by the West on Zimbabwe has failed. China has destroyed the plans by the West to retake Zimbabwe from the Blacks. Once Zimbabweans figure out a way to stop inter-clan fighting their econonomic probelms will wane. Zimbabwe is flush with precious metals and has vast reserves of raw materials, water and arable land. The Chinese are there in force building infrastructure and mines and will be growing food. The GNP growth of Zimbabwe is higher than the US.

Thu, 11/04/2010 - 10:34 | 699405 hedgeless_horseman
hedgeless_horseman's picture

Once Zimbabweans figure out a way to stop inter-clan fighting...

What is the over/under date on that?  Regardless, I'll take the over.

Thu, 11/04/2010 - 10:45 | 699448 Anarchist
Anarchist's picture

When is it going to stop in Iraq, Iran, Nigeria, Burma, Saudi Arabia, Chile, Bolivia, Venezuela, USA...etc?

In Zimbabwe at least everyone is the same ethnic group. That will make it easier to come to some type of power sharing agreement between tribes. In Bolivia and other colonized countries you have the indegenous populations trying to reclaim their country and it's wealth from the European immigrants. Unfortunately the Europeans will not cede one inch since they feel the natives are inferior. Caught in the middle will be the mixed races.

Wait until the US fractures along ethnic and economic lines due to economic stress. We will see how well Blacks, Asians and Hispanics are treated by the majority white population.

Thu, 11/04/2010 - 11:11 | 699554 trav7777
trav7777's picture

asians will be treated fine.  They tend to be industrious, productive, polite, and education-oriented.

Blacks and hispanics tend to have 4-10x the violent crime rate of whites, are disproportionately represented in nonproductive activities, crime, and whatnot.  There's nothing racist about a disparity in treatment when facing a population that is different.

The indigenous populations in these countries are stupid.  The land had NO VALUE to them other than a place to stand on.  The Rhodesian natives were utterly OBLIVIOUS to the productive capacity of the land.  Then, when immigrants came and demonstrated productivity, the natives grew jealous and sought to steal the magic land from the immigrants.  Only it wasn't just the land that had the value, as that land under native stewardship has AGAIN reverted to having no value beyond someplace to stand.

The indigenous populations' idea of how to "gain wealth," even when given a turnkey farm, is to sell all the metal and equipment, tear the pipes out of the houses, and go to the scrap yard.  The fruit now rots on the trees and the ground.

Mankind will never make progress if slothful and stupid indigenous populations are allowed to squat and filibuster by claiming "ownership" to land that they, upon being physically divested of, claim nobody CAN own anyhow!

Thu, 11/04/2010 - 12:17 | 699839 Anarchist
Anarchist's picture

So you believe in manifest destiny? You and Charles Darwin and Winston Churchill would agree on the superiorty of whites over all the races.

The sad fact about whites is that they have transformed the world into a very short candle burning at both ends. The worlds resources will be totally expended and in the end populations will crash. One wonders if whites were so smart why have they set the human race on the course of destruction in 200 years after a million years of evolution.

Thu, 11/04/2010 - 13:39 | 700105 BigJim
BigJim's picture

I think Trav may have understated the degree of force that whites used to appropriate the native's lands, but his point is still valid - without them the value of the land goes back to almost zero. Should the original settlers have compensated the natives for taking their land? Definitely. Does taking the land back off the whites several generations later, and giving it to people on the basis of their skin colour and political connections, rather than whether they were the descendants of the original owners, make any sense, ethically or economically? No.

As for the productivity differences - they stem from cultural differences, not racial.

Thu, 11/04/2010 - 13:42 | 700118 BigJim
BigJim's picture

If they're the same ethnic group, why is there "inter-tribal" and "inter-clan" conflict? 

Anyway, according to this, they're not all the same ethnic group, unless you think of people with dark skin as being all in one ethnic group:

Thu, 11/04/2010 - 11:10 | 699545 Abiotic Oil
Abiotic Oil's picture

Rhodesia was given to Mugabe by the whites, for a reason.


The Chinese have been there for a long time.  They supplied a lot of the armaments to destroy Rhodesia.



Thu, 11/04/2010 - 12:20 | 699846 Anarchist
Anarchist's picture

Mugabe is in power because his dominate tribe run the country and Mugabe fought the whites for many years. When Mugabe croaks another of his tribe will take power. Smaller tribes cannot take power without outside military help by whites.

Thu, 11/04/2010 - 10:30 | 699387 Prof. Auguste Balls
Prof. Auguste Balls's picture

The Zimbabwe stock market went up with hyperinflation because with capital controls prohibiting money from leaving the country there was no where else to go.  There is not a single citizen of Z that would not have preferred to move their capital out of the country/currency.  Capital controls are the key - without them stocks will fall when inflation shows up.  Inflation hurts multiples far more than it helps earnings.  Once true hyperinflation gets going stocks may rise even without capital controls but only because multiples have compressed to low single digits and asset value is the driver.






Thu, 11/04/2010 - 10:48 | 699461 Anarchist
Anarchist's picture

Many Zimbabwe stocks have tangible assets to back them up. Contrast this with many of the stocks in the West backed by vapor and falsified financial data.

Zimbabwe has vast resources. This in the end will see it through the economic attacks by the West to cripple it.

Thu, 11/04/2010 - 11:29 | 699653 trav7777
trav7777's picture

this is fucking stupid...attacks by the West??

The West BUILT everything worth noting in that shithole.  The natives reverted it to its nearly original state in less than one generation, as the natives are attempting to do with the only other prosperous subsaharan nation to the south.

Thu, 11/04/2010 - 12:26 | 699867 Anarchist
Anarchist's picture

Zimbabwe has been at war with Western powers who want to retake control of it's vast resources. The West has done everything it can to cripple the Zimbabwe currency and it's economy. The West has embargoed any goods going in and out of the country. For a country that lives and dies by exporting this is death. It is only China and South Africa that has kept Zimbabwe from going over the edge. As more Chinese and South African investment goes into the country it's financial health is only going to get better hence it's GNP has been on the upswing.

Thu, 11/04/2010 - 10:50 | 699474 TeresaE
TeresaE's picture

And where does it sit today? 

Thank gawd that the Zimbabwe officials back our governments plans, since it has worked out so well for their Main Street.

This time is different, I know, I know.

Did the Weimers, Romans and Argentinians know too?

Thu, 11/04/2010 - 12:30 | 699879 TeresaE
TeresaE's picture

Answered my own question, the market was closed down for some time (no one can seem to find the exact answer to this) and no info as to the assets held in limbo and their value when the market came back online.

But record numbers again this year, so they must have all their other pesky problems solved

Thu, 11/04/2010 - 11:00 | 699517 Abiotic Oil
Abiotic Oil's picture

Rhodesia was a great example of NWO op to put an entire regions natural resources "on hold" until needed.  Kissinger screaming for UN sanctions and getting them to stop the "racist" Rhodesians from stopping a communist invasion on their country (some commie Mugabe has turned out to be eh?)  The "racist" Rhodesians whose army was 2/3 black.


The world turned on them after they declared independence from England...  go figure.


The ZIPRA and ZANLA communist guerillas were tacitly supported by the US while the US was simultaneously beating back the communist wave in Vietnam to stop the dominoes from falling.  Yeah...  


All that farmland.  All those resources, just sitting there, held hostage under a brutal dictator.


What I wouldn't give for some RLI Fireforce missions on our southern border to stop the drug cartel invasion.

Thu, 11/04/2010 - 11:49 | 699733 ATTILA THE WIMP

Great comment. I (an American) was a grunt in the Rhodesian Territorials for two months up near Kariba.

Thu, 11/04/2010 - 12:14 | 699796 hedgeless_horseman
hedgeless_horseman's picture

Nam vet? 

Thu, 11/04/2010 - 14:23 | 700266 Abiotic Oil
Abiotic Oil's picture

There were so many Americans helping the Rhodesians fight the Bush War to maintain their liberty that "gook" became accepted slang for the terrorists.


The very same race-card tactics that were used and enhanced in Rhodesia have been used to great success here against the militia and the Tea Party.

Thu, 11/04/2010 - 12:18 | 699842 WhiskeyTangoFoxtrot
WhiskeyTangoFoxtrot's picture

But stocks just reached a two-year high. Everything is sunshine and rainbows.

Thu, 11/04/2010 - 13:15 | 700010 BigJim
BigJim's picture

"He cited Zimbabwe's isolation from the international world _ and therefore protection from the financial turmoil _ as one of the reasons the market was performing well.

"We all know what has been happening to the world financial markets, yet the stock exchange in Zimbabwe is breaking all records. We are running short of superlatives to describe the performance of the market," he said."

Beautiful. Is he Ben's long lost brother?

Thu, 11/04/2010 - 13:57 | 700181 DavidC
DavidC's picture

Words fail me - is Bernanke really using the Zimbabwean model for his stimulus plans? Dow, 36,000?


Thu, 11/04/2010 - 14:38 | 700330 malek
malek's picture

That really shows the American MSM being punters in terms of headline spinning!

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Fri, 02/25/2011 - 08:30 | 996482 george22
george22's picture

Waters also said volumes being traded were very small and there was no real movement year on year. The market value of the ZSE being about US$2.5 billion compared to South Africa's JSE, which is worth about US$460 billion.

Waters also cautioned about volatility in share prices with some stock being expensive the one week and cheap the next or vice versa.

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