Head Of Zimbabwe Central Bank Explains QE3

Tyler Durden's picture

Via Chris Becker of Mises SA,

Gideon Gono, the governor of the Reserve Bank of Zimbabwe who destroyed the Zim dollar by creating hyperinflation, weighs in on the parallels between QE3 and the policy he followed last decade, in the RBZ’s mid-term 2012 monetary policy statement. Gono writes (my emphasis in bold):

2.14 Within this context, the Government of Zimbabwe failed to meet fiscal obligations from budgetary allocations which were severely eroded by rising inflation. As such, the financing of recurrent and capital expenditures presented serious challenges to Government.


2.15 These negative developments threatened to bring the country’s social service delivery system and the economy at large to a complete halt, thereby further impoverishing the Zimbabwean people.


2.16 It is against this background that Government stepped in to save the situation through various interventions by the Reserve Bank of Zimbabwe.


2.17 These interventions which were exactly in the mould of bail out packages and quantitative easing measures currently instituted in the US and the EU, were geared at evoking a positive supply response and arrest further economic decline.

But even still,

2.20 Despite numerous intervention measures undertaken by Government through the Reserve Bank of Zimbabwe, economic activity continued to decline progressively with inflation peaking at 231 million percent by July 2008. Other challenges that affected the economy include the following:

  • Frequent power outages;
  • Cash shortages;
  • Acute foreign currency shortages;
  • Skills flight;
  • Vibrant parallel market for goods and foreign exchange;
  • Erratic fuel supplies;
  • Endemic speculative and rent seeking behaviour; and
  • Rapid rise in production costs.

2.21 In addition to this compendium of challenges, the value of the local currency declined precipitously as speculative activities intensified. Against this background, transactions were increasingly undertaken in foreign currencies which were more stable and predictable.

Even though Ben Bernanke and Mario Draghi and all other central bankers will try to convince you that what they are doing are really different to what Gideon Gono did, you should really be taking Gideon Gono more seriously, who is basically admitting that the money printing strategy does not work to ‘stimulate’ growth. All it can stimulate are high- and hyperinflation risks.

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slaughterer's picture

"with inflation peaking at 231 million percent by July 2008"


What a "challenge"!!!


Chris Jusset's picture

So whom does Ben Bernanke idolize more: Charles Ponzi or Gideon Gono of Zimbabwe?

CvlDobd's picture


The new Snorg Tees red head with glasses! So hot! Want to touch the heiny!

Half_A_Billion_Hollow_Points's picture

I hear he has an enormous Keynesianism.  

bigdumbnugly's picture

i  think gono is taller so though it's a toss up i would go with him.

azzhatter's picture

We are not Uganda................oh wait...never mind.. a different fuckhead

macholatte's picture


It must be Gono because he still has a job running the central bank.



tekmike13's picture

What do they use for money now?

crusty curmudgeon's picture

Yes, we can do better!  We're #1...we're #1!

Coming to a developed country near you:

  • Frequent power outages;
  • Cash shortages;
  • Acute foreign currency shortages;
  • Skills flight;
  • Vibrant parallel market for goods and foreign exchange;
  • Erratic fuel supplies;
  • Endemic speculative and rent seeking behaviour; and
  • Rapid rise in production costs.
darteaus's picture

Lets not forget the violent crime:  Murder, looting, rape, etc.

We're still talking about Chicago, right?

icanhasbailout's picture

Detroit, where they use the Canadian dollar as no one has American dollars

Matt's picture

"Vibrant parallel market for goods and foreign exchange;"

So, now we know the politically correct term for black markets. Forget System D, it's all about "parallel markets".

TideFighter's picture

So, a micro black market is a parallelogram? hehe

Offthebeach's picture

It's here already. We call it California.

slaughterer's picture

I am sorry, I just cannot stop laughing at the Zimbabwe inflation figures here. Somebody do an Excell calculation where Gold, S&P, AAPL WTI will be when that inflation rate hits the USA>  

Start of with market values today:

Inflation: 231,000,000%


Dr. Richard Head's picture

But Benny said money printing is good for the globalists....I mean global economy.

The Gooch's picture

And SILVER for us working stiffs...

Where IS that snorkel?

seek's picture

$4 billion an ounce for AU, $76 million/oz for AG.


... and for comparison, a loaf of bread: $4.3 million.

Half_A_Billion_Hollow_Points's picture

27,428,571.42 for 1 Bitcoin

gold-is-not-dead's picture

great... how did you get that number, CDS cap / num of btcs?

Randall Cabot's picture

Glenn Beck just referenced this article and Zero Hedge a few minutes ago on his radio show in a shameless attempt to sell gold for one of his sponsers!

forwardho's picture

Imagine that. Becks been pushing gold since $720.00/oz. He may be an oddball, but he's on the same page as most ZH'rs vis-vie AU and the economy. Not so much with the crying.

Whiner's picture

I want to make money off of gold too! Even off gold bugs. I wonder how much Glenbecker has in AU phys!

Astraea's picture

Why trust gold?     That makes no sense to me because they - the repulsive bankers - control the price and furthermore, they have it all in theri possession.     It seems to me that that is what they alwyas have done.     They even did it with silver from the Venetian banks when they stripped the silver coinage from Europe - amd sent it all along in fleets of ships.via Egypt, to Ghengis Khan - and then the Black Death came - from China!      Although I do not rust Webster Tarpley completely he is a great hostiran and he has written illuminating stuff about all that - AND the Briths "roayl" family.    They are hardly noble people!

TheCanadianAustrian's picture

Just something for people to think about: If you see bread going from $2.00 to $2.10 to $2.21 day-over-day-over-day, you're actually witnessing an annualized inflation rate of over 5 BILLION percent.

This is going to catch people completely off guard.

Poor Grogman's picture

Inflation created by the C/Bs also destroys the governments spending power.

Thus requiring even more printing just to maintain current services.

Feedback is a bitch....

SWIFT 760's picture

Perhaps similar to boiling frogs. 

cynicalskeptic's picture

Zimbabwe had the world's best performing stock market in terms of share price increases (albeit all due to inflation) while this was going on....

Anyone else seeing parallels in the US?


An ever upward moving stock market is not necessarily a good indicatior of overall economic performance - Benny hasn't realized that yet.

FrozenOut's picture

231 000 000 % Adding the extra x100 to make it % really adds value.

GetZeeGold's picture



This should be good...quick...put a guard at the back door.



RacerX's picture

we all know what the Fed and US.gov are doing but somehow are powerless to affect change. I'm not sure anything will change until the people get more "greek-like", and even then it'll be table scraps and no real change.

that's what I think at least..

muppet_master's picture

u mean we need an "expert"

to tell us that you can't create "wealth" by priting???? gee i had no idea !! well i wonder if the yes we kenyan has consulted with the zimbabwean??? LOL !!!!


You know your banking career has already peaked when the Zim central bank prez is calling you out. 

GetZeeGold's picture



It's called getting punked Amigo.


Overfed's picture

You know you're in deep shit when yer gittin' punked by Zimbabwe! :-D

RSloane's picture

I count six currently in the US of the 2.20s [to varying degrees]. I have full faith in our government that with due dilligence we can hit all of them. 

muppet_master's picture

botox bloated hillary:


If u love me..throw urself under the bus!




OR else QEorganizer will go AFTER the clinton supporters of 2008.....EVILNESS u can believe in !! LOL !!!

piliage's picture

...and this just in, HR Haldeman resigns...



darteaus's picture

Mary Rose Woods demonstrates how she accidently erased 5 minutes of the Watergate tapes:


azzhatter's picture

man that is a hideously ugly woman. I'll bet Bill hasn't hit that in 30 years

ParkAveFlasher's picture

I don't know about that.  Bill liked 'em crunchy and frumpy.

machineh's picture

Problem is, so does Hillary.

MachoMan's picture

Not with anything other than a shovel or whiffle ball bat anyway... possibly a bible.

2 types of women typically go to law school: (a) the completely and totally socially inept type with good intentions, but painstakingly awkward involvement; and (b) the type hell bent on being a man and enslaving a male dominated arena.  I'll let you figure out which she is...

PS, I heard that when bill tried the cigar trick on her, it self immolated.

Dick Gazinia's picture

O'le Billy would skull fuck a dead possum.  Remember Monica?  The sight of her makes my nuts crawl up my asshole.

The Shootist's picture

Rhodesia to Zimbawe

U.S. to ...

optimator's picture

When those city folk can't find food will they give them our farms to keep them happy? 

The Shootist's picture

All we have is our property.

LULZBank's picture

Thats right. Its "our" property... Welcome to Socialism now give us our share.