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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Tue, 10/16/2012 - 11:32 | 2894801 slaughterer
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"with inflation peaking at 231 million percent by July 2008"


What a "challenge"!!!


Tue, 10/16/2012 - 11:33 | 2894823 Chris Jusset
Chris Jusset's picture

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

Tue, 10/16/2012 - 11:37 | 2894851 CvlDobd
CvlDobd's picture


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

Wed, 10/17/2012 - 05:49 | 2897484 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

I hear he has an enormous Keynesianism.  

Tue, 10/16/2012 - 11:37 | 2894855 bigdumbnugly
bigdumbnugly's picture

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

Tue, 10/16/2012 - 11:42 | 2894880 azzhatter
azzhatter's picture

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

Tue, 10/16/2012 - 14:38 | 2895692 macholatte
macholatte's picture


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



Wed, 10/17/2012 - 00:52 | 2897379 tekmike13
tekmike13's picture

What do they use for money now?

Tue, 10/16/2012 - 11:33 | 2894829 crusty curmudgeon
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.
Tue, 10/16/2012 - 11:39 | 2894866 darteaus
darteaus's picture

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

We're still talking about Chicago, right?

Tue, 10/16/2012 - 11:43 | 2894883 LongSoupLine
LongSoupLine's picture

Camden, D.C.?

Tue, 10/16/2012 - 11:49 | 2894906 icanhasbailout
icanhasbailout's picture

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

Tue, 10/16/2012 - 12:32 | 2895075 Matt
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".

Tue, 10/16/2012 - 13:04 | 2895215 TideFighter
TideFighter's picture

So, a micro black market is a parallelogram? hehe

Tue, 10/16/2012 - 12:23 | 2895034 Offthebeach
Offthebeach's picture

It's here already. We call it California.

Tue, 10/16/2012 - 11:37 | 2894850 slaughterer
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%


Tue, 10/16/2012 - 11:45 | 2894895 Dr. Richard Head
Dr. Richard Head's picture

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

Tue, 10/16/2012 - 11:49 | 2894903 The Gooch
The Gooch's picture

And SILVER for us working stiffs...

Where IS that snorkel?

Tue, 10/16/2012 - 12:13 | 2894992 seek
seek's picture

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


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

Wed, 10/17/2012 - 05:55 | 2897486 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

27,428,571.42 for 1 Bitcoin

Wed, 10/17/2012 - 13:44 | 2898470 gold-is-not-dead
gold-is-not-dead's picture

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

Tue, 10/16/2012 - 12:09 | 2894986 Randall Cabot
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!

Tue, 10/16/2012 - 12:43 | 2895120 forwardho
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.

Tue, 10/16/2012 - 19:04 | 2896374 Whiner
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!

Thu, 10/18/2012 - 13:25 | 2901653 Astraea
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!

Tue, 10/16/2012 - 12:19 | 2895013 TheCanadianAustrian
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.

Tue, 10/16/2012 - 12:52 | 2895156 Poor Grogman
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....

Wed, 10/17/2012 - 00:29 | 2897350 SWIFT 760
SWIFT 760's picture

Perhaps similar to boiling frogs. 

Tue, 10/16/2012 - 12:26 | 2895050 Deathrips
Deathrips's picture


Tue, 10/16/2012 - 19:42 | 2896453 cynicalskeptic
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.

Tue, 10/16/2012 - 20:19 | 2896520 FrozenOut
FrozenOut's picture

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

Tue, 10/16/2012 - 11:32 | 2894804 GetZeeGold
GetZeeGold's picture



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



Tue, 10/16/2012 - 11:31 | 2894806 RacerX
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..

Tue, 10/16/2012 - 11:30 | 2894807 muppet_master
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 !!!!

Tue, 10/16/2012 - 11:31 | 2894815 SHEEPFUKKER

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

Tue, 10/16/2012 - 11:32 | 2894817 GetZeeGold
GetZeeGold's picture



It's called getting punked Amigo.


Tue, 10/16/2012 - 11:59 | 2894939 Overfed
Overfed's picture

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

Tue, 10/16/2012 - 11:34 | 2894821 RSloane
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. 

Tue, 10/16/2012 - 11:33 | 2894824 muppet_master
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 !!!

Tue, 10/16/2012 - 11:37 | 2894860 piliage
piliage's picture

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



Tue, 10/16/2012 - 11:49 | 2894904 darteaus
darteaus's picture

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


Tue, 10/16/2012 - 11:44 | 2894886 azzhatter
azzhatter's picture

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

Tue, 10/16/2012 - 11:48 | 2894901 ParkAveFlasher
ParkAveFlasher's picture

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

Tue, 10/16/2012 - 12:51 | 2895145 machineh
machineh's picture

Problem is, so does Hillary.

Tue, 10/16/2012 - 13:22 | 2895279 MachoMan
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.

Tue, 10/16/2012 - 15:10 | 2895784 Dick Gazinia
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.

Tue, 10/16/2012 - 11:33 | 2894828 The Shootist
The Shootist's picture

Rhodesia to Zimbawe

U.S. to ...

Tue, 10/16/2012 - 12:07 | 2894977 optimator
optimator's picture

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

Tue, 10/16/2012 - 12:19 | 2895020 The Shootist
The Shootist's picture

All we have is our property.

Tue, 10/16/2012 - 13:53 | 2895429 LULZBank
LULZBank's picture

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

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