According to a news report in New Zimbabwe, the head of the Zimbabwe Central Bank is warning that the U.S. dollar may lose its reserve currency status soon and suggested that Zimbabwe institute a gold backed currency.
Central Bank Chief Gideon Gono said in an interview that “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. We need to re-think our gold-mining strategy, our gold-liberalisation and marketing strategies as a country…to me, Gold has proven over the years that it is a stable and most desired precious metal.”
The irony here is overwhelming. Zimbabwe, a country without a functioning currency due to hyperinflation is worried about the declining value of the U.S. dollar. The Zimbabwe dollar has been worthless since 2009 and the Zimbabwe economy now functions through the use of foreign currencies, including the U.S. dollar.
The central bank of Zimbabwe had fueled hyperinflation the old fashioned way by trying to use printed money to pay government expenses. The people of Zimbabwe were not fooled and the currency soon lost all value. A $100 trillion dollar Zimbabwe bank note is now a novelty item on EBay, going for about $7 each.
$100 Trillion Dollar Zimbabwe Note
The U.S. dollar must be in real trouble if officials of Zimbabwe are worried about accepting U.S. dollars. Zimbabwe central bank officials have had first hand experience seeing how quickly a paper currency can become worthless.
According to Central Bank Chief Gono, “Zimbabwe is sitting on trillions worth of gold-reserves and it is time we start thinking outside the box, for our survival and prosperity. The world needs to and will most certainly move to a gold standard and Zimbabwe must lead the way”.
How ironic would it be if the Central Bank of Zimbabwe winds up with the world’s strongest currency by introducing a gold backed currency?
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