“Zimbabwe must lead the way.”
“The world needs to and will most certainly move to a gold standard and Zimbabwe must lead the way.”
These words coming from, of all people, the chief of Zimbabwe’s central bank, Dr. Gideon Gono, are a sign of the times. That, or an extremely well placed article by the Onion. Either way, the lessons and logic remain valid and sound.
“Zimbabwe is sitting on trillions worth of gold-reserves and it is time we start thinking outside the box, for our survival and prosperity.”
An astute blogger for the same online publication, newzimbabwe.com, points out that though
“there is no shortage of reasons for the collapse of the Zimbabwe dollar, … it is now universally agreed that quasi-fiscal activities by the central bank and excessive printing of money accelerated the demise of the local currency.”
After having looted the population far beyond a sustainable level for too long and killed the golden goose, the powers that be in Zimbabwe have been forced by the ultimate central banker, the world’s international credit market, to mend their ways.
In the meantime, even Mexico may be trying to get a step or two ahead of the Federal Reserve and the U.S. Treasury Department. In the words of Mexican billionaire Hugo Salinas Price,
“Well I think the central bank (of Mexico) is watching what the Federal Reserve has been doing with utter amazement because we have been down that path before and it led to our ruin. So maybe they are saying, ‘We better have a little bit of gold because what is going on with quantitative easing is really hair-raising.’”
One can only hope that alternative systems, preferably based on precious metals such as gold and silver, will be established and viable before “quasi-fiscal activities by the central bank and excessive printing of money” accelerate the demise of the dollar. The people of the United States have absolutely no collective memory, or skill in the use of, any other currency beside the dollar. Even in Weimar Germany the Germans could use British Pounds or Swiss Francs when the Mark collapsed. Americans will have no such familiar fallback if the dollar is destroyed.
Theodore Phalan is an economics student at George Mason University and a previous Sound Money essay contest winner.
