Several years after revealing the first one hundred trillion modern-day banknote and seeing its economy implode in a cloud of hyperinflationary smoke, Zimbabwe’s problems are back with a vengeance. And this time not even more currency destruction, as Zimbabwe does not actually have its own currency any more having largely shifted to foreign currencies primarily the USD and the ZAR – can help. The problem? The country is officially out of cash. From AFP: “After paying public workers’ salaries last week, the balance in cash-strapped Zimbabwe’s government public account stood at just $217, Finance Minister Tendai Biti said Tuesday. “Last week when we paid civil servants there was $217 (left) in government coffers,” Biti told journalists in the capital Harare, claiming some of them had healthier bank balances than the state. “The government finances are in paralysis state at the present moment. We are failing to meet our targets.”” Sadly not even the projected and quite hilarious 5% GDP growth of the now completely broke country, which can’t even create money out of thin air as there is nobody who will lend it even one penny, will do much if anything. (Here we will briefly ignore the fact that Zimbabwe’s net cash position is about $120,000,000,000,217.00 greater than that of the US)
The less than fun, for its citizens at least, details:
The move demolished investor confidence in the country, paralysed production, prompted international sanctions and scared off tourists.
Zimbabwe’s government has warned it does not have enough money to fund a constitutional referendum and elections expected this year.
Biti said that left no choice but to ask the donors for cash. “We will be approaching the international community,” he said.
The country’s elections agency said it requires $104 million to organise the vote.
Government’s national budget for this year stands at $3.8 billion and the economy is projected to grow 5.0 percent.
At least Zimbabwe can sell its gold. Well, it could, if it had any.
And when even the government apartchicks, which also includes the army, received no more cash, they turn violent, and quite hostile, to the very same government that provided for them for years. Which is to be expected: because as history has shown that without fail what follows hyperinflation, is war. Which incidentally is all the US government will need to position its southern drone base in order to quell the imminent appearance of “Al Qaeda” rebels and militants in the South African country. This, in turn would fall perfectly with the WSJ’s headline article totay: “U.S. to Expand Role in Africa.”
Because while the US is about to have western Africa covered with its drone presence, it needed a lucky break in order to get involved in the just as valuable south.
Why, again, does the US need to be in every nook and corner Africa? Same explanation we gave yesterday: to prevent the rapid Chinese colonization of the last continent, a development the US has been well behind the curve on. And since it has no cash to spend to compete with China, it will do the next best thing – send in the drones.