News, Rumors and Opinions Tuesday AM 5-3-2022
Mnangagwa looks to Putin example in bid to revive floundering Zim $
2nd May 2022
PRESIDENT Emmerson Mnangagwa, Zimbabwe’s President, is trying to imitate Russian President Vladimir Putin as he tries to revive Africa’s most underperforming currency.
According to Persistence Gwanyanya (a Harare-based economist who is a member of the Reserve Bank of Zimbabwe’s Monetary Policy Committee), Mnangagwa’s government may announce plans to pay services in Zimbabwe dollars as soon as this week.
This would be in response to U.S. sanctions on Zimbabwe for its economic mismanagement over the past two decades.
Gwanyanya stated Sunday that there will be a shift in government’s favour toward its own currency.
“We are learning lessons from Russia,” he said.
“One of these is that heavy dependence upon U.S. dollar is not good. We will try to reflect some of these geopolitical issues within our local economy.”
Russia’s efforts to boost the ruble through demanding payment in its currency for oil and gas has resulted in the ruble being protected.
Putin took the decision to use this measure due to heavy sanctions against him for his war in Ukraine.
However, it may prove more difficult for Zimbabwe to get rid of its dependence on the U.S. Dollar. The greenbacks can be used to pay almost everything, from fuel to food and medicines to road tolls.
Mnangagwa’s government was previously criticized for undermining its currency to favour the U.S. dollar and paying its workers bonuses in foreign currency last fiscal year.
The new measures will allow for increased payment in local currency to pay for services such as passports, import duties, and taxes.
Gwanyanya stated that an agreement has been reached with Treasury. Officially, the local currency trades at 159.34 to the US dollar and has lost a third this year. It is sold on the parallel market at 400 dollars.
Mnangagwa stated last month that the West has met Putin who demands payment in rubles for oil and gas.
“So now we are telling our industrialists that all the big companies must use the Zimbabwean dollar to buy any investment.”
Read full article here: https://www.newzimbabwe.com/mnangagwa-looks-to-putin-example-in-bid-to-revive-floundering-zim/
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Courtesy of Dinar Guru
Fleming Venezuela and Iraq have both fulfilled the ISO 20022 requirements and agree to participate in world trade with ISO 20022 compatible digital currency. A State-Backed, Asset-backed CBDC. This is the completion of the list of “first basket” countries we’ve been waiting for. According to...Military contacts, this is all we’ve been waiting for.
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KTFA:
Clare: UNAMI calls for a "genuine collective will" to end the political stalemate in Iraq
22-05-02 10:43
Shafaq News/ The United Nations Assistance Mission for Iraq (UNAMI) stressed on Monday the importance of having a sincere collective will to end the political stalemate in the country, calling on Iraqi leaders to agree on forming a government "without delay."
In a telegram of congratulations to Eid al-Fitr, received by Shafaq News Agency, the mission said, "On this holiday, we stress the importance of overcoming the political stalemate for the benefit of all Iraqis, and as major weaknesses at the local level are exacerbated by the ongoing effects of the pandemic and global geopolitical tensions, a sincere collective will to resolve should now prevail. Political differences in order for the country to move forward and meet the needs of its citizens.
The mission urged the political leaders in Iraq to "assume their responsibilities and expedite the process of forming the government, observing the constitutional timeframes, and agreeing without further delay on a government capable of quickly and decisively to address Iraq's long list of outstanding local priorities."
Iraq enters a "political blockage" between its political blocs in light of a desire to form a national majority government, with another party calling for the formation of a consensual government with each party's commitment to its demand, which has been unsuccessful in any attempt to form a government so far. LINK
Prof. Steve Hanke: Five Drivers For a Commodity Bull Market
Palisades Gold Radio: 5-3-2022
Tom welcomes Professor of Applied Economics Steve Hanke to the show. He discusses learning the intricacies of the commodity markets at a young age and over his extensive career.
Gold tends to have a fairly steady interest, particularly since the closing of the gold window in 1971. Gold in one way or another will always be a part of the international financial system.
The economics profession considers 50% inflation and up as the textbook definition of hyperinflation. There have been sixty-two such hyperinflations throughout history. They always occur when fiscal deficits become very large, and governments involved can't finance those deficits through taxes or bonds. Governments end up running the proverbial printing press.
Recent hyperinflations include Yugoslavia in 1994 where they reached 313 million percent per month. The former Soviet states had problems with not having tax systems or access to international markets. The last hyperinflation occurred in Venezuela.
He discusses how the 2008 hyperinflation in Zimbabwe ended up completely collapsing, and the local population switched to the dollar.
We are currently in an era of money printing, and we've had a forty-one percent increase in the money supply. Even now we're still increasing the money supply at nearly ten percent when we should be around six.
Steve explains the five different factors that are affecting commodity prices. These coupled together are creating a perfect cocktail for a new supercycle in commodities.
He discusses the impacts of the Fed's policies and why much of the Fed's current problems are with the excessive liquidity held by commercial banks. This liquidity makes it difficult for the Fed to contract the money supply any time soon.
The Fed and government are the main reasons for inflation although the media is currently blaming everything else including Putin.
Steve discusses his sentiment indicator which measures the global opinion of gold. It's based on a computer analysis of news articles and can change quite rapidly.
He explains his 95% rule which states that 95% of the information in the press is wrong or irrelevant.