Open letter to the governor of the RBZ. . .unpack the gold coins of the land of Ophir
My beloved brother from another mother, I hope to find you well and safe in the ivory tower.
There were ululations, jubilations and joyful gyrations of all kinds when, on June 24, 2022, you announced that you would be issuing gold coins to provide the general public with a safe store of value.
Many readers of this column from around the world have since asked me to congratulate you on their behalf for finally heeding the Turkish proverb that I have repeated to you many times: No matter how far you have taken the wrong way, turn back.
I don’t blame you for naming the coins Mosiyatunya instead of Munhumutapa Gold Series, as I recommended to you in 2020, when I originally raised the idea of a gold standard with special adaptations for the local situation and wider modernity. environment.
Although I kept talking about “special adaptations”, I didn’t mention them to you in detail because I had considered them for the local situation.
So it has been very interesting for me to observe your attempts to use the coins for the national good.
You have already been accosted by a parliamentary caucus asking how the coins would benefit the man on the street.
Others have commented that the whole coin idea is actually a wet squib.
There’s a trending video on social media showcasing the current local $100 bill. The note bears the image of the legendary national heroine Nyakasikana, the medium spirit of Nehanda.
The video would be most hilarious if it weren’t so tragic.
In the video, the image of Nyakasikana comes to life and begins to sing a lament, or is it a dirge?
The lyrics are addressed to His Excellency the President of Zimbabwe.
She scolds and berates him asking if heroes and heroines like her have died to see from their shallow graves worthless currency that can’t buy a loaf of bread.
This video correctly portrays the mood and attitude of Zimbabweans and the world regarding the local currency. And so despite the introduction of gold coins, there is an inexorable groundswell for the re-dollarization of the economy because all hope in the local currency is lost. Simply introducing the gold coins without the “special adaptations” will just be another wild goose chase like the one you did at Casino Royale in the name of prize discovery.
However, I would like to encourage you by making sure that you are now on the right track.
But you may be suffering from some kind of hangover due to your very long stay on the bad winding road where you were chasing the very fast wild goose called “price discovery”.
Everyone knows how you openly confessed to seeing demons while you were on this wrong road.
You can rest assured that on this new and correct road you are well on the way to success if you apply the special adaptations which I recommended to you from the beginning.
Your efforts to sell local and foreign currency coins through commercial banks are indeed commendable and generally go in the right direction.
However, these efforts are not aggressive enough for the dire situation our currency finds itself in. It would indeed be fair to describe your efforts so far as timid, sorry, docile, weak and dispassionate at a time when you have room to roar. free like an inhabited young lion.
Your current strategy is analogous to throwing a juicy bone to a pack of hungry dogs and watching with excitement and expectation out into the unknown to see which dog will claim the bone.
You must realize at this early stage that the man in the street cannot afford to buy a gold coin even if you offer it to him at half price in local currency. However, he is fully entitled to benefit significantly from the presence of the coins in his domain.
Knowing your resourcefulness, I will only give you the details of particular adaptations on a silver platter if you invite me to have a cup of tea in the ivory tower.
In the meantime, I’m going to give you some useful pointers on the results you can aim to achieve with the gold coins if you adopt the special adaptations.
Stop the relentless fall of the local currency and watch it strengthen. Avoid a head-on collision between the US$ and the Z$ that you were watching every week at Casino Royale. Sterilize funds used for speculative attacks against the local unit. Create demand for the local currency among international and local investors. Eliminate the local currency exchange rate on itself (i.e. different rates for hard cash, bank transfers, mobile transfers, etc.) Take control of the local currency exchange rate local unit and set a level for it. Increase the value of the current money supply that you have already issued. Reduce the need to print more money. Reduce the price of goods and services in local currency. Bring back national pride in a strong and stable currency with regional and international respect.
Since you finally have the tool to achieve all of the above, I want to tell you that it is now much easier for you to succeed than to fail. You now certainly have the opportunity to achieve what no other central bank governor has achieved on the African continent. I would even go so far as to say that you are now on the right path, not only on the right path, but in building the roads leading to the success of your compatriots.
As I leave, I will offer you another proverb, Chinese this time: Wealth is near if roads are built.
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