The once prosperous farming powerhouse nation of Zimbabwe is an excellent case study in what happens when you refuse to learn from your mistakes.
In the early 2000’s, Zimbabwe decided to go on a money printing spree. In just 2001, the prices of retail goods doubled. The hyperinflation in this South African nation skyrocketed to the point that by 2007, the country’s prices doubled approximately every day. Economists have estimated that the hyperinflation actually reached 500 billion percent. This is a staggering figure your mind can not practically understand. The nightmare ended in 2009 when the government gave up on their currency and the country turned into an economy with hard currency. Businesses and consumers there have utilized other nation’s currencies including American dollars, pounds, euros, Chinese Yuan, and South African rand since then. You would think that the dictator Robert Mugabe and his cronies would have learned the lesson finally. Yet now their government is beginning to print money again called “bond notes.” The best part is that this time, they are promising they will use restraint and limit the quantities they print. This is precisely what they promised 15 years ago. It is all too easy to hold up this example and scoff, yet the U.S. and other western developed nations are making similar repetitive mistakes where their banks are concerned. Ten years ago, the banks were dangerously undercapitalized and used sneaky accounting ploys like credit default swaps to hide their dangerous exposure to risk. The largest collapse since the Great Depression resulted starting in 2007 and 2008 in the form of the Financial Crash and Great Recession. You would think we had learned from our mistakes. Today, the Western banking systems are again perilously undercapitalized and wracking up even more enormous dollar amounts of credit default swaps and other risk instruments. In Europe they are even passing negative interest rates on to customers as their countries’ central banks desperately try to kick start growth by any means they can. You at least as an individual can learn from these past mistakes which are being repeated. Remember that as a deposit holder in one of the major banks, you are simply an unsecured creditor of an institution whose only hope for a bailout next time lies in the worn out mantra “too big too fail.” This next time, the $20 trillion in debt U.S. government will not be able to save the entire banking system. Only a fool puts all of his hard earned money at risk this way. Now is the time to park a portion of your savings and assets into the ultimate financial insurance policy of gold. It is not tied to the actions of a central bank and has no risk of collapse or counterparty risk attached to it like the commercial banks. Click here to request your free gold investment kit from Regal Assets to learn more about how you can protect your portfolio by adding physical gold and silver (USA ONLY)
Bullion.Directory precious metals guest post 1 November, 2016
Curated By Alison Macdonald
Commercial Editor at Bullion.Directory
Rather than take a step back and try to reduce inflation, the Zimbabwean government printed money faster to try to get out ahead of it. They had to print enormous new currency denominations that started with thousand and ten thousand Zimbabwe dollar notes and finally reached million, billion, and at last trillion dollar notes.
There is no reason to keep all of your hard earned assets in near zero interest paying accounts while you wait for the scheming banks to once again go up in flames more severely than previously. Gold protected people in the last financial crisis, and it will again, as it always does.
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