Posts

Zimbabwe Raises Interest Rates To %200

avatar of @chekohler
25
@chekohler
·
·
0 views
·
3 min read

Zimbabwe has announced that they will be raising their interest rates from 80% to 200% to help curb the rampant inflation of 192%. The bank is looking to tighten up supply of currency to try and destroy demand for goods and services in a bid to combat inflation.

Surging commodity prices stemming from disrupted supply chains
cock ups during covid and now the Russia-Ukraine conflict has compounded pressure on the local currency of Zimbabwe. Zimbabwe fucked up their farming industry as they used to be the bread basket of Africa, they were the Ukraine of Africa.

Now they relied on Ukraine for imports as does South Africa, and with the war, the annual inflation rate has been in triple digits for two straight months, rising to 191.6 percent in June from 131.7 percent in the previous month, reported Livemint.

As a result, the Zimbabwean dollar has dropped 69 percent to $361 per US dollar.

The keynesians continue to cry

This is keynesian insanity at its best, if you cut off supply of currency and make it harder to borrow, you're hoping that demand falls off a cliff, but what you don't want to speak about is that you're also killing supply at the same time. When the price of money increases, so does goods, energy, raw materials, and making creating a certain amount of output uneconomical.

However, certain goods and services are price insensitive, and food and energy are not going to go to zero like Netflix subscriptions if you raise the price of money. People have to eat, travel and keep warm, this is the madness of central planning.

All central banks are doing the same thing, walking the same tight rope around the world, they just do it to varying degrees and Zimbabwe just looks like the clown show because to normies the percentages around outrageous, but if we look at the US offering 1.5% fed funds rate on an 8.6% compounding inflation rate, is it any less dumb? I don't think so.

DEFI bros cry harder

So why aren't you flocking toward Zimbabwe with your money right now? Because the returns are paid out in Zimbabwean dollars. Then how do you

At least Zimbabwe has a central bank backing its currency and lawmakers forcing people to use the currency so there is reservation demand for the capital you earn, even though it's pretty much worthless.

As for your DEFI token, if you don't get another Ponzi-loving bro to take the token off your hands to try and get that fake returns, you're out of luck.

It's literally the same argument you're making chasing percentage returns and not accounting for the currency risk. DEFI is fiat, fiat is DEFI.

The contagion is spreading

As for someone like me, this is an alarming problem, considering South Africa is in the shitter already, as Zimbabwe falls it pushes more of its citizens here to try and make a living. Adding more inflationary pressures while sending money come to loved ones, driving more capital flight.

In addition, Zimbabwe is South Africa's 12th biggest trading partner, and as their economy falls, so does trade between them, which will affect South African supply chains.

It's only a matter of time really, how much time do we have I don't know but I am grateful for every day I get that I have capital that I can take out of the game, and hold in self-custody with bitcoin.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, "I am a Jessie."

Let's connect

If you liked this post, sprinkle it with an upvote or esteem and if you don't already, consider following me @chekohler and subscribe to my fanbase

Earn Free bitcoin & shopEarn Free Bitcoin & shopClaim Free Bitcoin & Shop

Posted Using LeoFinance Beta