And @Dash122
The ZIG$
Having Readthese two articles
https://bulawayo24.com/index-id-opinion-sc-columnist-byo-243313.html
My first “concern”was to check if Mutapa Fund will have enough money left in the tank to assistIVZ and fund development of Mukuyu !!My second “concern” was - is the DailyMaverick article some serious US inspired
“political spin” against the Zimbabwe (Mutapa) Sovereign Wealth Fund - to oppose them owning 100% of a Gold Mine (plus other precious mine/mineral assets) when it wants to underwrite its new Gold Backed Currency - the ZIG ?….
A ZIG Gold Backed Currency might effectively de-couple Zimbabwe ZW$ dependency on / linkage to the US Petrodollar ?
BUT !!
How many Gold Backed Currencies are there in the World ?Can they be Successful ?
The new gold-backed currencycalled theZiG, or Zimbabwe Gold.
The introduction of ZiG is an attempt to mitigate the currencyinstability and hyperinflation that has plagued Zimbabwe for decades.
The ZIG came into effect from April 5,2024 and will co-circulate with other foreign currencies in the Zimbabwe economy.
Banks in Zimbabwe have been convertingthe country's previous national currency, the Zimbabwe dollar, into ZiGs.
The swap rate was decided by Zimbabwe’s central bank based on theclosing interbank exchange rate and the price of gold as of April 5, 2024.
This swap rate was used to make legitimate conversions of all ZW$ deposits in the banking sector, all ZW$ loans and advances made by the sector, all prices of goods and services in ZW$ and any other ZW$ denominated obligations.
Currently swaprate for 100 trillion Zimbabweandollars (ZW$’s ) willfetch only 40 U.S. cents.https://www.xe.com/currencyconverter/convert/?Amount=1&From=USD&To=ZWD
That is a fraction of what collectors have been paying forthese notes with numerous zeroes on them for years.
ZiG notes and coins are now issued in denominations made upof 1ZiG, 2ZiG, 5ZiG, 10ZiG, 20Zig, 50ZiG, 100ZiG, and 200ZiG which will bedistributed through the usual normal banking channels and, will be fullycovered by the quantity and value of gold and foreign currency held asreserves.The introduction of ZiG is an attempt to mitigate thecurrency instability and hyperinflation that has plagued the country fordecades.
Zimbabwe has historically suffered from excessive inflation,with rates topping 500% in recent years. In March 2024, the yearly rate ofprice rises was 55.3%, a seven-month high.
Many Zimbabweans value the security of the US dollar, whichaccounts for over 85% of transactions, according to the BBC.
For this reason, the central bank decided to use a combination of the ZiG and foreign currencies in a multi-currency system.
It remains to be seen if the new ZiG will earn public trustand become a stable local currency, allowing policymakers to restore control ofmonetary policy.
As of 5 April 2024, the Bank has reserve assets of USD 100million in cash and 2,522 kgs of gold (US$185 million) to back the entire localcurrency component of reserve money which currentlystands at ZW$2.6 trillion requiring full (100%) cover of gold and cash reservesamounting to US$90 million.
The gold and cash reserve holdings currently with the Bankrepresent more than 3 times cover of the local currency being issued
Again I ask – Might a ZIG Gold Backed Currency effectivelyde-couple Zimbabwe ZW$ dependency on / linkage to the US Petrodollar ?
BUT !!How many Gold Backed Currencies are there in the World ?
Can they be Successful ?
https://worldpopulationreview.com/country-rankings/what-countries-are-on-the-gold-standard-today
Britainterminated the gold standard in 1931, and the U.S. did the same in 1933.
In 1971, the U.S. fully severed the direct convertibility of dollars into gold.
In otherwords, no country backs its currency by gold.
The Gold Poolcollapsed in 1968 as member nations were reluctant to cooperate fully inmaintaining the market price at the U.S. price of gold.
In the following years, both Belgium and the Netherlands cashed in dollars for gold, with Germany and France expressing similar intentions.
In August of1971, Britain requested to be paid in gold, forcing Nixon's hand and officiallyclosing the gold window.
In 1971, theU.S. fully severed the direct convertibility of dollars into gold.
By 1976, itwas official; the dollar would no longer be defined by gold, thus markingthe end of any semblance of a gold standard.
In otherwords, no country backs its currency by gold ?
In 1979, thepound sterling became a free-floating currency.
That is, itsvalue was allowed to fluctuate with market supply and demand rather than beingfixed against the price of gold.
Today, theUK's pound is a soft currency.
It is a fiatcurrency whose value is determined by market demand.
https://bulawayo24.com/index-id-opinion-sc-columnist-byo-243313.html
Sorry about the formatting !! Copy and Paste into Word (if interested !!)
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