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1. Printing money
There is nothing wrong about @ReserveBankZIM printing money. The problem is: what& #39;s done with the printed money? Where does it go? How is it distributed?
If the money is channeled to productive consumption, it is not problematic.
I explain!
There is nothing wrong about @ReserveBankZIM printing money. The problem is: what& #39;s done with the printed money? Where does it go? How is it distributed?
If the money is channeled to productive consumption, it is not problematic.
I explain!
2. Printing money
If govt through @ReserveBankZIM prints money & use it in funding a road project, jobs will be created directly & indirectly. In fact, a long supply chain is activated
This money "stimulates" production in the economy, Americans talk of a "stimulus package"
If govt through @ReserveBankZIM prints money & use it in funding a road project, jobs will be created directly & indirectly. In fact, a long supply chain is activated
This money "stimulates" production in the economy, Americans talk of a "stimulus package"
3. Printing money: The Zimbabwe problem
The money printed in Zimbabwe cause hyperinflation & currency devaluation because it& #39;s channelled towards unproductive consumption & speculative activities in the money market
The printed money doesn& #39;t stimulate production in the Economy
The money printed in Zimbabwe cause hyperinflation & currency devaluation because it& #39;s channelled towards unproductive consumption & speculative activities in the money market
The printed money doesn& #39;t stimulate production in the Economy
4. Printing money: Gono& #39;s mess!
Former RBZ Governor, Gideon Gono destroyed Zim Dollar by printing money for unproductive consumption.
He printed money, bought forex & imported tractors & groceries (Bacossi). The exchange rate spiked as he flooded the market with Zim$.
Former RBZ Governor, Gideon Gono destroyed Zim Dollar by printing money for unproductive consumption.
He printed money, bought forex & imported tractors & groceries (Bacossi). The exchange rate spiked as he flooded the market with Zim$.
5. Gono& #39;s mess!
The money printed by Gono stimulated production in South Africa where he bought the Bacossi groceries.
The tractors he imported were given to non-productive farmers to rot.
No "stimulation" of the Zim economy occurred, rendering the printed money worthless!
The money printed by Gono stimulated production in South Africa where he bought the Bacossi groceries.
The tractors he imported were given to non-productive farmers to rot.
No "stimulation" of the Zim economy occurred, rendering the printed money worthless!
6. Printing money: @MthuliNcube /Mangudya& #39;s mess
The current govt is also printing money in large quantities. It& #39;s causing inflation but not as bad as Gono& #39;s mess because it& #39;s partially stimulating local production & it& #39;s not at a very large scale
It& #39;s causing havoc nonetheless
The current govt is also printing money in large quantities. It& #39;s causing inflation but not as bad as Gono& #39;s mess because it& #39;s partially stimulating local production & it& #39;s not at a very large scale
It& #39;s causing havoc nonetheless
7. Printing money: Mthuli& #39;s mess
The money printed in Zim at the moment is causing hyperinflation because it& #39;s poorly distributed
The printed money ends in the hands of a few people who take it to the forex black market & causing massive spikes in the exchange rate
The money printed in Zim at the moment is causing hyperinflation because it& #39;s poorly distributed
The printed money ends in the hands of a few people who take it to the forex black market & causing massive spikes in the exchange rate
8. Printing money: Mthuli& #39;s mess
The main culprit is the inefficient subsidies.
The subsidy money is going to a few companies. These companies make even more money by diverting the subsidized goods to the black market.
These are the forex black market troublemakers
The main culprit is the inefficient subsidies.
The subsidy money is going to a few companies. These companies make even more money by diverting the subsidized goods to the black market.
These are the forex black market troublemakers
9. Printing money: Mthuli& #39;s mess
The exchange rate in Zimbabwe doesn& #39;t make sense to the ordinary citizen because he/she doesn& #39;t have enough Zim$ to afford such a high exchange rate.
The average citizen ain& #39;t the problem. It is the big companies with their huge Zim$ deposits
The exchange rate in Zimbabwe doesn& #39;t make sense to the ordinary citizen because he/she doesn& #39;t have enough Zim$ to afford such a high exchange rate.
The average citizen ain& #39;t the problem. It is the big companies with their huge Zim$ deposits
10. Printing money: The right way!
Due to drought & other natural disasters, it is good & important for govt to provide assistance to vulnerable citizens.
The assistance can be taken from tax revenue or can be from "printed money"
But then, the subsidy model matters!!!
Due to drought & other natural disasters, it is good & important for govt to provide assistance to vulnerable citizens.
The assistance can be taken from tax revenue or can be from "printed money"
But then, the subsidy model matters!!!
11. Distributing printed money
Instead of using the current inefficient subsidy model (of pouring money to a few companies), govt can spread money in the economy by making direct cash payments to citizens.
Currently, American govt is sending cheques directly to citizens
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👌" title="Ok hand" aria-label="Emoji: Ok hand">https://abs.twimg.com/emoji/v2/... draggable="false" alt="👌" title="Ok hand" aria-label="Emoji: Ok hand">
Instead of using the current inefficient subsidy model (of pouring money to a few companies), govt can spread money in the economy by making direct cash payments to citizens.
Currently, American govt is sending cheques directly to citizens
12. Distributing printed money
Direct cash payments to citizens are possible these days because of electronic banking & mobile money platforms. It& #39;s easy & efficient. No market distortion is created. It can be audited & monitored. It can be directed at the VULNERABLE!
Direct cash payments to citizens are possible these days because of electronic banking & mobile money platforms. It& #39;s easy & efficient. No market distortion is created. It can be audited & monitored. It can be directed at the VULNERABLE!
13. Subsidy inefficiency
Subsidies must be targeted at the vulnerable people (old, disabled, poor, orphans etc). There is no reason why a rich person has to get access to subsidized goods.
The current model actually benefits the rich & well connected. It& #39;s a bad policy/model!
Subsidies must be targeted at the vulnerable people (old, disabled, poor, orphans etc). There is no reason why a rich person has to get access to subsidized goods.
The current model actually benefits the rich & well connected. It& #39;s a bad policy/model!
14. Distributing printed money
Another efficient model is to use printed money to fund capital projects (build roads/bridges/schools etc)
The printed money stimulates production in the economy & distributes the money in the population via salaries/wages. This is a good model
Another efficient model is to use printed money to fund capital projects (build roads/bridges/schools etc)
The printed money stimulates production in the economy & distributes the money in the population via salaries/wages. This is a good model
15. Distributing printed money
Food for work:https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇿🇼" title="Flag of Zimbabwe" aria-label="Emoji: Flag of Zimbabwe">https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇿🇼" title="Flag of Zimbabwe" aria-label="Emoji: Flag of Zimbabwe">
In the early 1990s, there was a devastating drought in Zimbabwe.
In order to help citizens, govt launched a food for work program.
Citizens would do actual/important work & get paid. This was a very efficient model. It worked!
Food for work:
In the early 1990s, there was a devastating drought in Zimbabwe.
In order to help citizens, govt launched a food for work program.
Citizens would do actual/important work & get paid. This was a very efficient model. It worked!
16. So why keep the rotten subsidy model?
The IMF team gave us a good answer: Vested interests
This happens when some govt officials or their friends are benefiting from the inefficient schemes. They resist good advice & embrace shitty policies!
The IMF team gave us a good answer: Vested interests
This happens when some govt officials or their friends are benefiting from the inefficient schemes. They resist good advice & embrace shitty policies!
17. Why keep the rotten subsidy?
It can be pure incompetence & laziness from the @ZimTreasury team & the Social Welfare ministry @OMpslsw
They need a database & a payment scheme to execute the direct cash payments.
In their laziness, they go the bad policy...
It can be pure incompetence & laziness from the @ZimTreasury team & the Social Welfare ministry @OMpslsw
They need a database & a payment scheme to execute the direct cash payments.
In their laziness, they go the bad policy...
18. Epilogue
The Zimbabwean govt has to be serious about stabilizing the currency & slowing down inflation
The solution is to STOP policies that drive inflation. This talk of "businesses wantonly hiking prices" is pure nonsense. The businesses react to market conditions.
The Zimbabwean govt has to be serious about stabilizing the currency & slowing down inflation
The solution is to STOP policies that drive inflation. This talk of "businesses wantonly hiking prices" is pure nonsense. The businesses react to market conditions.
19. Epilogue...
The govt of Zimbabwe can bring sanity into the market by removing itself & it& #39;s destabilizing activities in the market
Allow the market to operate efficiently without distortions created by the govt itself
Fully liberalize the formal forex market!!!!
The govt of Zimbabwe can bring sanity into the market by removing itself & it& #39;s destabilizing activities in the market
Allow the market to operate efficiently without distortions created by the govt itself
Fully liberalize the formal forex market!!!!
20.... Epilogue...
Good policies are good for us all... Politicians & their business friends will actually thrive more in a well functional Zim economy...
Currently, Zim MPs earn $7 700, that& #39;s about R4 000https://abs.twimg.com/emoji/v2/... draggable="false" alt="😢" title="Crying face" aria-label="Emoji: Crying face">https://abs.twimg.com/emoji/v2/... draggable="false" alt="😢" title="Crying face" aria-label="Emoji: Crying face">. Why impoverish yourselves with shitty policies?? Really???
Good policies are good for us all... Politicians & their business friends will actually thrive more in a well functional Zim economy...
Currently, Zim MPs earn $7 700, that& #39;s about R4 000
21. Epilogue
@ZANUPF_Official @zanupf_patriots must have a thorough introspection of their economic model
Communism failed. Worst, it made the elite rich & impoverished masses, at best it impoverished everyone
We must adopt economic models that work, it& #39;s 2020 for God& #39;s sake!
@ZANUPF_Official @zanupf_patriots must have a thorough introspection of their economic model
Communism failed. Worst, it made the elite rich & impoverished masses, at best it impoverished everyone
We must adopt economic models that work, it& #39;s 2020 for God& #39;s sake!
22. Epilogue...
The Bacossi policies failed... We all saw them failing... & in 2008, Zanu Pf got a shellacking in the election because of the failed Bacossi policies... If @ZANUPF_Official doesn& #39;t stop the shitty policies, 2023 will be traumatizing for them...
The Bacossi policies failed... We all saw them failing... & in 2008, Zanu Pf got a shellacking in the election because of the failed Bacossi policies... If @ZANUPF_Official doesn& #39;t stop the shitty policies, 2023 will be traumatizing for them...
23.... I want Zimbabwe to succeed... We have the ability to stop this self defeating approach...
Good policies are good for everyone.
Bad policies are bad for everyone.
Asante
Good policies are good for everyone.
Bad policies are bad for everyone.
Asante
