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Moderator
 United States
188952 Posts |
I am sure a lot of those dust-accumulating baby dollars will make their way over there.
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Bedrock of the Community
United States
17884 Posts |
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we have plenty of dollar coins if they want those. Why not, we've been sending them to Ecuador for years. |
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Valued Member
United States
91 Posts |
I've always wanted one of their $100,000,000,000,000 bills, maybe some sort of exchange agreement can be reached...
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Valued Member
Guatemala
357 Posts |
I've got a few of the $100 trillion notes. They're pretty funny, actually.
With regards to the coinage, I remember reading ages ago that to avoid running out of denominations due to hoarding, it's necessary to 'budget' something like 2 lbs. of mixed coins for every man, woman and child in the U.S. Now, even if you reduce that somewhat, the population of Zimbabwe is still 12.5 million. That's a lot of coins.
Also, I don't think the baby dollars will head that direction. In my experience, in Central America, even in dollarized countries like El Salvador and Panama, you don't see dollar coins at all. In Panama, you see some circulation of U.S. coins, but it's infrequent. In El Salvador, I've never seen U.S. coins outside of tourist oriented businesses. I know in Guatemala, the banks won't touch U.S. coins, period.
edit: I should acknowledge though, that the baby dollars are popular in Ecuador.
Edited by JMerrick
02/23/2011 8:45 pm
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Rest in Peace
United States
9104 Posts |
I don't see many people griping about brass bucks, but they don't like S B Anthonies. Since they don't have other coins to confuse with, we could send those.
They have to do something about runaway inflation, which so far has been to use rands as the currency of account.
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Valued Member
United States
307 Posts |
Very interesting  Wonder what effect that may have on our surplus coins at the mint (Federal Reserve)?  |
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Valued Member
United States
320 Posts |
what I want to know is, if we send them a couple million dollars in coins, what will they send us?
-How much for this Susan B?
-A hundred trillion Zimbabwe dollars.
-Nah, at that price I'll keep it. Maybe buy a bag of chips.
In all seriousness, though, what could we (IE the US) get in return?
On the subject of Zimbabwe dollars, I have a hundred trillion dollar bill too...it's interesting to say the least. All those zeroes! People who don't know the situation there automatically assume it's fake or novelty money.
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Valued Member
Guatemala
357 Posts |
Zimbabwe actually uses a currency basket approach where sterling, dollars, euros and rand are in use side by side.
By dollarizing (or poundizing, euroizing, etc.), you are actually holding the government more accountable on the world banking radar. Zimbabwe, like a lot of other countries, got away with "Gee, we're sorry, we can't meet our financial obligations because all we have are these ZimDollars that our own people use as toilet tissue." By being 'dollarized', it makes it much easier for the IMF and foreign banks to insist upon repayment of Zimbabwe's obligations.
Actually dollarizing the coinage though, is a very significant step. It's very rarely done. It's a very good hint that there are no plans to resurrect the ZimDollar.
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Pillar of the Community
United States
7629 Posts |
I read through this thread and honestly don't get it. makes me feel kinda dumb. Just why - with our own monetary problems - would we want to give money to them?
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Moderator
Australia
16842 Posts |
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what I want to know is, if we send them a couple million dollars in coins, what will they send us?
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Just why - with our own monetary problems - would we want to give money to them? It's not "free money" - they're "buying" it for face value, using US notes (or other foreign money) they already own in exchange for coins and exchanging old worn-out notes for new ones. The Zimbabwean government and banks are sharing the cost of shipping. Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis
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Bedrock of the Community
Australia
21788 Posts |
Supplying a couple of hundred tons of clad coins is really a minuscule charitable gift to Zimbabwe. That's less than $2 million metal value in foreign aid.
200 tons of clad coins works out to about 3 to 4 billion coins. More than enough for the needs of the Zimbabwe population.
I don't think that this has much to do with 'dollarising' their national debt. The value of the proposed coins in circulating currency would be negligible to their national debt.
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Pillar of the Community
United States
3592 Posts |
I'm with coppercoins on this....we cannot afford to give away even $10 given our debt situation...period.
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Pillar of the Community
United States
3294 Posts |
Maybe they will give us something in exchange. Do they have gold, oil or diamonds?
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Moderator
Australia
16842 Posts |
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Do they have gold, oil or diamonds? They have diamonds, and they also have platinum - which is where all the US currency they're currently using has come from. They're the fourth largest producer of platinum after South Africa, Russia and Canada. They also have one of the most fertile and productive agricultural regions in Africa, but thanks to Mugabe's "land reforms", Zimbabwe is now a net importer of food. Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis
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Valued Member
Guatemala
357 Posts |
sel_691 brings up two points,
All swapping their currency for a hard currency does is force them into a situation where they cannot keep making excuses for reneging on foreign obligations.
Second, in today's world of global fiat currencies, the simple step of dollarizing a nations paper currency really isn't a major deal. On the other hand, to forgo the right to mint a nations own coinage is a really major move. The minting of coins is a basic litmus test of sovereignty.
What do we, the 'western' world get from currency dollarization? Well, they might eventually pay their outstanding bills, for a change. So, that's a good thing.
The coins are a different story. That can go two very different ways in the short term. Either they pay 'COP' (cost of production) for the coins, or they pay 'par', the actual cash value for the coins. Depending on the breakdown of what they get, each has it's issues. Since there is no mention of 'seigniorage', there doesn't appear to be a buffer against the pitfalls of either approach.
The long term effect wouldn't seem to be very good. Countries that don't issue their own coins generally don't exist on a long term basis. It's a fairly safe bet that any move to reform the Zimbabwean economy is guaranteed by the natural resources. However, since long-term exploitation of those resources by the ruling class is one of the reasons that Zimbabwe is a mess today, (along with Mugabe's absolute ineptitude and greed), further exploitation on a global basis would appear to not help the Zimbabwe situation in either the short term or the long term.
Edited by JMerrick
02/24/2011 11:38 am
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Posted 02/23/2011 6:43 pm
