1)On @UN World Day Against Drowning it is clear that Mr Mnangwagwa & his Central Bank Governor Panonetsa John Mangudhla remain resolute in their quest to see Zim totally drown Today s launch of their gold coin is a case in point.
2)Like everything else they touch the gold coin will fail .Like everything they pursue coin will be an instrument of arbitrage &extraction .For starters it will not control or restrain inflation, exchange rate collapse or money supply.Broad money needs to be controlled at source
3)The source is of course the Central Bank itself whose appetite for quasi fiscal activities is unprecedented. It’s foreign auction system creates millions of US$ that are fueling the parallel market weekly. It’s Treasury Bills ,it’s retention of Export Surrender Requirements ..
4)..it’s external sovereign debt ( particularly its exposure to @afreximbank ), its overdraft to the Central Gvt are all creating money.Month on month growth in broad money since April has been 33% whilst for the year ending May 2022 it grew by 245%.The printing press is busy
6) Beyond the Bank s criminal omissions,has been Treasury’s irresponsible&corrupt expansionary fiscal policy.Despite the facade of “surplus” Mthuli has been spending money as if it grows on trees .In 2019 he spend US$6.9 beyond Parliament s Budget In 2020 he spent ZWL$102 billion
7) The 2021 Audit is not out but truth is deficit will be worse than previous years . In real terms since assuming office in Sept 2018 Mthuli has a run deficits which were at least 25% of GDP. So in fact “Mr Surplus” is in fact “Mr Deficit” & only this week he will bring …
8)…..a Supplementary Budget confirming gross over expenditure in first half of the year. The gold coin therefore can not stem the money creation caprice of the regime . Rather it will exarcabate the problem .It’s US$ price is US$1 823.80 or ZWL$805745.35 underpins the challenge
9)Selling the coin in local currency at an exchange rate that is almost 50 % parallel rate simply means that cartels have a new source of arbitrage.The gold coin,just like the auction will be a target by ZANU cartels&mafia Like the auction ,the coin will lead to money creation
10) Rather than address inflation the coin will thus be driver of inflation. Further it will be a key tool of money laundering . Zim is already a big washing machine with international criminals smuggling US$ into Zim then used to purchase gold which is then exported .
11) The coin is thus chlorinating billions of dirty money out in Middle East&Asia desperate for legitimacyTo the majority of Zimbabweans ,95% of whom are unemployed & many earning less thanUS$100 in RTGS$ anyway , the coin is a mirage . A gimmick created to steal their wealth
12) The gold coin ultimately is an act of desperation.A country without any reserves & with a tattered currency can’t sell its gold .But there is logic in the madness .That logic is corruption ,self enrichment ,greed & caprice . That regrettably is the DNA of this regime #SHAME
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