A Counterintuitive Convert: Gold Standard Supported By Governor Of Central Bak Of Zimbabwe

Yes, Zimbabwe: the same country whose name is synonymous with hyperinflation in our times. The Zimbabwean central bank ended up destroying the currency outright; the U.S. dollar became the de facto money in the country.

Now, in part because of worries about the greenback, the central bank's Governor, Dr. Gideon Gono, is arguing for a new Zimbabwean currency backed by gold.

“There is a need for us to begin thinking seriously and urgently about introducing a Gold-backed Zimbabwe currency which will not only stable but internationally acceptable,” he said in an interview with state media.

“We need to re-think our gold-mining strategy, our gold-liberalisation and marketing strategies as a country. The world needs to and will most certainly move to a gold standard and Zimbabwe must lead the way.”

Gono said the inflationary effects of United States’ deficit financing of its budget was likely to impact other countries to leading to a resistance of the green back as a base currency.

“The events of the 2008 Global Financial Crisis demand a new approach to self reliance and a stable mineral-backed currency and to me, Gold has proven over the years that it is a stable and most desired precious metal,” Gono said.

“Zimbabwe is sitting on trillions worth of gold-reserves and it is time we start thinking outside the box, for our survival and prosperity.”

Granted that it's easy to scoff at this proposal, as many commenters did over at the Free Republic, but there's a good reason why the gold standard would be a good fit for Zimbabwe. Zimbabweans, including the authorities, have learned the dangers of fiat money the hard way. Offtimes, we don't mend our ways until we've hit a real low.