Busted: Bankers and The Global Economy

July 31, 2008

Creation of Wheelbarrow Money

Wheelbarrow money isn’t just a figment of the past or in the annals of German history. It is real and today, just not in the United States. On the other hand, the little nation of Zimbabwe is reorganizing its money in an attempt to meet its outrageous 2,200,000% inflation rate. Obviously, the crazy percentage relates to older and better times.

Last week Zimbabwe released $100 billion notes in a meager attempt to fight the inflationary wheelbarrow syndrome. The day the new banknote hit the streets wasn’t enough to buy a loaf of bread. Today, the new bank note won’t cover that. Inflation has already eroded the value. Now a loaf of bread is $200 billion and if a Zimbabwe citizens longs for a can of Coke, that is a mere $600 billion. Zimbabwe is cutting ten zeros from its currency making $10 billion a revalued one dollar. In headier times, Zimbabwe was the toast of the third-world town.

The problem isn’t over. Inflation is so rampant, monetary units are expected to change again in the near future. Interestingly, just six months ago, this writer heard comparisons of Zimbabwe’s central banking policy to Ben Bernanke’s Federal Reserve of U.S. origin. Naturally, there are plenty of differences, notably that Zimbabwe is certainly not America. The overspending habits, however, are very much alike.

What the pundits say, there are similarities and the fact remains that no single economy is immune from inflation, especially when money policy and overspending is largely ignored. Could it be possible that a wheelbarrow of dollars could be required to buy a loaf of bread? It happened in Germany and if we keep ignoring common sense, nothing is impossible. Taking wealth for granted through fraudulent spending is a dangerous policy.

Debt, like the U.S. national debt, doesn’t go away, unless of course, the United Nations collects donations from larger economies to make that happen. Strangely, while this plan is part of U.N. policy creativity and wishful thinking, the reality is another thing altogether. Whether wealth redistribution plans of the U.N. actually work in 2015 or in 2030, U.N. plans aren’t really about building local economies, but about global empowerment. It isn’t happening for Zimbabwe and the outlook isn’t good for the U.S. either where runaway spending is concerned. Bailing out the world and supporting global governance is part of the reason why the United States national debt is where it is today.

Remember that the current nation of Zimbabwe isn’t promised tomorrow. The United States shouldn’t take the future for granted either. ~ E. Manning

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