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Bond issue is unneccessary if a Govt issues its own money to invest in its economic growth.
As stated earlier, Financiers invest in Govt Bonds, because they are a safe haven in times of Stock market turmoil. as a Govt cannot run out of money in its own Sovereign currency.
:oops:

As Zimbabwe's money runs out, so does Mugabe's power

By Ed Cropley| HARARE

In Zimbabwe, where worthless $100 trillion notes serve as reminders of the perils of hyperinflation, President Robert Mugabe is printing a new currency that jeopardizes not just the economy but his own long grip on power.

Six months ago, the 92-year-old announced plans to address chronic cash shortages by supplementing the dwindling U.S. dollars in circulation over the past seven years with 'bond notes', a quasi-currency expected at the end of November.

According to the Reserve Bank of Zimbabwe (RBZ), the bond notes will be officially interchangeable 1:1 with the U.S. dollar and should ease the cash crunch. The central bank also promised to keep a tight lid on issuance.

After a 2008 multi-billion percent inflationary meltdown caused by rampant money-printing, many Zimbabweans are skeptical. The plan has already caused a run on the banks as Zimbabweans empty their accounts of hard currency.

Internal intelligence briefings seen by Reuters raise the possibility that the bond notes, if they crash, could spell the end of Mugabe's 36 years in charge.

A Sept. 29 Central Intelligence Organisation (CIO) report revealed the powerful army was as unhappy as the rest of the population with the new notes and had told Africa's oldest leader to "wake up and smell the coffee".

"Top security officers have told Mugabe not to blame them if Rome starts to burn," the report said.

Reuters was unable to determine the author of the report. It is also unclear if Mugabe has seen the report, whose final audience is not specified. Mugabe's spokesman did not respond to requests for comment, nor was the CIO available.

But the report offers a rare glimpse into the thinking of Mugabe's security forces - the backbone of his power – and their concerns about the implosion of what used to be one of Africa's most promising economies.

"Mugabe was openly told that the bond notes are going to cause his downfall," the report said.

WAITING FOR THE DROP

The notes' first test will come in the informal foreign exchange markets on the streets of Harare.

If they fall heavily in value, they are likely to unleash an inflationary spiral that could bleed the banking system of its last few dollars and wipe out Zimbabweans' savings for the second time in less than a decade, economists say.

The same happened in 2008: powerful individuals with access to dollars at the official 1:1 rate were able to buy bond notes at a discount on the unofficial market and then convert them back to dollars at face value.

"You start with one dollar, then you've got 10, then you've got 100, then you've got 1,000 – and it's not even lunchtime," said John Robertson, one of Zimbabwe's most respected private economists.

In Harare's chaotic Road Port bus station, the main terminus for those heading to and from South Africa, Zimbabwe's biggest trading partner, some bus operators are fearing the worst.

Required to pay nearly all their expenses - fuel, road tolls and police bribes in Zimbabwe and South Africa - in hard currency cash, they are particularly exposed.

"It's like being on death row. You don't know when the hangman is going to open your cell door," said ticket-seller Simba Muchenje, pulling a wad of worthless 2008 Zimbabwe dollars from his briefcase and tossing them onto the counter.

"It's just taking us back to the bad old days."

In interviews, none of eight money-changers trading South African rand and U.S. dollars said they would accept bond notes at their $1 face value because of fears of immediate depreciation. The rand and the U.S. dollar have become Zimbabwe's currencies since the local dollar was scrapped in 2009

"The banks may say 1:1, but here we say 2:1. We can't afford to pay the same as the banks. I'm running a business, not a bank," said Patience, a 32-year-old money-changer.

REASSURING WORDS

Given Zimbabwe's recent history of hyperinflation, the RBZ is keen to allay fears the printing presses are about to go into overdrive, and that the bond notes are a roundabout route to a new Zimbabwe dollar.

"The introduction of bond notes does not mark the return of the Zimbabwe dollar through the back door," it said in a statement on its website.

Instead, the bank has presented the notes as a 5 percent "export incentive" - a top-up added by the central bank to the accounts of those receiving foreign exchange either from overseas remittances or via farming, manufacturing and mining exports.

They will also be backed by a $200 million "loan facility" from Afreximbank, a Cairo-based lender owned by the African Development Bank and dozens of African governments and central banks. Afreximbank declined to comment.

Given monthly exports of roughly $250 million, the 5 percent 'top-up' suggests a monthly liquidity injection of just $12.5 million, or $1 for every Zimbabwean.

In public statements, the RBZ has given assurances it will not exceed the $200 million issuance ceiling.

But it has not clarified how bond note balances will be recorded in U.S. dollar accounts, nor how ATMs will distinguish between greenbacks and bond notes when they issue cash.

"Upon withdrawal, banks have an option to pay in any one of the legal tenders," the RBZ said.

RBZ Governor John Mangudya missed a scheduled interview with Reuters and did not respond to emailed questions.
NO DOLLARS, NO FUN

Few Zimbabweans interviewed believed the RBZ would stick to the issuance limits, especially while a large current account deficit continues to suck dollars out of the country.

After the bond notes’ announcement, #ThisFlag and #Tajamuka, social media campaigns targeting the new system, drew the biggest anti-Mugabe protests in a decade before being crushed by riot police and the CIO.

Meanwhile, tens of thousands across the country lined up through the night to empty their accounts the moment their pay or pensions arrive, exacerbating the liquidity crunch. Banks have responded with daily withdrawal limits: $100 one day, $50 another, none another. Customers have no idea until the banks open their doors at 8 a.m.

"Sometimes you get to the end of the line and there's no money," said industrial fitter Edmund Panganai, 40, outside a CABS building society branch in Harare. Every month, it takes him at least seven nights of queuing to get his hands on his pay.

In Harare, where most U.S. dollar bills are stained deep brown with grime, a crisp 2009-edition $100 note is now worth as much as $115.

Conversely, the plastic and mobile money introduced to ease physical cash shortages is depreciating, forcing vendors to charge a 10-15 percent premium.

One prostitute, who had been relying on e-wallet payment systems such as Ecocash, run by mobile firm Econet Wireless (ECO.ZI), said she and other sex workers were turning away customers without hard cash.

"Ecocash? No thank you. Dollars, dollars, dollars," said Patience, a 22-year-old working a Harare street corner. "No dollars, no fun."
 
The Political systems of the West have been captured by the Banking system a long time ago. Govt tax the citizens to finance the State, but a large portion of the taxes are spent on Bond interest repayments which enrich the Financiers.
Bond issue is unneccessary if a Govt issues its own money to invest in its economic growth.
As stated earlier, Financiers invest in Govt Bonds, because they are a safe haven in times of Stock market turmoil. as a Govt cannot run out of money in its own Sovereign currency.
'Control oil supply and you control a Nation, control food and you control the people, control money and you control the World'. (Henry Kissinger/ David Rockfeller)
Look into the downfall of the Philips Curve in the mid seventies amid stagflation.

There's a reason why Keynes went out of fashion, his theories don't tell the full story.

On the other hand, the current state of affairs is also thoroughly debunking monetarism. Poor John Taylor is about to explode at this stage in his attempts to crowbar the previously sacrosanct Taylor Rule.

This stuff is complex, saying simply that bond issuance is unnecessary is ignoring why we issue bonds and why there is independence of central banks. We have tried the alternative and in most cases, it doesn't work very well.
 
Look into the downfall of the Philips Curve in the mid seventies amid stagflation.

There's a reason why Keynes went out of fashion, his theories don't tell the full story.

On the other hand, the current state of affairs is also thoroughly debunking monetarism. Poor John Taylor is about to explode at this stage in his attempts to crowbar the previously sacrosanct Taylor Rule.

This stuff is complex, saying simply that bond issuance is unnecessary is ignoring why we issue bonds and why there is independence of central banks. We have tried the alternative and in most cases, it doesn't work very well.

Just noticed how you voted HBB, why would you be against Scottish independence, in principal like?
 
Just noticed how you voted HBB, why would you be against Scottish independence, in principal like?

No. I'm sure Scotland would be just fine as an independent country and with its own culture, legal, health, education and government system already, it's a lot of the way there already

But getting from here to there would be an unmitigated disaster. That is now doubly true in the wake of Brexit. The fallout would be messy as fuck, throwing up the status of Northern Ireland and Wales.

The latter would be a horrible mess to disentangle from England, as really, Wales is govermentally ally an appendage of England.

And what would it change?
Not a great deal IMO.

So if divorce was easy, I could get behind Scotland leaving the UK, the benefits from a potentially catastrophic separation process just are not there in my mind. It works OK, leave it alone, we have bigger things to worry about.
 
Why do the conservatives want to keep Scotland in the UK when an independent Scotland would guarantee them a majority for at least 50 years the way the labour party is now.
anyone know of 3 good reasons why England need Scotland.
 
Why do the conservatives want to keep Scotland in the UK when an independent Scotland would guarantee them a majority for at least 50 years the way the labour party is now.
anyone know of 3 good reasons why England need Scotland.

1. It would mess up the Flag.
2. It'd cost a fortune in new maps.
3. They'd finally have to do something about the whole UK/GB terminology. Obviously, UKer or UKish are not adequate replacements for British.
 
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