Mover Mike

Zimbabwe, formerly Rhodesia, is literally falling apart. When a nation is unraveling, you can see it in the path of that nation's currency. Zimbabwe's currency, which traded on the black market at 120 to the dollar in April 2002, went for 6,200 to the dollar last December, 12,000 on April 1, and 17,000 in early May. By mid-May a single US dollar bought at much as 25,000 Zimbabwe dollars, although the rate has now leveled off to 20,000. All the while the government insisted that the "official rate" was 6,100 Zimbabwe dollars to one US dollar. But last Thursday the government announced a devaluation to the new "official rate" of 9,000 Zimbabwe dollars to one US dollar. The new official rate is not expected to last very long. Of course, one problem is that the Zimbabwe dollar is not a reserve currency, which means that the government can't pay off its debts in trash Zimbabwe dollars. In that, sadly, the Zimbabwe government lacks the US government's ability to pay off its debts in trash US dollars.