Zimbabwenomics Pioneers Even Freer Trade

by Johnny Debacle

Zimbabwe continues to get it. When facing simple, but large, macro problems, the country shines like no other. The biggest problem with with supply and demand is that sometimes the demand cannot afford the supply. Zimbabwenomical solution? Enact policies consistent with Mugabe Efficiency Theory which lower the price of supply to make it affordable. The country is faced with rampant poverty and lack of wealth. Zimbabwenomical solution? Mugabe has taken it upon himself to make the entire country full of millionaires, an unprecedented accomplishment, not only in Africa but in the whole world. From a CNN article on the Zimbabwean dollar

Money traders in [the] African country say the Zimbabwe currency has [surged] to a record [of] 25 million for a single U.S. dollar.

It’s a race between the US and Zimbabwe, one the latter is clearly, and as a US citizen disappointingly, winning.

Later in the same piece we spotted evidence of another advance in the field of Zimbabwenomics:

[The] regional breadbasket [imports] canned and processed foods, household goods, soap, toothpaste, toiletries and other items [from] neighbors Malawi, South Africa and Zambia and from as far afield as Egypt, Germany, Iran and Malaysia.

Zimbabwe is not only reaping the benefits of trade by engaging in a diverse set of trading partners, but it’s taken a figment of its own imagination, and profited from it, by trading with a fictional country in Malawi. Zimbabwe’s move is particularly bold in that Malawi doesn’t even sound like a real country, more like someone with an oversized tongue trying to say “mara, way!”. The key benefit to trading with a fictional country is that you control the terms and have all the leverage because, in order to continue to exist, they are dependent on you believing that they exist. This is why the US is able to extract such generous terms in its trade with Canada.

Recommendation: Zimbabwe is on the very cutting edge of progressive thinking; we would buy the whole country if we could. Actually, according to our trader, apparently we now can. Amazing.

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POSTED: 03/6/08 9:46 AM
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