Monday, April 30, 2018

Gideon Gono: Why I Created Hyperinflation in Zimbabwe

The former Reserve Bank governor  of Zimbabwe, probably the worst central banker of the 20th century, Gideon Gono is talking.

He  says he was forced to print money even when he knew it would cause hyperinflation because the government was desperate to forestall a coup by hungry soldiers.

Gono, who retired in 2013, told the Mashonaland West Business Conference in Chinhoyi, Zimbabwe last week that cash was used to pacify the troops.

"If we had not done what we did printing money and allowing inflation to skyrocket, then the men and women you see in those beautiful uniforms, they were ready to get out of their barracks," he said.

"I had the privilege to visit each and every barrack in this country to come face-to-face with hunger, hunger that was affecting men and women who have nothing else but their AKs; men and women who, if we did not do what we did, could have been tempted to get out and look for some food by whatever means."

Gono said he never had the resources to do his job during his tumultuous tenure at the central bank.

"I was given a car, which did not have fuel and expected to get to a certain destination. You drive on empty. ours was not an ordinary situation, ours couldn't be compared to any other country or any other situation," he said.

Gono said most of the time they could not tell Zimbabweans the truth that the country had no fuel or medicines fearing unrest.

The lesson here, of course, is the object lesson that government officials will lie to the people and take desperate measures to stay in power.

The plan shouldn't have been to print more money and destroy the structure of the Zimbabwe government but to shrink government and allow the private sector to grow. But those desperate to stay in power don't think that way.

-Robert Wenzel  

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