Gasoline as Money in Zimbabwe
By David J. Theroux • Sunday August 10, 2008 1:23 PM PDT • 9 Comments
Prohibited from using U.S. dollars or other currencies in the midst of hyperinflation, the people of Zimbabwe have now turned to using gasoline coupons for money—anything but the Zimbabwean dollar. The result is that people transact in liters of gasoline, with the coupons as the currency.
Zimbabweans face acute shortages of local currency. Already gas coupons can be used to pay some household accounts. Many businesses also pay workers part of their earnings in scarce foodstuffs, or demand dollars for purchases, which is illegal.
“Where coupons become a currency, it reflects the rapidly falling value of the Zimbabwe dollar. Barter selling provides something that holds its value,” said John Robertson, an independent economist in Harare, the capital.
Other forms of barter are also common, including foodstuffs, and “obsolete” coins:
Obsolete coins also have been revalued, sending Zimbabweans hunting for coins they squirreled away in recent years.
And:
Embattled restaurants were offering discounts of up to 80 percent for either U.S. dollars or local cash because of shortages of both. They also added a penalty fee of up to 80 percent on top of the bill for those who paid by check, estimating price rises in the five days it takes a check to clear.
Businesses reported a slight upturn in transactions since Friday, despite the money crisis.
Since the new money came out, it already has fallen in value against hard currencies by about 20 percent. “The petrol coupon has a more stable value and barter works,” Robertson said.
Our new book by George Selgin, Good Money, explains how legalizing private, competitive currencies is the solution.
Tags: Africa, Economics, Energy, Money and Banking 
Good article/warning...
but this could NEVER happen here in freemarket and goldbacked currency democracy United States...
could it ;-)
The Government’s Federal Reserve has a lot of college graduates and experts running its printing presses...they should know what to do and how fast to print the interest bearing notes that help finance the marketplace...
Now if the people would trust the government even more and stop complaining and worrying about a $10.2 TRILLION US debt and 4K collateral damaged US servicemen and the installing of the NSA/FEMA security apparatus on America, things would not be so bad and ominous...
Chris Bieber | Aug 11, 2008 | Reply
I’ll bet my silver “rounds” would be good as gold in Zimbabwe. Pun intended
daddysteve | Aug 17, 2008 | Reply
Not quite true. Hyperinflation is caused when a currency and its issuing authority lacks confidence. That is almost impossible in the US, being a major power and almost everyone recognizes the government as legitimate.
Roger | Aug 11, 2009 | Reply
Roger,
If we look at the list of countries that have experienced hyperinflation, it becomes clear that all that is needed is a central bank with the discretionary powers to greatly expand the money supply coupled with the political pressures to do so. When the mounting debt creates a major crisis, monetization is then pursued and hyperinflation results.
With the gigantic expansion of the money supply by the Fed in the past year, we have the makings of a repeat of this classic scenario, unless major changes are taken and soon.
David Theroux | Aug 11, 2009 | Reply