“Cult central banker” (to borrow Zero Hedge’s entertaining description) Gideon Gono is cooling on the dollar. New Zimbabwe reports:
RESERVE Bank governor Gideon Gono has warned that Zimbabwe’s nascent economic recovery is at the mercy of the United States dollar, which is facing new pressures from the Euro-zone debt crisis. Gono says Zimbabwe should in fact be looking to the Chinese yuan as its main currency, while urgently seeking to restore its own currency which was abandoned in 2009 after a dramatic loss of its value.
Speaking in Gweru last Saturday, Gono said: “The extraordinary happenings in Europe where economic power houses in the Euro-zone have been hit by a debt crisis deserves extraordinary measures, especially here in Zimbabwe where we have adopted the U dollar as the major currency in our multi-currency regime.”With the continuous firming of the Chinese yuan, the US dollar is fast ceasing to be the world’s reserve currency and the Euro-Zone debt crisis has made things even worse. As a country, we still have the opportunity to avoid being caught napping by adopting the Chinese yuan as part of consolidating the country’s look East policy.”
China is now Zimbabwe’s biggest trading partner, with the Asian giant absorbing most of the country’s mineral and agricultural produce.Vice President Joice Mujuru first raised the possibility of adopting the yuan in September last year, saying it would be a “logical step” and could help solve some of the country’s liquidity constraints.The multiple currency regime announced in January 2009 has been fraught with difficulties. Retailers are supposed to accept the Euro and the British pound but those two currencies have never caught on, with most transactions being conducted in United States dollars, the South African rand and the Botswana pula.
Yes, yes, I know that geography has something to do with it, but I’ll admit that the thought of the euro being outranked by the Botswana pula is good for a laugh or two
Zero Hedge adds a little more of its trademark foreboding to the story:
So all sarcasm aside, perhaps someone should be concerned that while the US is enjoying the third year of endless political bickering and deciding if this political candidate or that has had enough illicit sex, while rapidly losing all foreign influence, China is quietly but forcefully taking over the world precisely in the way that the US did in the 20th century: by becoming a primary trading partner, regionalizing its currency, and finally, a step that yet to occur, establishing CNY-denominated debt.
Does anyone still doubt what the endgame is?