Zimbabwean Trillionnaire!

Mufti Menk


Channel: Mufti Menk

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The speaker discusses the history of Zimbabwe and how it has undergone a conflict with Britain over land and currency. They also talk about the economic crisis and how it has led to a rise in salaries and inflation, causing people to take out gold coins and devalued their currency. The speaker emphasizes the importance of proper devaluation and inflation management for sustainable solutions to the current currency crisis.

Transcript ©

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We're talking about wealth and you know, how much of how much has been generated. But going back to Zimbabwe, because that when I think Zimbabwe, everybody knows about the $1 trillion bill, I actually wanted to try to get hold of one, I have one, I have one in my bag if I had I know another.

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But it's just fascinating to kind of hear the story of how that all transpired and hyperinflation and how people, you know, I hear stories from family about had to carry bags of money to get just in bread or something like that. How was it you you because you were there at that time? Firstly, the biggest note we've ever gotten to is $100 trillion.

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And that $100 trillion is very interesting, because what happened is, Zimbabwe had a problem, the problem, the difficulty was a disagreement that they had with Britain regarding the land. And so Britain was supposed to return the land or pay for the land, you know, pay for the land that they had given their own people, when they came in, as colonialists, and so on. So the government says, Look, instead of getting the people out of the land, pay us for the land. And that's it. But unfortunately, they didn't end up paying whatever the political side of it was.

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But as a result of all that, there were sanctions against Zimbabwe because the government went out and started taking back this land to say, Listen, you guys didn't pay up, you got to vacate and so on. I'm trying to wait it simply. And the economic crisis resulted in the dollar the Zimbabwean dollar, which, by the way, was stronger than the pound in 1980. It was yeah, it was stronger than the pound in 1980. By the time the year 2000, came, it was started crashing, and freefall, freefall, meaning it was just because of sanctions, and because

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we found ourselves with no foreign currency reserves, and so on. So when it started crashing, things became very expensive. And every day people's

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salaries would increase, and the prices would increase. To the degree that

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there were so many zeros that the reserve bank governor decided that we're going to delete three zeros, they deleted three, they deleted another two they deleted, they ended up deleting 27 zeros over a period of a few years. So when we say 100 trillion, you can add another 27 zeros to that to get the exact figure of what it was. And it's true that we had, you know, wheelbarrows full of money just to go and get something basic.

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And now it's been replaced with, obviously plastic money. But the inflation has come back to us because every time they printed a new note, or they came up with a system, they pegged it one on one with the US dollar. In a short space of time, it actually became 100 200 300 500,000 2000 5000. And it was crazy. Crazy. So the only way of dealing with that would have been the gold coin, to go back to gold and silver. And to go back to the original there's there was no other way of dealing with it. And Zimbabwe is rich and gold.

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So on one hand, you have sanctions where you cannot use the banks.

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And the other hand, you have your rich and gold. And another hand this foreign currencies, they came a time when the government made an announcement to say you can use any currency you want, because just survive. So the Zimbabweans have been making a plan to survive from 1998 From 2000, approximately a plan to survive, you use whatever money you have for as long as two parties have agreed. The US Dollar was one the major currency and the RAND because that was readily available. And so there is the Rand is a South African currency. But unfortunately, the RAND fluctuates as well, a little bit. It's much more stable, but still, but the US Dollar was the currency where I

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remember the former president saying, Look,

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this was what he said, he says, well, they messed up with our currency, let's use their currency, they're not going to mess up with the SEC. So he started, we started using US dollars, but things started becoming more and more expensive. So the talk of the gold coin, we actually created the gold coin as legal tender in Zimbabwe. So the unfortunate thing is they mentored so many 1000 and so on, and they were very quickly, you know, like sort of used up and people and kept them because now that's something we're going to keep. So instead of using it and keeping going otherwise, we would have had a proper system that would have been the original Islamic system. And like I said earlier,

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the Islamic finance system is probably the only system that would bring about solution to all the fears of the fiat currency that we have today because it's on the brink of collapse according to the experts and I'm not one

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but I'm just repeating what they

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have set and

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to have proper if you if we all had little gold coins of different weights, right? Even the lightest one. So they that how it works is they mix it and it's mixed in a certain way so the value is less and if it's less mixed the values more and so on. So if we had to use those gold coins you have the real asset is in your pocket. Nobody can take it away from you. It's the real thing. The terms devaluation and inflation are two terms that should never be in Islamic finance. They would not be non existent. The reason is, there's no devaluation and no, you know, inflation in that sense more so devaluation you can't just come in today and say we devaluing this thing number divided by 10. I

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mean, come on. The gold coin is a gold coin. That's it. It's done.