How to live in an economy with 200% interest rate? (opens in new tab)

(bloomberg.com)

4 pointsvijaypatil3y ago5 comments

5 comments

Hi, just read this article where official interest rate in 200% in Zimbabwe. How is this even feasible? Why this won’t happen in the western world? I wonder if anyone can help me understand.

PaulHoule3y ago

Zimbabwe for one thing has a less developed economy. It has no demand for it”s currency.

People hypothesize about the decline of the dollar but the question is, what replaces it? There are serious agency problem inside the Euro zone and who trusts China? There is nowhere near enough gold in the world to support a modern economy.

vijaypatilOP3y ago

Does the link to gold still hold true in todays world? There are much diverse asset classes available now and perhaps the root cause of inflationary economy is our inability to accommodate these.

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5 comments

haspoken3y ago

https://archive.ph/7bRYC

vijaypatilOP3y ago

Hi, just read this article where official interest rate in 200% in Zimbabwe. How is this even feasible? Why this won’t happen in the western world? I wonder if anyone can help me understand.

PaulHoule3y ago

Zimbabwe for one thing has a less developed economy. It has no demand for it”s currency.

vijaypatilOP3y ago

Does the link to gold still hold true in todays world? There are much diverse asset classes available now and perhaps the root cause of inflationary economy is our inability to accommodate these.

1 more reply

j / k navigate · click thread line to collapse