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Zimbabwe Daily — Debt-to-GDP ratio to exceed 100%

Summary:
Zimbabwe nothing like the US currency-wise. The US is sovereign in its currency while Zimbabwe is not. Government is expected to fund its debt by “printing money”, issuance of Treasury Bills or increasing the central bank overdraft facility which are the main ways it has used in the past. However, American financial and economic literacy website, Investopedia, warns against this for countries that do not control their own monetary policy such is the case locally as government controls have caused the markets to run amok. “Economists, who adhere to modern monetary theory (MMT) argue that sovereign nations capable of printing their own money cannot ever go bankrupt, because they can simply produce more fiat currency to service debts. However, this rule does not apply to countries that

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Zimbabwe nothing like the US currency-wise. The US is sovereign in its currency while Zimbabwe is not.
Government is expected to fund its debt by “printing money”, issuance of Treasury Bills or increasing the central bank overdraft facility which are the main ways it has used in the past.
However, American financial and economic literacy website, Investopedia, warns against this for countries that do not control their own monetary policy such is the case locally as government controls have caused the markets to run amok.
“Economists, who adhere to modern monetary theory (MMT) argue that sovereign nations capable of printing their own money cannot ever go bankrupt, because they can simply produce more fiat currency to service debts. However, this rule does not apply to countries that do not control their own monetary policies,” Investopedia said.
Government hopes by fixing the exchange rate at the current US$1:$25, this may allow for cheaper borrowing. But, as the Zimdollar continues its freefall which has already forced the government to bring back the greenback, the benefits of a fixed exchange rate may not be realised....
The Zimbabwe Daily
Debt-to-GDP ratio to exceed 100%
TATIRA ZWINOIRA
Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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