Zimbabwe could be retracing road to hyperinflation

zimbabwe-bond-notes

Zimbabwe introduced a new currency Monday, but citizens of the foundering African nation aren’t exactly embracing the so-called “bond note” money.

Zimbabwe has been operating to a large degree on US dollars since 2009, after the Zimbabwe dollar was abandoned following some of the worst inflation in world history – peaking at something akin to 500 billion percent – that left residents barely able to buy such items as a single egg with a 1 billion dollar banknote.

The government introduced the new currency in the form of 1 dollar bond coins and 2 dollar bond notes to address the shortage of US dollars and to boost exports. But many say they aren’t buying into the government’s plan.

“They are only giving us bond notes because they don’t have real dollars,” Lovemore Chitongo, 40, a shoe salesman in Harare, told Agence France-Presse. “There is no way the bond note will be equal to the US dollar. The market will determine the exchange rate.”

Proof that government dictates and reality often don’t match up could be seen in the fact that Chitongo was charging $20 in US dollars per pair of shoes but 25 dollars in bond notes.

He would use the difference to buy US dollars on the black market, he told AFP.

What will shortly begin happening in Zimbabwe if citizens lose confidence in the new currency is that bond notes will be refused, or, if citizens are legally required to accept them, they will keep the US dollars and pass the bond notes on to someone else as quickly as possible.

Following the collapse of the Zimbabwean dollar in 2009 the country switched to a multi-currency system, according to Newsweek. At least nine currencies are now legal tender in Zimbabwe: the US dollar, the South African rand, the euro, the British pound, the Australian dollar, the Botswana pula, the Japanese yen, the Indian rupee and the Chinese yuan.

Not all are accepted by Zimbabwean traders, however. The US dollar is the most widely-used currency.

Zimbabwe’s economy collapsed under President Robert Mugabe’s chronic mismanagement. The nation’s leader since 1980, Mugabe sped redistribution of Zimbabwe’s farms from white landowners to blacks through forced confiscation beginning early last decade. Coupled with corruption and misconduct, droughts and an AIDS crisis, the nation of 13 million collapsed economically in 2009.

In fact, inflation was so bad it’s not certain whether anyone knows the exact rate at its peak.

While Zimbabwe officials cited an official inflation rate of 11.2 million percent in August 2008, the International Monetary Fund stated the country was suffering from 500 billion annual inflation rate and Newsweek asserted that Zimbabwe’s inflation rate reportedly peaked at “around 90 sextillion percent – or nine followed by 22 zeros.”

In an effort to win citizens to the new currency, the central bank recently launched an advertising campaign trying to allay people’s fears, saying retailers and businesses had agreed to accept the new currency.

However, opposition to bond notes has sparked fierce anti-government protests which have resulted in brutal police crackdowns.

Police on Monday broke up a protest planned by the pressure group Tajamuka in Harare and arrested the group’s spokesman, according to Agence France-Presse.

“The government is only treating the symptoms without attending to the problems,” Antony Hawkins, an economist at the University of Zimbabwe’s Business School, told the wire service. “We are not earning enough foreign currency and bond notes are not going to solve that. It will make the situation worse.”

In past few weeks, many Zimbabweans slept in lines outside banks so that they would have a better chance to withdraw US dollars from their accounts. Many are concerned that their US dollars were going to be converted into bond notes.

Banks, however, put severe limits on daily withdrawals, just $50 a day, up to $150 a week.

“I will take payments in bond notes but the big question is what do I do with them since some shops are refusing to accept them?” Lewis Mapira, a taxi driver in Harare, told AFP.

(Top: A Zimbabwean holds up 2 dollar bond notes, which began circulating Monday.)

Recalling a Canadian writer’s memory of distressed Wales

rhondda-mawr

If one travels for any length of time, one is bound to experience an unhappy adventure or two. What turns a miserable traveling experience into one that can be looked back on with, if not fondness, than at least a smile is the ability to take something away from the experience, be it a lesson, a memory or the ability to count one’s blessings.

George Woodcock (1912-1995) was a noted Canadian writer of political biography and history, an anarchist thinker and a literary critic. He also published several volumes of travel writing. As such, he experienced his share of “bad trips.” Among those that stood out was one he took in the early 1930s, during the Great Depression, while in his early 20s.

Woodcock was born in Canada but grew up in England. While he would later move back to Canada after World War II, he had an aunt who lived in the Glamorgan region in South Wales, which gave him the chance for free holidays. Apparently, he got what he paid for:

One day, when I was visiting her, I decided to take a bus and visit the Rhondda area, the heart of the South Wales mining district. Rhondda has a special place in the thoughts of those with Welsh connections, for one of the finest of all Welsh songs – stunning when the daios from the valley sing it at a rugby match – is called ‘Cwm Rhondda’  the hill of Rhondda. There are actually two valleys – Rhondda Mawr, Great Rhondda, or the main valley, and Rhondda Fach, the lesser valley of little Rhondda that branches off from it. I intended to go up Rhondda Mawr, cross over the intervening hills, and come down in Rhondda Fach, which I would descend and then make my way back to Bridgend, where I was staying.

It was the worst of times in Rhondda, though it probably looked just a little better than the best of times, since most of the mines were not working, and the smoke that would normally have given a dark, satanic aspect to the landscape was less evident that in more prosperous days. Still, it was dismal enough: a long ribbon of a main road with no real gap in the houses, so that it seemed like a single serpentine town, thickening out at each village centre like knots on a string. The houses were mostly built of gray stone long turned black from soot. In the middle distance reared up the gaunt towers and immense wheels of the pitheads and the truncated pyramids of the slag heaps. There were a few sickly trees among the houses, but the hills on each side were bare and greenish brown; spring had hardly begun.

It had the feeling of occupied territory. Many of the shops had gone out of business, the mines had slowed down years ago, and the General Strike of 1926 – disastrous for the workers – had delivered the coup de grace to the local economy. The people were shabby and resentful. Groups of ragged men squatted on their haunches, as miners do, and played pitch-and-toss with buttons; they had no halfpennies to venture. A man came strolling down the street, dejectedly whistling ‘The Red Flag’ in slow time as if it were a dirge.

Later, after being caught on the hills in a drenching downpour, Woodcock soddenly came across a slag heap where approximately 50 men and women were industriously picking over the ground.

I caught up with a man walking along the overgrown road from the mine into the village, whose damp slate roofs I could see glistening about half a mile away. He was pushing a rusty old bicycle that had no saddle and no tires, but it served to transport the dirty gunnysack he had tied onto the handle bars. He had been picking coat from the lagheap. ‘No bigger nor walnuts, man,’ he explained. The big coal had been taken years ago, so long ago it was since work had been seen in the village. I asked him how long he had been unemployed. ‘Ach y fi, man, it’s nine years I’ve been wasting and wasted.’ Yet he was friendly, perhaps because I looked such a wretched object that he saw me as an equal in misery.

(Top: View of Rhondda Valley today.)

More proof that life is even harder when you’re stupid

penny-ante

One occasionally hears of criminals who pull off deeds so brilliant that it leaves one wondering why they simply didn’t pursue a more honest line of work. These sorts obviously possess the vision, ingenuity and resourcefulness always in demand in the business world.

Then you have individuals such as Robert Napolitan of Scott Township, Pa.

Police in nearby Taylor, just outside Scranton, have accused the 34-year-old with taking a steel drum filled with 300,000 pennies from a trucking company.

A criminal complaint says he loaded the drum, which weighed 1,600 pounds, onto a hand truck at the company last week and rolled it to his Jeep.

Robert Napolitan of Scott Township, Pa. Not exactly Ronnie Biggs.

Robert Napolitan of Scott Township, Pa. Not exactly Ronnie Biggs.

“Mr. Napolitan had a key to the building’s back door and informed a company dispatcher he would be there late at night during the Labor Day holiday weekend to remove parts from a disabled Dodge Durango,” according to the Scranton Times-Tribune. “Security camera footage captured his white Jeep Cherokee pulling in at 2:30 a.m. Monday but did not show he worked on the Dodge.”

Tracks through the dust and a trail of pennies marked Napolitan’s path, according to a police affidavit.

Police searched his Jeep and found 89 pennies underneath the seats and floor mats.

Police say Napolitan admitted to taking the drum and its $3,000 in contents.

One supposes that rather than spend the next 225 years rolling the pennies into paper sleeves, Napolitan would likely have taken the coins to a smelter and tried to cash them in for their metallic value. However, when it comes to “less-gifted” lawbreakers, one never knows.

For his trouble, Napolitan was jailed in Lackawanna County in lieu of $50,000 bail.

The sordid reason Rhode Island abolished the death penalty

old rhode island statehouse

Spend any time in Rhode Island and you quickly learn a few things: It’s not an island; it would appear to have the most corruption per capita outside of Sicily; and for such a small entity the Ocean State has more than its fair share of interesting stories.

Consider that Rhode Island hasn’t executed anyone in more than 170 years. Part of the reason is that the last man to die at the hands of the state was almost certainly railroaded, a victim of anti-Irish, anti-Catholic, anti-immigrant bigotry that was prevalent in many areas of the United States into the 20th century.

This particular story begins on Dec. 31, 1843, when textile magnate Amasa Sprague finished supper at his Cranston, RI, mansion and went for a walk. Sprague was powerful both in physique and prominence.

He was a New England Brahmin, and together with his brother William owned a textile business started by his father William Sprague Sr. The Spragues owned several cotton mills in Rhode Island, but their most profitable factory was the print works in nearby Spragueville, which printed calico patterns on cloth.

The A & W Sprague Co. employed most residents of Spragueville, owned the tenements they rented and the company store where they shopped. He was a man to be feared.

During Sprague’s after-dinner walk, he was accosted by at least two individuals. He was shot in the right wrist and struck with a blunt instrument in the left side of his head, then his right. Despite desperate attempts to fight back, Sprague was overcome and killed.

There was no shortage of potential suspects, according to the New England Historical Society.

Logo of A & W Sprague Co., showing Cranston, RI, textile plant.

Logo of A & W Sprague Co., showing Cranston, RI, textile plant.

There was talk that the murder was politically motivated. The previous year, an individual named Thomas Dorr had been arrested for a failed attempt to force broader democracy in Rhode Island by setting up a rival government that would expand the vote to all adult white males.

Still governed by the state’s 1663 colonial charter with its relatively high property requirement for suffrage, Rhode Island allowed only white, propertied men – about a third of adult male population – to vote. The Irish, who were nearly all disfranchised under the colonial charter, strongly supported the Dorr Rebellion.

Sprague, like many wealthy white males, benefited from the system in place and, along with his brother William and brother-in-law Emanuel Rice, helped orchestrate Dorr’s downfall. Some speculated that supporters of Thomas Dorr, who would later be found guilty of treason against the state, assassinated Amasa Sprague, according to the New England Historical Society.

Others looked closer to home. William and Amasa Sprague apparently disagreed about what direction the family business should take. William wanted to expand the company beyond Rhode Island, while Amasa was content to continue the business at its current size and profitability. Neither man had a reputation for backing down when they didn’t get their way.

Suspicion also fell upon Nicholas Gordon, a tavern owner whose establishment was frequented by Sprague’s millworkers, much to Amasa Sprague’s displeasure.

Gordon’s tavern was attached to his home and was located in a section of Cranston, which, in the decidedly indelicate sensitivities that were prevalent in 19th century America, was nicknamed “Monkeytown” because of its Irish population.

“Amasa Sprague had successfully fought against renewing Gordon’s liquor license because, he said, his Irish millworkers were getting drunk during work hours and neglecting their jobs,” according to the New England Historical Society. “Gordon and Sprague had fought publicly. Sprague and Gordon had once met on a path and neither refused to give way. Finally Sprague grabbed Gordon by the collar and shouted, ‘Get out of the way, you damned Irishman!’”

The entire case was a fiasco from beginning to end. William Sprague resigned his senate seat to supervise the murder investigation, an apparent conflict of interest.

Not only was Nicholas Gordon quickly arrested, along with his younger brothers, John and William, the Gordon’s mother and a friend of Nicholas’ named Michael O’Brien – because everyone knew the Irish always stuck together – but the Gordon’s dog was apprehended, as well. (The dog was later described by a defense attorney as toothless and old.)

William and John were tried first, with the Irish community rallying behind them and raising funds for their defense.

Ultimately, it was 29-year-old John Gordon, recently arrived from Ireland to join his brothers Nicholas and William, who took the fall for the crime. William was found not guilty, but John was found guilty despite a conviction based on contradictory circumstantial evidence.

How badly were the cards stacked against John Gordon?

In trials held at the then-Rhode Island Statehouse, Presiding judge Job Durfee told jurors to give greater weight to Yankee witnesses than Irish witnesses. He added that they did not have to believe anything that the Irish witnesses for the defense said because they were by their nature unable to tell the truth, according to a 2013 report on the sordid affair by the Cranston Herald.

In addition, Henry Bowen Anthony, the editor of the Providence Journal, the leading news source for Rhode Island at the time, provided the public with plenty of “facts” about Gordon’s guilt, even though many were asserted without a shred of truth to them, the Herald added.

One of the pieces of evidence that convicted John was a broken gun found near the body of Amasa Sprague. Nicholas was known to own a gun, but it couldn’t be found in his house, so it was assumed the broken gun was his. After the trial it was discovered that William had hidden Nicholas’ gun under the attic floorboards, according to the New England Historical Society.

Nicholas was tried later, but he had an alibi and the witnesses who convicted his brother were suddenly unsure of their memories. His trial ended in a hung jury. His gun turned up just before his second trial, which also ended in a hung jury.

John Gordon was hanged on Feb. 14, 1845, in Providence. His last words were, “I hope all good Christians will pray for me.”

Many believed he was innocent and the victim of a legal lynching. Some 1,400 Irish came from Rhode Island, Connecticut and Massachusetts for his funeral. The procession took a detour to pass the Statehouse and the homes of the Yankee elite.

Seven years later, the Rhode Island legislature banned capital punishment, in part because of the travesty of John Gordon’s trial.

In 2011, 166 years after John Gordon was hanged by the state of Rhode Island, Gov. Lincoln Chafee pardoned him.

“John Gordon was put to death after a highly questionable judicial process and based on no concrete evidence,” Chafee said in 2011. “There is no question he was not given a fair trial.”

(Old Rhode Island Statehouse, Providence, where John Gordon and his brothers were tried for the murder of Amasa Sprague.)

California, there I go; enough of your dog-and-pony show

california traffic

Here’s a head-scratcher: California, beset by ridiculously high real estate prices, onerous taxation, draconian regulation and, in the metro areas, extreme congestion, is losing tens of thousands of residents to other states.

During the 12 months ending June 30, 2015, 61,000 more people left California than moved to the state from elsewhere in the US, according to information generated by California officials.

The so-called “net outward migration” was the largest since 2011, when 63,300 more people fled California than entered it. Over the past quarter century, the state has experienced negative outward migration in 22 of the past 25 years, according to the San Jose Mercury News.

It’s been 20 years since I bid adieu to the Golden State, where I was born and where my parents still reside. I’d lived in many different parts of the US and had seen a great deal of the country, so leaving for the last time in 1996 wasn’t difficult.

At that time, it was all but impossible to find a decent home for under $350,000, even two hours or more from the state’s large metro areas.

The final straw came when, tired of commuting 2-1/2 hours each way to San Francisco from near where my folks lived along the Monterey Bay, I looked for a home closer to the Bay Area. The best deal available was one half of a small, rundown duplex in the concrete jungle of a San Jose suburb that looked to have had its fair share of gang problems. The price was $267,500.

A couple of months later I changed jobs and moved to the Florida Panhandle, where housing costs were one-quarter of California’s.

When you add in the bureaucracy the state appears to revel in, the restrictions on everyday life – don’t dare ask for a plastic bag when checking out at a supermarket, for example – the rampant hyper-environmentalism, the steady drumbeat of property crime such as cars being broken into, burglaries and vandalism, and the swarms of people who seemingly inhabit every square inch of the state from the coast 25 miles inland from Marin County north of San Francisco all the way down to the border with Mexico, it’s no wonder that many are choosing to leave.

Yes, the job market in the tech sector is currently booming, but when it costs so much to buy or rent a place to live, and taxes eat up so much of what remains, it’s tough to get ahead. I could never understand how one could have peace of mind with a $3,000 mortgage payment looming each month. That’s a sword of Damocles I didn’t need hanging over my head.

The impact of California’s outward flow is felt throughout the west, as well.

Twenty years ago, people not only in neighboring states of Arizona, Nevada and Oregon complained that California “refugees” were driving up real estate prices, but also in Montana, Colorado, New Mexico, Utah and Idaho.

During a housing boom, a California resident can make a profit of $100,000 or more on their home in a relatively short time. The windfall can be applied to a princely palace in other areas. But that means real estate prices rise for everyone in those other areas.

Of course, during the housing bust that occurred last decade tens of thousands of Californians walked away from their homes, abandoning abodes rather than making payments on properties that had suddenly declined in value precipitously.

For now, California officials don’t seem all that concerned.

The state has never been shy about taxing its residents to make up for revenue shortfalls, and while there is a sizeable percentage of individuals who classify themselves as political conservatives, they are outnumbered by political liberals who, while perhaps well intentioned, have run the state aground through decades of social, fiscal and political experimentation based on theory but with little foundation in practicality.

But, as with any polity, the absence of legitimate two-party or multiple-party systems has enabled those who run California to treat it as their own private political Petri dish, passing laws, ordinances and regulations to fit their needs, rather than what works best for those they’re supposed to be serving. It’s no different from, say, a Southern state completely dominated by conservatives. Once the checks and balances are removed, it’s the citizens who pay the price.

California’s future is impossible to predict, of course. But until those that run the state decide to do something dramatically different, it’s almost a certainty that the ongoing mini-exodus will continue.

As crisis worsens, Venezuela becoming more isolated

simon bolivar airport

Venezuela’s implosion continues.

Amid hyperinflation, massive unemployment, social unrest, political oppression and shortages of food and medicine, the South American nation is on the verge of general anarchy, a legacy of Hugo Chávez’s years of mismanagement, along with that of successor Nicolás Maduro.

So it’s hardly surprising that airlines such as Lufthansa and LATAM Airlines are crossing the country off their schedules.

The pair joins Air Canada, American Airlines and Alitalia which in recent years have scaled back or suspended Venezuelan operations, according to The Economist.

But it isn’t just unrest or political chaos that’s driving airlines to divert flights elsewhere.

Venezuela, seeking to avoid yet another devaluation of its currency or outright repudiation of debt, which would cut off credit to the ailing oil industry, has tightened currency controls introduced by Chávez in 2003.

The restrictions make it almost impossible for companies such as international airlines to convert the Venezuelan currency, bolívares, into dollars.

This has made it difficult for international airlines, who typically charge customers in local currencies, to repatriate their profits.

That isn’t surprising given that Chávez initially implemented currency controls after capital flight led to a devaluation of the currency.

“Lufthansa has written off the more than $100 million it says it is owed; LATAM says it is due $3 million,” according to The Economist. “The International Air Transport Association, the airlines’ trade body, estimates that Venezuela’s government is withholding $3.8 billion of airline revenues.”

A Lufthansa spokesman told Agence France-Presse that the country’s difficult economic situation and “the fact that is it is not possible to transfer foreign currency out of the country,” is behind the company’s decision.

Lufthansa is scheduled to quit service to the country this week; LATAM, Latin America’s largest airline group, has said it will stop flights to Venezuela by Aug. 1.

Contrast the current situation with that of 40 years ago, when Venezuela’s oil wealth attracted business travelers – and airlines – from all over the world.

At present, just a handful of foreign airlines continue to serve the troubled nation, including Air France and United Airlines.

But both are public companies and it seems unlikely either can or will stand for having their revenues tied up by a banana republic.

(Top: Air France plane show in foreground at Simon Bolivar Airport, near Caracas, Venezuela.)

Turning the tables on the Internet’s blackguards

snow

Over the past couple of weeks no fewer than half a dozen spam faxes have come into my office pushing everything from Caribbean vacations to timeshare rentals. My first reaction: Do spammers use fax machines anymore?; followed by, how can spamming people by fax possibly be worth the effort?

Not all spammers are retrograde. Anyone who writes or reads a blog is familiar with insidious spammers attempting to post all sorts of unrelated links in comments sections for such items as Chinese manufactured goods, search-engine optimization services, the ubiquitous “male-enhancement” products and scams that purport to enable individuals to earn $87 an hour working part-time from home.

Of course, a good spam filter keeps many of these from seeing the light of day, but some spammers are particularly persistent, especially on blogs that see heavy traffic.

Google uses a complex algorithm to rank the relevancy of websites and blogs, and has worked to make sure that the actions of third-party sites – read spammers – don’t negatively affect websites.

Google has even gone so far as to devise a “disavow” tool which allows websites and blogs to basically ask Google not to take certain links into account when assessing their sites.

It would appear that these spammers are also being penalized by Google for their past actions.

The Coyote Blog noted recently that it has been receiving link-removal requests from companies that spammed its comment section in the past.

“Most of them threaten that somehow their past spamming might threaten my Google rating, when in fact they are actually worried about their own Google search ranking,” The Coyote Blog writes.

Coyote, unsurprisingly, is less than sympathetic to these online vermin. He responds to such requests thusly:

I might or might not get to it, depending on how I feel and how hard it turns out to be. I only have limited sympathy as your company placed those spam links on my site against my wishes and against the usage guidelines for the site and on posts that largely were irrelevant to your product. I had to go to considerable expense to move my server and add new software specifically to fight spam of the sort you were dumping on me. All I can say is that you reap what you sow. And as to your threats that my Google ranking is somehow in jeopardy due to your past behavior, I believe Google is fully aware of whether your site or my site should be penalized for such spam, and it is not going to be my site.

Should The Coyote Blog get around to addressing the spammer’s request, it usually adds an update to the post itself saying that “[company with link] has confessed to being unapologetic spammers in the past and a link to their site [and I include the link] has been moved from the comments section at their request and moved to the main post to give their bad past behavior more visibility.”

Hear! Hear! Way to stick it to the Man Mouse!