Current example of economic SHTF

How long before we see this here?

Zimbabwe today – America tomorrow – A letter from a reader who lives in Zimbabwe, which used to be our home.

Zimbabwe - Rock Bottom
By Cathy Buckle
cbuckle@mango.zw
6-17-7

Dear Family and Friends,

I stood for over forty minutes in a line at the bank to withdraw my own money this week - it’s not unusual to have to queue for even longer than this. There was no electricity - again - so the ATM machines were not working - again. Even if the ATM's were working, those queues often need an hour and a half to get to the front. Because of the oppressive, iron-fist regulations from Harare, individuals are only allowed to withdraw one and a half million dollars at a time from the bank - even if they have just deposited a hundred times that amount the same day. The bank charges a 'handling fee' for the withdrawal of amounts of one and a half million dollars or less but you can cannot withdraw more without applying for permission from the Reserve Bank in Harare.

To put all these figures in perspective, let me explain! You have to stand in a queue in the bank for four days in a row - each day drawing out the maximum amount, each day paying the 'handling fee," in order to purchase one tank of fuel for your car. Three days of maximum withdrawals will give you enough for one filling at the dentist. By the time you've got enough money together, the prices will have gone up again but for most of us all these things are just dreams anyway because now even a visit to the dentist has become an unaffordable luxury. Who would ever have imagined that a dental visit would be thought of as a luxury!

A combination of iron fist regulations, prices going up by an estimated 10 percent every day, and a government, which appears completely clueless about what to do next, I think it would be accurate to say we have reached rock bottom. This week the legislation enabling the government to read our emails, listen to our phone calls and intercept our letters sailed through parliament and it produced barely a ripple. Everyone is now only looking at the day-to-day human suffering and major national and international groupings have begun issuing the most frightening warnings.

The Zimbabwe Doctors for Human Rights said recently: "It can no longer be said that the health service is - near collapse, it has collapsed."

The International Committee of the Red Cross said that our health delivery system has collapsed to such levels as to be comparable to "a war situation."

A Heads of Agencies Contact Group, which includes 34 major organizations such as the U N and Oxfam, said: "economic collapse is expected before the end of 2007." They warn that by that time our currency will have become unusable and shops and services will have stopped operating. The Contact Group said: "it is inevitable, not just a possibility."

And so how do we survive this last stretch? Frankly most of us don't know. This week I heard the grim news from a friend whose wife is eight months pregnant. She lives in a rural area and has been told at the nearest health clinic that in addition to the financial charge, she must also bring a twenty-litre container of water with her when she comes to give birth or they will have no choice but to turn her away. This is the reality of what we all hope is finally rock bottom.

Thanks for reading.

Copyright Cathy Buckle 16 June 2007
www.cathybuckle.com my books: "African Tears" and
"Beyond Tears" are available from:
orders@africabookcentre.com To subscribe/unsubscribe to this letter, please write to: cbuckle@mango.zw


And this off Yahoo:
http://news.yahoo.com/s/nm/20070622/wl_nm/zimbabwe_dc

Mugabe faces pressure as currency crashes

<!-- END HEADLINE --> <!-- BEGIN STORY BODY --> By Nelson BanyaFri Jun 22, 8:46 AM ET

Zimbabwe's currency plunged to new depths on Friday as the U.S. ambassador to Harare predicted galloping inflation will force President Robert Mugabe from office before the end of the year.


The Zimbabwe dollar, which is pegged to the U.S dollar and was effectively devalued by the central bank to 15,000 to the greenback in April, was trading in the 170,000-200,000 range on the thriving black market on Friday.


Just a week before, the black market exchange rate was about 95,000 to one U.S dollar, and 2,500 to one in January.


Once a regional bread basket, Zimbabwe has suffered chronic food shortages since 2001 and is gripped by an economic crisis critics blame on Mugabe's controversial policies such as the seizure of white-owned farms to resettle landless blacks.


In an interview with the British Guardian newspaper, U.S. Ambassador Christopher Dell said Mugabe's government was effectively "committing regime change on itself."


"I believe inflation will hit 1.5 million percent by the end of 2007, if not before," he said. "I know that sounds stratospheric but, looking at the way things are going, I believe it is a modest forecast."


Economic analysts said the latest plunge of the Zimbabwe dollar was largely due to public fears that inflation would only get worse coupled with speculation that the Central Bank itself was now purchasing foreign currency on the black market to finance agriculture and other projects, although this could not be independently confirmed.


Mugabe -- Zimbabwe's sole rule since independence in 1980 -- has accused the southern African country's opposition and Western countries of plotting to unseat him and has been accused by critics of a draconian crackdown on political opponents.


On Friday, Zimbabwe's High Court ruled that hearings in the case of five men accused of plotting to topple Mugabe would be closed to the public and the media -- the latest sign of political tensions gripping the country.


CENTRAL BANK WARNING
The defiant leader, 83, has said he will stand for re-election after his current term ends next year and denies allegations that his government has committed human rights abuses.


The fall of the currency prompted central bank head Gideon Gono to warn that authorities could soon crack down on illegal foreign currency trading.
"It has become inevitable to fully crack the whip on those institutions and individuals who are willfully breaking the banking, anti-money laundering and exchange control laws," Gono said in comments carried by the official Herald newspaper.


Prices of fuel and basic consumer goods have risen sharply over the past two weeks, with the Consumer Council of Zimbabwe saying the cost of living for an average family of six has almost doubled in one month.


Official figures released by the Central Statistical Office show that prices doubled within one month in April, with the monthly inflation figure topping 100 percent.


The state agency is yet to present May data, but analysts put the year-on-year figure above 4,500 percent and expect the trend to continue.
Eight successive years of recession has left four out of five Zimbabweans without jobs and many struggle to feed their families, a situation analysts say could further stoke political tensions.


"People have completely lost faith in the currency and that means they have lost faith in the government that issues it," said Dell, who is close to the end of his posting to Zimbabwe.


"Things have reached a critical point. I believe the excitement will come in a matter of months, if not weeks. The Mugabe government is reaching end game, it is running out of options."


(Additional Reporting by Sophie Walker in London)