Real Value Unit to stabilise the economy on the way.

Most people realize that the situation in Zimbabwe is beyond politics at the moment. This cannot be left to go any further.

Brazil very successfully employed the Unidade Real de Valor. It is not a theory. It is a fact. It is not mine. I did not come up with it. It is a proven and very successful accounting practice used by Brazil and explained in Zimbabwe by the Brazilians to Zimababweans a few months ago.

Two items are required: a non-monetary index unit and a daily rate between that stable non-monetary index unit and the ZimDollar.

Zim already has the "stable" non-monetary index unit. It is the USD price of every non-monetary item in Zim.

I know the USD is a monetary item. I know.

The USD is 2% away from being a 100% stable non-monetary unit. I think that is acceptable in Zim´s current hyperinflationary chaos.

The fact that the USD is an immediately fully understandable and fully credible subsitute for a full non-monetary index makes it very acceptable in Zim.

So, the only item that needs to be generally agreed is the daily rate to be applied by everyone. I would suggest that it should be the Old Mutual Implied Rate for the USD in Zimbabwe. It is freely available to everyone every working day of the week. It is unambiguous and definite. The current rate can be used during the day with the closing price as the rate for the day. There is only one closing price. No ambiguity. One single price. Available to everyone everywhere with internet access.

What Mugabe is looking for r

I am sure Mugabe will like the idea of linking salaries and prices with a Brazilian style Unidade Real de Valor non-monetary real value unit. He can see that salaries and prices have to be linked somehow. He is trying to link them by force.

He is getting the idea. He just does not know how to link them because his economic advisors forget about the fact that Brazil managed to do it. Mugabe wants to do it the way he knows. By force and by police action. He is actually trying to do something.

I think the only reason he does what he is doing is because he does not know about any other way. His advisors also seem to be too scared to stand up to him with the right solutions. He can feel that everybody just wants him to go. I think his advisors also do not have an aswer.

The Unidade de Valor Real is the solution. Someone just has to have the guts to stand toe to toe with Mugabe and tell him this to his face. It is the solution Mugabe is looking for. He must just understand it and then he can implement it. It will work.

Copyright 2007 Nicolaas Johannes Smith

Reviewed 12-04-16

Unidade Real de Valor r

Zimbabwe can normalise everything following another country that had hyperinflation for 10 years and never had your problems.

That country is Brazil.

The Zim government should find out how Brazil stabilised its economy with a real value unit. They called it the Unidade Real de Valor. That is the only way to save Zimbabwe now. But someone has to explain the workings of the non-monetary real value unit to the Zim government.

The Zim governemt´s ideas are not working. Brazil knew what to do. Follow their proven success plan.

Here is a link to the Unidade Real de Valor:

http://en.wikipedia.org/wiki/Unidade_Real_de_Valor

It was "a non-monetary reference currency"

Reviewed 12-04-16