Zimbabwe

[Margonme]

I have a friends in Zimbabwe. With today's technology, I can chat easily. A friend in Bulawayo told me that there was no tap water this week. She carried her water from a public borehole.

May not sound strange to some when they think of Africa. Until you realize, Bulawayo was a modern city. Until 1980, Salisbury (renamed Harare after independence) and Bulawayo were first world cities in a country - Rhodesia- that was industrialized and agriculture was thriving. After 37 years of President Mugabe, Zimbabwe is a sorry, pitiful nation with astronomical inflation, currency has the value of newspaper, and no one has a job. My friend, Nasizo Dude, means Zebra, lives in Bulawayo. Nasizo is a proud Nedebele from the Matopo Hills, where Cecil Rhodes is buried on a kopje, Afrikaner word for hill.

Nasizo's only daughter is in a boarding home in Harare. Nasizo cannot leave Zimbabwe as no one will allow them to enter the surrounding nations. Her sister was able to smuggle her way to South Africa and marry. Her sister is her only source of support. Zimbabwe money is worthless. Economy runs on foreign currency.

Oddly, the USA, is a parallel, we run on foreign currency indirectly. It takes foreign currency to buy our debt.

 

[True Grit Farms]

Is there anywhere that those people thrive? Seems like without leadship some people don't stand a chance.

 

[Margonme]

Is there anywhere that those people thrive? Seems like without leadship some people don't stand a chance.

Republic of South Africa and Botswana do ok. The general answer is NO. Africa is a Continent, I mention that because Sarah Palin didn't know the difference between a continent and a nation. The continent of Africa was colonies of European nations until Kenya began the end of the colonial Era. With independence, African nations have suffered as much under native rule as they did under colonial rule. Mugabe is a prime example. He is Mashona, hates the Nedebele people. He has not only crucified them, but has policies have hurt his own tribe. Or should I say, lack of policies and leadership.

 

[Margonme]

Grit, some of the Northern Nations on the continent have the biggest economies. Egypt, Nigeria, Tanzania, Morocco, etc. Africa is disappointing because it is rich in resources. Lots of metals, lots of land and plenty of humans. Africans are hard working people, with good policies and leadership, they have potential.

 

[TexasBred]

I have a friends in Zimbabwe. With today's technology, I can chat easily. A friend in Bulawayo told me that there was no tap water this week. She carried her water from a public borehole.

May not sound strange to some when they think of Africa. Until you realize, Bulawayo was a modern city. Until 1980, Salisbury (renamed Harare after independence) and Bulawayo were first world cities in a country - Rhodesia- that was industrialized and agriculture was thriving. After 37 years of President Mugabe, Zimbabwe is a sorry, pitiful nation with astronomical inflation, currency has the value of newspaper, and no one has a job. My friend, Nasizo Dude, means Zebra, lives in Bulawayo. Nasizo is a proud Nedebele from the Matopo Hills, where Cecil Rhodes is buried on a kopje, Afrikaner word for hill.

Nasizo's only daughter is in a boarding home in Harare. Nasizo cannot leave Zimbabwe as no one will allow them to enter the surrounding nations. Her sister was able to smuggle her way to South Africa and marry. Her sister is her only source of support. Zimbabwe money is worthless. Economy runs on foreign currency.

Oddly, the USA, is a parallel, we run on foreign currency indirectly. It takes foreign currency to buy our debt.

But that debt they buy is backed by US dollars which ALL countries still think are extremely valuable and an asset to have. That's why they keep buying our treasury bills which have almost zero yield.

 

[Margonme]

[*]

I have a friends in Zimbabwe. With today's technology, I can chat easily. A friend in Bulawayo told me that there was no tap water this week. She carried her water from a public borehole.

May not sound strange to some when they think of Africa. Until you realize, Bulawayo was a modern city. Until 1980, Salisbury (renamed Harare after independence) and Bulawayo were first world cities in a country - Rhodesia- that was industrialized and agriculture was thriving. After 37 years of President Mugabe, Zimbabwe is a sorry, pitiful nation with astronomical inflation, currency has the value of newspaper, and no one has a job. My friend, Nasizo Dude, means Zebra, lives in Bulawayo. Nasizo is a proud Nedebele from the Matopo Hills, where Cecil Rhodes is buried on a kopje, Afrikaner word for hill.

Nasizo's only daughter is in a boarding home in Harare. Nasizo cannot leave Zimbabwe as no one will allow them to enter the surrounding nations. Her sister was able to smuggle her way to South Africa and marry. Her sister is her only source of support. Zimbabwe money is worthless. Economy runs on foreign currency.

Oddly, the USA, is a parallel, we run on foreign currency indirectly. It takes foreign currency to buy our debt.

But that debt they buy is backed by US dollars which ALL countries still think are extremely valuable and an asset to have. That's why they keep buying our treasury bills which have almost zero yield.

Agree. USA has a large economy. We have laws. So there is trust in our currency.

30 year US treasury bonds currently have a 2.75 percent coupon.

 

[TexasBred]

[*]

I have a friends in Zimbabwe. With today's technology, I can chat easily. A friend in Bulawayo told me that there was no tap water this week. She carried her water from a public borehole.

May not sound strange to some when they think of Africa. Until you realize, Bulawayo was a modern city. Until 1980, Salisbury (renamed Harare after independence) and Bulawayo were first world cities in a country - Rhodesia- that was industrialized and agriculture was thriving. After 37 years of President Mugabe, Zimbabwe is a sorry, pitiful nation with astronomical inflation, currency has the value of newspaper, and no one has a job. My friend, Nasizo Dude, means Zebra, lives in Bulawayo. Nasizo is a proud Nedebele from the Matopo Hills, where Cecil Rhodes is buried on a kopje, Afrikaner word for hill.

Nasizo's only daughter is in a boarding home in Harare. Nasizo cannot leave Zimbabwe as no one will allow them to enter the surrounding nations. Her sister was able to smuggle her way to South Africa and marry. Her sister is her only source of support. Zimbabwe money is worthless. Economy runs on foreign currency.

Oddly, the USA, is a parallel, we run on foreign currency indirectly. It takes foreign currency to buy our debt.

But that debt they buy is backed by US dollars which ALL countries still think are extremely valuable and an asset to have. That's why they keep buying our treasury bills which have almost zero yield.

Agree. USA has a large economy. We have laws. So there is trust in our currency.

30 year US treasury bonds currently have a 2.75 percent coupon.

Haven't checked in ages but the principal probably has to be discounted about 10-12% to get the yield up.

 

[jedstivers]

It's coming here soon enough too. We'll get to see it first hand.

 

[Margonme]

Haven't checked in ages but the principal probably has to be discounted about 10-12% to get the yield up.

The exchange between China and the US Treasury is thus:

Not one penny in hard currency exchanges hands. The exchange is "electronic". China maintains an electronic account with the US Treasury, when they purchase US Treasury Bonds, the US Treasury Account is credited. When we service those bonds with coupon payments, China's account is credited.

In fact, it is physically impossible for the US to conduct hard currency exchange because of the limitations on face value. It would literally take cargo planes to complete such an undertaking.

It is my understanding that China conducts business with the Treasury "tongue in cheek". In plain words, they are satisfied with the coupon payments. No one wants to shake the tree!

About 8 years ago, there was a story that the five largest buyers of Treasuries met in Russia. Russia made an attempt to denounce the US dollar as the World currency STANDARD. China told them to pound sand. The Chinese got too much US currency in principle on their books.

But that pitch by Russia stands as an omen, if the big lenders who provide one of every two dollars it takes to run the US ever agree to relegate our currency to the status it probably deserves, well.... You can guess the rest of the story.

 

[Margonme]

Forbes. Oct. 2014.

Given the state of the global markets, the U.S. is still considered to be the best house in a bad neighborhood. Even though more than one third of the debt is owned by foreign nations, as long as there are no safer places to invest, money will find its way here. Therefore, global turmoil would be in the best interest of the federal government. Anything which raises fear will bring money to the Treasury and allay the need for higher taxes. However, one day this unsustainable path we’re on will reach its day of reckoning. However, that’s probably not any time soon.

 

[TexasBred]

Haven't checked in ages but the principal probably has to be discounted about 10-12% to get the yield up.

The exchange between China and the US Treasury is thus:

Not one penny in hard currency exchanges hands. The exchange is "electronic". China maintains an electronic account with the US Treasury, when they purchase US Treasury Bonds, the US Treasury Account is credited. When we service those bonds with coupon payments, China's account is credited.

In fact, it is physically impossible for the US to conduct hard currency exchange because of the limitations on face value. It would literally take cargo planes to complete such an undertaking.

It is my understanding that China conducts business with the Treasury "tongue in cheek". In plain words, they are satisfied with the coupon payments. No one wants to shake the tree!

About 8 years ago, there was a story that the five largest buyers of Treasuries met in Russia. Russia made an attempt to denounce the US dollar as the World currency STANDARD. China told them to pound sand. The Chinese got too much US currency in principle on their books.

But that pitch by Russia stands as an omen, if the big lenders who provide one of every two dollars it takes to run the US ever agree to relegate our currency to the status it probably deserves, well.... You can guess the rest of the story.

Ron commercial banks have been doing the very same thing for ages. Nothing but a bunch of electronic entries. What I meant was that if China wants to buy a US Treasury with a 2.5% or 2.75% coupon the US would have probably have to discount it down to about 90% of par ($900,000 for a million dollar bond). This would raise the effective yield up to a more meaningful level to the Chinese.

 

[Margonme]

Haven't checked in ages but the principal probably has to be discounted about 10-12% to get the yield up.

The exchange between China and the US Treasury is thus:

Not one penny in hard currency exchanges hands. The exchange is "electronic". China maintains an electronic account with the US Treasury, when they purchase US Treasury Bonds, the US Treasury Account is credited. When we service those bonds with coupon payments, China's account is credited.

In fact, it is physically impossible for the US to conduct hard currency exchange because of the limitations on face value. It would literally take cargo planes to complete such an undertaking.

It is my understanding that China conducts business with the Treasury "tongue in cheek". In plain words, they are satisfied with the coupon payments. No one wants to shake the tree!

About 8 years ago, there was a story that the five largest buyers of Treasuries met in Russia. Russia made an attempt to denounce the US dollar as the World currency STANDARD. China told them to pound sand. The Chinese got too much US currency in principle on their books.

But that pitch by Russia stands as an omen, if the big lenders who provide one of every two dollars it takes to run the US ever agree to relegate our currency to the status it probably deserves, well.... You can guess the rest of the story.

Ron commercial banks have been doing the very same thing for ages. Nothing but a bunch of electronic entries. What I meant was that if China wants to buy a US Treasury with a 2.5% or 2.75% coupon the US would have probably have to discount it down to about 90% of par ($900,000 for a million dollar bond). This would raise the effective yield up to a more meaningful level to the Chinese.

I got you. I agree. Raising the yield to attract their investment. Yes.

 

[Davemk]

Haven't checked in ages but the principal probably has to be discounted about 10-12% to get the yield up.

The exchange between China and the US Treasury is thus:

Not one penny in hard currency exchanges hands. The exchange is "electronic". China maintains an electronic account with the US Treasury, when they purchase US Treasury Bonds, the US Treasury Account is credited. When we service those bonds with coupon payments, China's account is credited.

In fact, it is physically impossible for the US to conduct hard currency exchange because of the limitations on face value. It would literally take cargo planes to complete such an undertaking.

It is my understanding that China conducts business with the Treasury "tongue in cheek". In plain words, they are satisfied with the coupon payments. No one wants to shake the tree!

About 8 years ago, there was a story that the five largest buyers of Treasuries met in Russia. Russia made an attempt to denounce the US dollar as the World currency STANDARD. China told them to pound sand. The Chinese got too much US currency in principle on their books.

But that pitch by Russia stands as an omen, if the big lenders who provide one of every two dollars it takes to run the US ever agree to relegate our currency to the status it probably deserves, well.... You can guess the rest of the story.

Ron commercial banks have been doing the very same thing for ages. Nothing but a bunch of electronic entries. What I meant was that if China wants to buy a US Treasury with a 2.5% or 2.75% coupon the US would have probably have to discount it down to about 90% of par ($900,000 for a million dollar bond). This would raise the effective yield up to a more meaningful level to the Chinese.

Publicly the Chinese do not get a discount. But, I bet there are side deals that are private.

 

[Margonme]

The exchange between China and the US Treasury is thus:

Not one penny in hard currency exchanges hands. The exchange is "electronic". China maintains an electronic account with the US Treasury, when they purchase US Treasury Bonds, the US Treasury Account is credited. When we service those bonds with coupon payments, China's account is credited.

In fact, it is physically impossible for the US to conduct hard currency exchange because of the limitations on face value. It would literally take cargo planes to complete such an undertaking.

It is my understanding that China conducts business with the Treasury "tongue in cheek". In plain words, they are satisfied with the coupon payments. No one wants to shake the tree!

About 8 years ago, there was a story that the five largest buyers of Treasuries met in Russia. Russia made an attempt to denounce the US dollar as the World currency STANDARD. China told them to pound sand. The Chinese got too much US currency in principle on their books.

But that pitch by Russia stands as an omen, if the big lenders who provide one of every two dollars it takes to run the US ever agree to relegate our currency to the status it probably deserves, well.... You can guess the rest of the story.

Ron commercial banks have been doing the very same thing for ages. Nothing but a bunch of electronic entries. What I meant was that if China wants to buy a US Treasury with a 2.5% or 2.75% coupon the US would have probably have to discount it down to about 90% of par ($900,000 for a million dollar bond). This would raise the effective yield up to a more meaningful level to the Chinese.

Publicly the Chinese do not get a discount. But, I bet there are side deals that are private.

You are right Dave.

 

[Anonymous]

http://www.zerohedge.com/news/2016-10-18/ According to this and other articles I've read, China and others are selling off treasuries pretty fast. There must still be buyers out there. As far as Africa, the Gulf of Guinea area must have a fairly profitable fishing industry. There is a shipyard here that's building shrimp boats for them right now. Every few years the yard will get several contracts for a company there. The boats cost in excess of $2,000,000. There is no way possible to justify building a new shrimp boat here at present economics so there something going on that we don't have.

 

[js1234]

I've made several trips to Southern Africa, Zimbabwe included. made some friends there along the way. Amazing to see the vestiges of an amazing country that was the breadbasket of Africa run like it now does. The smarter countries like Mozambique are actually seeing the opportunity and luring the white farmers with very lucrative leases etc. to develop their food supply.

 

[Nesikep]

http://www.zerohedge.com/news/2016-10-18/ According to this and other articles I've read, China and others are selling off treasuries pretty fast. There must still be buyers out there. As far as Africa, the Gulf of Guinea area must have a fairly profitable fishing industry. There is a shipyard here that's building shrimp boats for them right now. Every few years the yard will get several contracts for a company there. The boats cost in excess of $2,000,000. There is no way possible to justify building a new shrimp boat here at present economics so there something going on that we don't have.

Does that company have american shareholders, directors etc? That would probably explain why they can afford it.

 

[Anonymous]

http://www.zerohedge.com/news/2016-10-18/ According to this and other articles I've read, China and others are selling off treasuries pretty fast. There must still be buyers out there. As far as Africa, the Gulf of Guinea area must have a fairly profitable fishing industry. There is a shipyard here that's building shrimp boats for them right now. Every few years the yard will get several contracts for a company there. The boats cost in excess of $2,000,000. There is no way possible to justify building a new shrimp boat here at present economics so there something going on that we don't have.

Does that company have american shareholders, directors etc? That would probably explain why they can afford it.

I don't think so. I met an owner of a different fishing company from Sierra Leone. The shipyard set up the meeting because he was interested in some deep water trawling that we do. He was from French ancestry. Wasn't what I expected. Real nice man. Seemed really business minded and knowledgeable . He actually fished some himself, owner/operator.

 

[Margonme]

I've made several trips to Southern Africa, Zimbabwe included. made some friends there along the way. Amazing to see the vestiges of an amazing country that was the breadbasket of Africa run like it now does. The smarter countries like Mozambique are actually seeing the opportunity and luring the white farmers with very lucrative leases etc. to develop their food supply.

Mugabe's policies and the "veteran" movement chased the farmers out of Zimbabwe. That started occurring by 1990. It was a deliberate effort supported by Mugabe's administration. Was a foolish policy. The motive was to "repatriate" productive lands back to native peoples. The new managers of the land did not have the skills (management training, etc.) to succeed. I saw the evidence first hand. My first visit was 1987. On my return in the mid 90s and especially by 2000, the farms were idle and the equipment was nonfunctional.

Mozambique started their policy of luring white farmers back who had already left Zimbabwe and we're living in Great Britain, South Africa, Australia, etc.

Reuters 2016

Mugabe's land reforms have led to about 5,000 white farmers being evicted from their land by his supporters and war veterans over the past 16 years, often violently. More than a dozen farmers have been killed.

 

[TexasBred]

The exchange between China and the US Treasury is thus:

Not one penny in hard currency exchanges hands. The exchange is "electronic". China maintains an electronic account with the US Treasury, when they purchase US Treasury Bonds, the US Treasury Account is credited. When we service those bonds with coupon payments, China's account is credited.

In fact, it is physically impossible for the US to conduct hard currency exchange because of the limitations on face value. It would literally take cargo planes to complete such an undertaking.

It is my understanding that China conducts business with the Treasury "tongue in cheek". In plain words, they are satisfied with the coupon payments. No one wants to shake the tree!

About 8 years ago, there was a story that the five largest buyers of Treasuries met in Russia. Russia made an attempt to denounce the US dollar as the World currency STANDARD. China told them to pound sand. The Chinese got too much US currency in principle on their books.

But that pitch by Russia stands as an omen, if the big lenders who provide one of every two dollars it takes to run the US ever agree to relegate our currency to the status it probably deserves, well.... You can guess the rest of the story.

Ron commercial banks have been doing the very same thing for ages. Nothing but a bunch of electronic entries. What I meant was that if China wants to buy a US Treasury with a 2.5% or 2.75% coupon the US would have probably have to discount it down to about 90% of par ($900,000 for a million dollar bond). This would raise the effective yield up to a more meaningful level to the Chinese.

Publicly the Chinese do not get a discount. But, I bet there are side deals that are private.

Nobody gets a discount as far as the public knows. But nobody is going to pay "par" for a bond either when they can get it discounted. Just the way the market works for China, your local bank and you if you invest in them. Hasn't happened in a while but at one time it would cost you as much as 115% of par to buy a treasury because of the high coupon.