Fascinating report from a Zimbabwe visitor

Amongst goldbugs, Zimbabwe has become notorious because it's recently suffered an all-out hyperinflation. It's become a goldbug meme to equate Zimbabwe with the United States.

This travelogue by Alf Field, linked to at LewRockwell.com, presents a fascinating picture of a country that's recovering from the hyperinflation tornado. A large part of the piece brings the reader up to speed on the Mugabe government, and explains why the hyperinflation got rolling.

As it turns out, one of the triggers was massive money-printing to buy up foreign exchange to repay IMF loans. This fiddle produces an out-of-control spiral, because the money creation devalues the home currency. As the home currency goes down in terms of the foreign exchange needed, more needs to be printed to buy the same volume of foreign currency. The result is a Red Queen's Race.

People who believe that the U.S. is going to be another Zimbabwe should realize that the U.S. government has no need to buy any foreign exchange to pay off U.S. sovereign debt. It's true that Treasury indebtedness to foreign entities is worrisomely high, but it's all denominated in greenbacks.

Of course, there's the possibility of a future IMF loan to the U.S. government. (Wouldn't that be a come-down?)