Another person on the skids is Robert Mugabe. Last
week the Reserve Bank of Zimbabwe effectively had to cancel or withdraw
nearly all of a bond auction and the fraction that did get away had a
yield of 515 per cent.
Mugabe is on the verge of
a sovereign default and the central bank has been disguising a fiscal
deficit of nearly 60 per cent of gross domestic product. Markets
usually make the right judgement in the end and they have finally
closed on Mugabe.
Pretty soon he will be able to pay neither the army nor his corrupt supporters. It couldn’t happen to a nicer guy.
Fiscal deficit of 60% of GDP? Eyewatering.
The only time I’ve ever seen a government in quite that bad a situation was years ago while working in Russia. N. Korea wanted to buy something but they couldn’t actually persuade their own bank to issue a letter of credit. A sovereign nation, not able to raise $250,000 from their own bank.
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