Gononomics and the U.S. Debt Explosion: Lessons from Zimbabwe’s Hyperinflation
In the mid-2000s, Zimbabwe was facing one of the worst economic crises in modern history. Hyperinflation was running rampant, and the economy spiraled out of control under the leadership of the Central Bank Governor, Gideon Gono. This chaotic period gave rise to what many of us in Zimbabwe called "Gononomics." The currency was devaluing so fast that money itself became a volatile commodity. People became money changers not out of choice but necessity, trading Zim dollars, U.S. dollars, and South African rand to survive.
I remember how wild it was. I made $5,000 in just an hour once, simply by connecting a buyer and a seller who needed currency exchanged. Almost everyone in the country was doing this, whether in back alleys or on street corners. It wasn’t a business model — it was survival.
Fast forward to today, and I see unsettling parallels in the U.S. economy, particularly with the rapid growth of the national debt. The U.S. public debt recently increased by $345 billion in just three days, pushing the total to a record $35.7 trillion. Since June 2023, the federal debt has surged by $4 trillion (14%), while the U.S. GDP has only grown by $1.5 trillion (approximately 6%). This means that debt has outpaced economic growth by a factor of 2.7 over the past 16 months.
This level of debt growth is unprecedented outside of crisis periods like the COVID-19 pandemic, and it’s raising alarm bells. As someone who witnessed firsthand what runaway debt and hyperinflation can do to a country, the signs are eerily familiar. In Zimbabwe, hyperinflation didn’t just happen overnight. It was the result of years of economic mismanagement, government overspending, and printing money to cover deficits.
Similarly, in the U.S., the massive federal spending and the Federal Reserve's monetary policies have driven the debt to astronomical levels. What happens when the debt becomes unsustainable? In Zimbabwe, the result was hyperinflation, the collapse of the local currency, and an economy where people were forced to become de facto money changers to survive.
While the U.S. is not Zimbabwe, and the U.S. dollar remains the world’s reserve currency, the trajectory is concerning. Debt cannot grow faster than the economy indefinitely. At some point, the system will break, and when it does, those with the ability to adapt quickly—like the money changers in Zimbabwe—will find ways to survive.
The rise of crypto and decentralized finance (DeFi) offers some insights into how individuals are preparing for this kind of financial instability. When traditional systems falter, people look for alternatives, whether it’s in the form of crypto assets or informal currency markets. In the age of digital finance, platforms that facilitate peer-to-peer transactions, decentralized lending, and tokenized assets could play the role that money changers did in Zimbabwe. People will find new ways to move money, hedge against inflation, and preserve their wealth.
The question now is, will the U.S. and other major economies manage to curb their growing debt in time, or will we see a new era of global Gononomics, where the average person has to become a digital money changer to survive?
In Zimbabwe, we learned to adapt. Now, the world may need to do the same. The key lesson is that no matter how dire the economic situation gets, there are always opportunities for those who understand the system, even when the system is on the verge of collapse.
Final Thoughts
Hyperinflation taught us that survival often comes down to innovation and quick thinking. As the U.S. debt continues to grow, it's essential to pay attention to the lessons from history. While the U.S. has far more tools at its disposal than Zimbabwe ever did, the parallels should not be ignored. Preparing for economic shifts, diversifying investments, and understanding the alternative financial systems emerging through blockchain technology may prove to be crucial in navigating the uncertain future ahead.
