Cows as Wealth
Farmland in the United States is often thought of as a good hedge against inflation. The Economist magazine reports in Zimbabwe, cows fulfill the role of inflation hedge. Inflation has been a significant problem in Zimbabwe—in 2008 inflation reached a rate of 231,000,000 percent. In response, a Zimbabwean insurance company is now offering inflation-proof pensions. The pensions, rather than being denominated in Zimbabwe dollars, because they don’t hold value, or U.S. dollars, because they are hard to get, are denominated in cows. The insurance company’s customers contribute cash for their pensions, the company then immediately converts the cash into cows. When a policy matures, the customers can demand payment in cows or cash.
The pensions are popular with Zimbabweans. The company has 70,000 clients and will hold viewing days where customers can visit the cows. Savers in Zimbabwe have lost confidence in conventional means of saving. Cows, because they hold wealth and the wealth can grow through breeding, act as an alternative.