In a worthless attempt to halt hyperinflation, Venezuela Deletes Three Zeros From Its Failing Currency.
Socialist Venezuela is going through a crisis that has left people struggling to pay for food and find medicines. Prices are being influenced by a black-market exchange rate that rises by the day and is currently five times the nearly inaccessible official rate.
President Nicolás Maduro late Thursday briefly outlined his monetary rescue plan. In a country where a dozen eggs can cost 250,000 bolivars ($5) amid worsening inflation, he would chop three zeros off the currency — arguably bringing the price for those eggs down to 250.
By June 2, under Maduro’s plan, new bolivars with lower denominations would be circulated — but old ones, with denominations as high as 100,000, would remain valid. It would leave vendors charging two prices — one for old bills, the other for the redenominated bolivar.
Empty Shelves
Merchants are arrested if they charge too much for food. The result is no food.
Loot or Die
The Guardian reports ‘We loot or we die of hunger’: food shortages fuel unrest in Venezuela.
- During the first 11 days of January the Venezuelan Observatory for Social Conflict, a Caracas rights group, recorded 107 episodes of looting and several deaths in 19 of Venezuela’s 23 states.
- On Margarita Island dozens of people waded into the ocean and forced their way aboard a fishing boat, making off with its catch of sardines
- In the city of Maracay, just west of Caracas, thieves broke into a veterinary school, stole two pregnant thoroughbred horses and slaughtered them for meat.
- A recent video from the western state of Mérida shows a group of people cornering a cow before stoning it to death as bystanders yell: “The people are hungry!”
- Price controls designed to make food more widely available to poorer people have had the opposite effect: many prices have been set below the cost of production, forcing food producers out of business.
- in the western city of Maracaibo, residents recently swarmed into the streets, stopped two trucks filled with flour and candy, and emptied them.
- “We either loot or we die of hunger,” one of the looters, Maryoli Corniele, told Diario la Verdad, the local newspaper.
Venezuela’s annual inflation rate for today, 3/21/18, is 8300%. This is a new all-time high. pic.twitter.com/eZblClU5ZM
— Steve Hanke (@steve_hanke) March 21, 2018
Meaningless Zeros
Here’s the Zimbabwe 10 trillion dollar note.
Taking zeros off or adding them as Zimbabwe did will not stop hyperinflation.
Venezuela is a prime example of socialism carried to the logical conclusion.
Mike “Mish” Shedlock
Watch out for the WEF’s power moves! 👀 Knowledge is power, so stay informed and aware.
Exactly so, Stuki.
The charts of Venezuela’s money supply are quite revealing in this context.
Carl_R the melt value of the old Mercury or Roosevelt dime is currently $1.19. So a pop still costs about a dime, if that dime had silver in it.
Carl_R you may be interested to know that from 1796 until 1929 the US produced $2-1/2 coins. They contained .12 oz pure gold.
As the govt starves the people to death, they sing cumbaya and are thankful for strict gun control laws……..
Lopping zeros off doesn’t halt hyperinflation, obviously, but it can help to manage the problem. On a lesser scale, in the US I remember when a penny bought a gum, and a dime bought a pop. That and two bits will buy you a cup of coffee, was the expression. Well, add a zero, and a pop is a buck, and coffee might be $2.50. So, today, do we really need pennies and nickles anymore? Maybe we need a small dollar coin (the new “dime”) and a manageable $2.50 coin (the new quarter), and the smallest paper bill should be $10. It doesn’t stop inflation, obviously, but that doesn’t mean it isn’t helpful. In another 40 years, if the US adds another 0, and a cup of coffee is $25, of what use will a penny or dime be?
By the way, a silver dime will still buy a pop, and a silver quarter will still buy a cup of coffee.
If Venezuela refused to “bend to neoliberal demands” they wouldn’t have a central bank printing money in order to bail out and prop up the assets of the ruling classes. Which means, they wouldn’t have inflation, either.
Venezuela is just a bit further along the line than the rest of the West. Not materially different from the US in any other way than timing.
link to counterpunch.org
link to counterpunch.org
It’s important to emphasize that Venezuela is not fully socialist, but has a “mixed” economy, with the private sector involved in many crucial sectors such as food distribution, pharmaceuticals, consumer product importation and sales, and the media
And as usual there’s no mention of, or even knowledge by, the US reader of the economic warfare being waged on a country that refuses to bend to its neoliberal demands.
@AWC Yeah. It doesn’t sleep because it so easily perpetuates itself. It’s because the prefrontal cortex has the ability to model its own state; that’s what separates us from the animals. This can create immense intelligence, but also shocking mental illness.
We are much like the camera that’s turned back on it’s own monitor and thus never done seeing. Or we are like the microphone turned on the speaker creating the God awful screech. It is that screech that is the terrible sound of our sin.
There’s not really much difference in principle between printing massive amounts of money and setting price controls to try and feed your people on the one hand, and legislating against all manner of things that are associated with death & suffering on the other.
Your basically just trying to fix the realities you hate by superstitious manipulation of socially constructed symbols. It’s like this in spirituality where the ego, our sense of self that lies at the root of all suffering, is just another symbol we believe exists in order to control the natural world we resent for lack of faith.
The predicament of human nature can be summarized thus:
-> we confuse the symbol with reality
-> then we suffer because the symbol is a horrifyingly pathetic reality
-> and so we try and manipulate our symbols to ease our nightmare reality.
It’s in our attitude to law. It’s in our attitude to money. But it’s first of all in our attitude to our own basic sense of existence: “I” must control.
December 12, 2017, Today, Russia is Venezuela’s lender of last resort, the last and only place the government can turn in search of a financial lifeline.
In November, Presidents Nicolás Maduro and Vladimir Putin agreed to a refinancing package of $3.15 billion in bilateral loans to Venezuela, putting off almost all payments until after 2023.
This was not generosity but pragmatism. With the Venezuelan treasury increasingly bare, Putin realized that Venezuela simply could not repay its debts. While official statements brim with the language of generosity, flexibility and friendship, the reality is more threadbare — Venezuela has no other option.
What Moscow expects in return is clear: Preferential access to Venezuela’s enormous oil reserves. At 300 billion barrels, Venezuela is virtually floating on top of a lake of oil.
link to theprint.in
Sean Penn should spend more time worrying about how to fix his rapidly failing movie career and not how to fix the assorted problems of the Third World. Most of their problems are unfixable anyway.
Sean Penn and Bernie Sanders were unavailable for comment except to say the right people were not in charge…
They are suffering because the US is sanctioning them into the stone age. I’m sure Donald’s new national security advisor, John Bolton, already has invasion plans drawn up.
Hyperinflation is indeed a political event – not a monetary one. The political event leads to a monetary one.
No it’s not. Hyperinflation is a political invent not an economical invent. I hate to break it to you, but we are all living in a heavily socialized system. Venezuelan’s problems have more to due with them being openly adversarial to US foreign policy in the region.
They are suffering because the US is sanctioning them into the stone age.
I found this interesting link to google.ca