Posted on 02/08/2013 3:44:09 PM PST by Orange1998
While the rest of the developed world is scrambling here and there, politely prodding its central bankers to destroy their relative currencies, all the while naming said devaluation assorted names, "quantitative easing" being the most popular, here comes Venezuela and shows the banana republics of the developed world what lobbing a nuclear bomb into a currency war knife fight looks like:
VENEZUELA DEVALUES FROM 4.30 TO 6.30 BOLIVARS VENEZUELA NEW CURRENCY BODY TO MANAGE DOLLAR INFLOWS CARACAS CONSUMER PRICES ROSE 3.3% IN JAN.
And that, ladies and gents of Caracas, is how you just lost 46% of your purchasing power, unless of course your fiat was in gold and silver, which just jumped by about 46%. And, in case there is confusion, this is in process, and coming soon to every "developed world" banana republic near you.
and just as we (and Kyle Bass) have warned - this is what happens to the nominal price of a stock market as currency wars escalate... how do those US investors who flooded Venezuela with cash feel now? bringing back those VEF gains is going to hurt...
The chart above is a free lesson in nominal vs real: the hardest lesson for some 99.9% of the world's population to grasp. One person who certainly knows how to devalue a currency in real terms FDR, whose 70% devaluation of the USD courtesy of executive order 6102, is merely an appetizer of what is about to be unleashed upon the US.
Its way to messy to confiscate the money from your account. Stroke of pen Big Ben takes from the savers and payroll while you sleep and calls it QE.
Venezuela’s exchange rate was ludicrous to the extreme anyway
It will probably still be.
Haven’t heard much about Baraq’s buddy Hugo lately.
Are those renowned Cuban docs keeping him in good health?
What are the units on the Graph’s Y axis....?
They are still selling their oil in dollars.
Until that changes nothing changes bit fake numbers..
um.. no word from him for 2 months.
he could be dead for all we know.
His two buds (Maduro, Cabelo) are trying to amass power in a new rivalry
Its like the last chapter in an Ayn Rand novel, trying to loot the last piece before the collapse
Nominal VS Real.
Keep an eye on government salaries their demand for raises while this is going on, while everyone else can’t.
I assume if he croaks, there will be a massive state funeral.
It’s the “progressive” thing to do.
There might be rival state funderals, one by Maduro and one by Cabelo...
They will try to top each other, give away goodies to the crowds, free food, maybe arrest and publicly humiliate an opposition politician while saber rattling against the US andd Colombia
you never know
Haven’t heard much about Baraq’s buddy Hugo lately.
Saw a note on Twitter a few days ago that he's out of the postoperative phase of his recuperation. Haven't seen anything since.
I have been thinking about buying some land or something in Argentina. They are going to do this soon too. I’d like to have a mortgage devalue itself by 10-20% a year.
I have been thinking about buying some land or something in Argentina. They are going to do this soon too. I’d like to have a mortgage devalue itself by 10-20% a year.
Venezuela already brought home the Gold and then devalued.
Venezuela holds 365 tons of gold abroad, in the form of around 17,000 standard 400-ounce bars, worth some $20 billion.
CARACAS, Venezuela — Venezuela’s Hugo Chavez is going for his gold.
The first shipment of more than 200 tons of Venezuelan gold reserves returned to Caracas last Friday, with Chavez supporters dancing in the streets as tanks rolled in with armed soldiers riding on top of pallets of ingots.
Chavez had said that he planned to recall all of the country’s gold reserves — kept in the United States, Europe, Canada and Switzerland — to Venezuela.
On top of this, the country’s domestic gold trade — a hodgepodge industry that Chavez has said is in the hands of “mafia and smugglers” — is to be nationalized.
The moves shore up Chavez’s plan to end the “dictatorship” of the US dollar, as he calls it, and feed his ongoing war of words and ideology with Washington as elections loom in less than a year.
“The Yankees are broke,” Chavez said from the balcony of his Miraflores presidential palace as he celebrated his birthday in August. “They have no money to pay their debt ... Shall we give Obama a loan?” the president asked the gathered crowd.
What they have in gold reserves is irrelevant.
This “nuke” is nothing more than a fart and no doubt is pushed by the folks peddling gold..
....Coming to a country near you!!!!
Argentina?
They steal the land and you’d never see it again, and don’t think you can just seize a ship or anything
:p
Any country that will do this will also expropriate [or tax away] foreign holdings at the drop of a sombrero. I'd think twice [or maybe three times] before conducting any affairs in Argentina.
“Venezuela holds 365 tons of gold abroad, in the form of around 17,000 standard 400-ounce bars”
Should check a few to see if they are truly gold and not tungsten
What they have in gold reserves is irrelevant.
This “nuke” is nothing more than a fart and no doubt is pushed by the folks peddling gold..
It may not be a "nuke" for the rest of the world, but for Venezuelans it certainly is.
Everything you buy that isn't made in Venezuela just doubled in price and you won't be able to buy much anyway because your savings have just been cut in half.
It tells what members of the upper class who remain to leave for Miami today and makes paupers of the middle class who can't afford to.
The devaluation will devastate businesses who must import a large amount of their capital equipment. They simply won't be able to afford it. Their plants will begin to rot from lack of maintenance and productivity will fall as a result.
It's productivity because of capital investment that raises living standards. Chavez has just made sure that living standards will fall.
Hugo the Marxist believes the same economic tripe that motivates Ben Bernanke. He's just providing us an example of what happens when Helicopter-Ben's policies are speeded up by five years or so.
This is a disaster for Venezuela.
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