A man displays the one million bolivar banknote alongside a $50 one, which is worth about 200 times more Federico PARRA AFP
Posted on 08/07/2021 3:58:29 AM PDT by Oldeconomybuyer
Caracas (AFP) - Working at her vegetable stall in Caracas, Marisela Lopez wonders what she's going to do with the sudden flood of cash customers have been unloading on her.
Venezuela announced Thursday it would knock six zeroes off its currency -- the third time in 13 years it has redenominated the bolivar.
Faith in physical bank notes is at an all-time low, and people want rid of them.
"We also have to quickly get rid of the cash because if we keep collecting the cash, what next? What will we do with the banknotes?" said Lopez, 34.
The new measure, which will go into effect in October, is the result of the world's highest inflation: almost 3,000 percent in 2020.
That has created wild price swings and a move towards the US dollar, increasingly favored by customers and businesses alike in the country of 30 million.
"No (local) cash ever came in here, just foreign currency. Now, I don't know where all this money has come from," exclaimed Carmen Ramirez, 48, who works just meters (feet) away from Lopez in the Catia market in western Caracas.
As it is in Venezuela, piles of money are barely enough to buy a few vegetables or a few kilograms (pounds) of meat.
Purchasing power has been decimated by four years of hyperinflation and eight years of recession.
Few people can afford to deposit their notes in a bank.
(Excerpt) Read more at france24.com ...
A man displays the one million bolivar banknote alongside a $50 one, which is worth about 200 times more Federico PARRA AFP
Bernie’s dream.
Hmmmm, didn’t something like a wheel barrow of money being needed to buy a loaf of bread happen just before some really bad war occur just last century? Well here we go again.
My family lived in Venezuela from 1957 to 1960 when my US Army father was an advisor to the Venezuelan Army. At that time the Bolivar was pegged at 3Bs=$1.00 and Venezuela was near the top, due to oil wealth, of the developing world. It was an active target of International Communism with an active domestic CP and many coup attempts.
This was the environment that VP Richard Nixon encountered when his 1958 South American Goodwill visit became a battle zone for his autocade into the capital of Caracas. It also became the setting of the climax to John Wayne’s 1968 movie, “The Hellfighters”!
Venezuela, like most South American and 3rd World countries, has never solved the representative government riddle and the endemic rich-poor gap. That left it with a constant threat of internal & external coups and a populace distrustful of their government, jealous of their own rich and a bitter resentment of the US oil companies that were ‘draining’ their wealth.
This was the setting that elected (then) Colonel Hugo Chavez (1953-2013) to the Venezuelan Presidency in 1999. With his strident anti-USofA policies and his equally strident pro Communism that he labeled as ‘Socialismo’, he and his 2013 successor, Nicholas Maduro, have systematically taken all freedoms from its citizen except the right to starve! With the international support of Cuba, China, Iran and Russia PLUS various LEFTists from many countries, including Hollyweird & DC, Venezuela is a total military dictatorship with a very wealthy & privileged elite running everything (into the ground).
Because Venezuela has long ceased to release economic data to the IMF and other world data aggregators, about the only measure of its economy is its currency. As may be expected, it is hard to see what the Bolivar is actually worth as it has no outside market comparison. It appears that, by the pre-devaluation rate, $1.00 = 248,488 VEF Bolivars.
Socialism much? This report is from the French equivalent to CNN (I believe), where is our own vaunted MSM Media? Our ‘educated youth’ (by the NEA & AFT & LEFTist academics), very likely could not even find this country on a map! Ask one of the previously enthusiastic supporters from the known suspects and, if they even bother answering at all, it will be that ever repeating idiocy, “They didn’t do it right! We will succeed next time!” BAH!
Is nobody in the U.S. govt (including the GOP infrastructure traitors) watching what's going down in Venezuela?
The result of socialism.
A country needs as many people working as productively as possible for as long as possible. Failure to do this gives government an excuse to issue currency with no value, stealing from people who have some currency that actually has some value.
Of course the ruling elite has nothing to worry about. It gets real goods, real services and lives high off the hog, unlike the ordinary herd that it scorns.
Simplified version for democrats:
Socialism is taking money from working people. Socialism leads people to work less, and to take more from those who do work. Government should encourage people to work and remove obstacles for them to work. Instead, government issues money with no backing. The highly-placed politicians live in luxury and aren’t affected by inflation.
When I lived in Venezuela (Pre Chavez) the Bolivar was pegged to the American Dollar. It was a solid currency then.
Why don’t they just use a credit card?/sarc
The rule of thumb among the hard-money advocates is that a country can devalue like that three times before confidence in the currency is totally destroyed, then throws in the towel and goes to a gold-backed currency.
Venezuela has it's gold reserves stored in the UK, who won't give it back, saying the regime is invalid. The current thinking is that the UK no longer has the gold and are wrapping themselves in virtue to hide the fact.
Contrary to the recent pounding that has gone on in the manipulated gold and silver markets, foreign central banks are loading up on gold - Brazil being the latest with an 80 tonne buy.
Here's an article from 2018 on how the Venezuelans are using gold to cope. Americans take note.
Sell them on eBay - will be worth more like those Zimbabwe dollars which are going for upwards of $200.
“What will we do with the banknotes?” said Lopez, 34. “
Wasn’t there a shortage of toilet paper there?
“The exchange rates of German currency dropped from nine marks to the dollar to 4.2 billion marks to the dollar when hyperinflation hit the country in 1923.
The conditions were so horrible that once a worker was robbed carrying billions of marks in a wheelbarrow, his wages of several weeks. The thieves stole the wheelbarrow and left the worthless wads of cash on the street.”
“It was an active target of International Communism with an active domestic CP and many coup attempts.”
I remember those days. Every few weeks we would hear of an oil pipeline being blown up.
About that time a load of buried firearms was found on the beach. No military crest, but a ground off spot where a crest would be. A quick chemical test brought out the Cuban military crest.
***Venezuela has it’s gold reserves stored in the UK, who won’t give it back, saying the regime is invalid. The current thinking is that the UK no longer has the gold and are wrapping themselves in virtue to hide the fact.***
I read the same thing about Socialist Spain in the 1930s sending their gold reserves to the USSR for safekeeping, where it conveniently disappeared when Franco took over Spain.
“Venezuela, like most South American and 3rd World countries, has never solved the representative government riddle and the endemic rich-poor gap.”
Sounds like they’ve finally solved the rich-poor inequality gap. The evil rich (ie, the producers) have been exterminated. Now they’re all equal in misery.
Tocqueville had it completely right...
” There is, in fact, a manly and lawful passion for equality which excites men to wish all to be powerful and honored. This passion tends to elevate the humble to the rank of the great; but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level, and reduces men to prefer equality in slavery to inequality with freedom.”
Madero explained that they didn’t have inflation because what cost 100 million bolivars last week only costs 100 bolivars this week……
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