Posted on 10/30/2021 8:15:33 PM PDT by algore
The Venezuelan government recently lopped off six zeros from its hyperinflating currency, the bolivar. The highest denomination currency note of 1 million bolivars, worth less than $0.25, was replaced by a one-bolivar note. At the same time, a 100-bolivar note, worth about $25.00, was introduced as the new highest denomination of the bolivar.
The currency conversion was designed to spare the government the embarrassment of having to issue a 100-million bolivar note to enable people to purchases everyday items without having to carry around bundles of notes, given that the price of a loaf of bread had risen to 7 million old bolivars.
Of course, the arbitrary scaling down of the denomination of the currency will not slow inflation, because the new currency notes can be printed just as cheaply as the old. The bolivar has already lost 73 percent of its value in 2021 alone and the IMF estimates the annual inflation rate will reach 5,500 percent by the end of 2021.
It is not surprising, then. that all but the poorest Venezuelans have abandoned the bolivar as a medium of exchange, let alone a store of value or unit of account. US dollars are the exchange medium of choice in Caracas and other large cities, while the Colombian peso dominates along the Colombian border, particularly in the regional city of San Cristobal.
The Brazilian real is current along the southern border with Brazil and the euro and cryptocurrencies have also found niche uses.
What is wonderfully surprising is the spontaneous emergence of a pure gold currency in a remote region of southeastern Venezuela around the towns of Tumeremo and El Callao. The region abounds with precious metal ores and has a long history of luring prospectors and miners seeking their fortunes.
Today, however, many of the larger mines are controlled by the government military, which is battling local gangs and guerillas. Despite the violence and lawlessness, jobless Venezuelans from far and wide are flooding into the area to work in thriving illegal mines in exchange for payment in gold nuggets.
As a result, gold flakes, which are peeled off raw nuggets with hand tools, have become the currency of choice in the region with prices for commodities and services quoted in grams of gold. Half a gold gram buys you a one-night stay in a local hotel, while a meal for two at a Chinese restaurant and a haircut will cost you a quarter of a gram and an eighth of a gram, respectively.
The gold flakes are carried in people’s pockets—usually wrapped in the nearly worthless bolivar notes. While some shops are equipped with scales to weigh the gold flakes, most sellers and their customers have become so familiar with the flakes that they evaluate them by sight
you would think they never heard of bitcoin.
Sheesh
With oil as high as it is? Hmmm?
Bkmk
Oil prices are not about available resources but because of bottlenecks induced into the market.
Knock six zeroes off, why haven’t Democrats thought of that?
I randomly saw this a while ago
https://silverbackpreciousmetals.com/shop/
they slice up silver bars..
you could use a pair as bookends or something maybe
They can’t reach their shitty oil. They stole all the equipment, rigs, … from international companies. Put their idiot cronies in charge and destroyed the free money maker. Communist can ruin a free money maker.
They owe china big time and have to say back the billions in oil
History repeats, again. Paper currency is for spending, gold is/ has been used for centuries to preserve wealth.
True that entirely!
Yellin’/BiXiden bringing this krapola to the US.
Funny, I thought of that as a business venture maybe 10-15 years ago. Then I thought “who would accept a non-stamped/ non-pedigreed bar even if it had the profile (as the URL shows) of being sliced out of a 1000 oz Comex-acceptable bar? (I wouldn’t. You want to sell me a 10 or 100 oz bar, it’s stamped Sunshine or RCM or Englehard or J-M or Silvertowne or even APMEX) And the aspect of being fake has only gotten worse, astronomically, over time)
There is NOTHING you can do with PMs that does not have significant friction associated with it. Any time you TOUCH these metals, there is a 3%-5%-10% or more hit you take.
It does seem that you almost always take a hit.
I thought about making some kind of poured objects, I may still do that someday since I have a furnace and stuff.
Maybe I can make profit ?
I guess there are always gold dipped tungsten bars if that fails.
I think when your economy totally collapses and the currency becomes worthless, as in Venezuela, you tend to become a little less picky about whether a gold or silver flake is precisely the claimed weight. “Close enough” is infinitely better than accepting the worthless paper money.
This story should give people a lesson if that situation should come here, and the trend doesn’t look promising that it can’t. Gold works in power outages too, bitcoin fans.
If I have a One Bolivar note, it's worth a million times what is was worth yesterday?
Not likely. I assume they redesigned the note, changed color, or something so you can't swap old notes for new one-to-one.
What about electronic money (like in a bank account)? Did they just chop off six zeroes, like your bank statement was 10 million yesterday and 10 bucks today?
That's pretty harsh.
Pamp bars and Kruggerands don’t seem to have premium that other coins do. Once I bought a good quantity in shot silver and kept it in the apmex bag and I think I only took a .50 cent hit vs spot. These guys are fair traders.
Peruse later.
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