A bit more background on how Venezuela got here: http://www.nytimes.com/2015/03/07/opinion/francisco-toro-dorothy-kronick-venezuelas-currency-circus.html http:

A bit more background on how Venezuela got here: http://www.nytimes.com/2015/03/07/opinion/francisco-toro-dorothy-kronick-venezuelas-currency-circus.html http://www.nytimes.com/2015/03/07/opinion/francisco-toro-dor... In 2003, a beleaguered President Hugo Chávez imposed currency controls to try to hold down inflation and prevent a speculative run on the Venezuelan bolívar. Over the years that followed, these controls evolved into the byzantine tiered system by which the government’s oil dollars are sold at three different official prices — while hard-currency dollars fetch a fourth, higher price on the black market. An importer who pledges to purchase basic necessities to bring into the country can buy a dollar for about six bolívars. But walk up to a bank teller and the same dollar costs 178 bolívars: nearly 3,000 percent more. For the 264 bolívars that it cost at the time of this writing to buy one black-market dollar, you could buy 42 dollars at the official rate. The system gives rise to a mind-bending tangle of economic distortions. By one calculation, with a single $100 bill exchanged at the black market rate, you can buy enough subsidized gasoline in Venezuela to drive a Hummer around the world 28 times. A new Toyota Corolla retails for about 1.9 million bolívars — that’s either about $300,000 (at one exchange rate) or around $7,200 (at another), take your pick. As in our fable, the exchange-rate regime creates huge incentives for importers to pocket their cheap dollars rather than bring in goods — and that gives rise to lines. Long lines. For all the basics. Alongside scarcity, a new specter — or rather, an old one — has emerged. For the last two weeks, the bolívar has been in free fall, evoking fear of devastating hyperinflation ...