One culprit behind Venezuela's hyperinflation is their multiple exchange rate program. They have 3 official exchange rates levels, with the most favorable two r

One culprit behind Venezuela's hyperinflation is their multiple exchange rate program. They have 3 official exchange rates levels, with the most favorable two reserved for government prioritized imports, like food and medicine, and the third acts as the supposed general rate for all other products. However, the third rate is not always available so a fourth, 'black market' rate has emerged, which is higher than any government rate. So the import lifecycle is this: (1) Political insider secures import contract and exchanges bolivars for dollars to buy goods abroad. (2) The goods are never purchased, but instead go 'missing' in transit. (3) The dollars, now supposedly lost to theft, are exchanged back to bolivares at a much higher rate. The rate of return on this round-trip is on the order of 1,000%. Although it's unclear how much money the government is printing and spending directly, it's this process of exchanging cash into more cash without actually bringing in any products that drives the inflation. The amount of cash in circulation skyrockets but the goods in circulation stay the same, or fall, and so prices need to rise. This process also has the devastating flaw of making it more profitable to feign the import of food than to actually do it and so the items most heavily favored for import by the administration are, in fact, in the shortest supply. https://www.bloomberg.com/news/articles/2015-02-19/venezuela-the-country-with-four-exchange-rates https://www.bloomberg.com/news/articles/2015-02-19/venezuela...