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Six more zeros are to be removed from Venezuelan currency
- londgine 5y agotoo bad, I was hoping to add a Bolivar alongside my 100T Zimbabwe dollar
- MattGaiser 5y agoAt this point the most lucrative thing to do with Bolivars would be to sell them on eBay. I am sure plenty of economists would be interested in a stack of them in a box.
- jcun4128 5y agoOr handbags, I thought they were picking up crypto or still not happening Could see the technical implications, also the random price swings
- D-Coder 5y ago"Three currency reconversions since 2008 have resulted in the elimination of 14 zeros from the local currency. Venezuela will thus become the Latin American country to have eliminated the largest number of zeros from its currency, while the country has been going through a de facto dollarization for months. Analysts believe transactions in dollars make up for at least 70% of the country's operations." Three zeros in 2008, five in 2018, six more now. More on what this is like for ordinary Venezuelans at https://www.huffpost.com/entry/venezuela-new-currency_n_6156fc79e4b050254231f042 https://www.huffpost.com/entry/venezuela-new-currency_n_6156...: "Under the old system, a two-liter bottle of soda pop could cost more than 8 million bolivars."
- Yenrabbit 5y agoNot a fun situation to be in. We (Zimbabwe) took off something like 25 zeroes (3, 12 then 10). Dollarization was the only sensible option for anyone wanting to buy things with a currency that didn't devalue daily. Unfortunately a 2-currency system like this is ripe for exploitation, especially once the government starts trying to manipulate exchange rates. Thanks for that article.
- nverno 5y agoDid the government still bother to collect taxes, and did they accept US dollars instead?
- groundthrower 5y agoI cycled into Zimbabwe sometime 2008 and exchanged one usd to 500.000.000 Zim dollars. One week later I left the country and it had increased to 1.2 bn. The shops were almost empty - except for large quantities of Heinz ketchup.
- number6 5y agoWere you able to repay debts with the inflated money?
- dzonga 5y agoas a Zimbabwean too, I wish the best of luck to Venezuelans. the hyper-inflation era, was rough. prices changing every 30 mins. people stopped counting money, it was about how thick it looked while boarding public transit. But yeah Venezuela need to get off the 2 currency system as it's prone to manipulation. I wonder, how it will work for them though, since they're under massive sanctions from the US
- bserge 5y agoVenezuela's situation is just sad. Produces less than half of the food it needs to sustain the population, the vast majority of exports are oil (which has crashed in price) and some other natural resources. A recipe for disaster. No one needs their currency, not even the pathetic internal market, they can't get foreign currency because exports are low (esp. for a country of 30 million). Wat nou?
- fighterpilot 5y agoYet another attempt at socialism bites the dust. Sad that there's still so much denial among Western intelligentsia and sad there's no accountability for the scum foreign leftists that helped foment this humanitarian tragedy (e.g actor Sean Penn)
- keneda7 5y agoI believe they have the largest oil reserves in the world (over 15% of the worlds reserve). I also believe Venezuela was in dire straights long before oil crashed. Quite honestly their government is massively to blame. After a certain leader passed away they went downhill very fast.
- confused1 5y agoHow is it possible that the HackerNews crowd isn’t aware of US sanctions?
- imtringued 5y agoThat would ruin the "government incompetence caused hyperinflation" narrative because people want to laugh, be smug and feel superior. If people knew that e.g. the Weimar Republik hyperinflation was caused by external factors like war reparations then they would have to understand that hyperinflation is more than just "printing money".
- tim333 5y agoThere have been major sanctions since 2017 while "Inflation rates became the highest in the world in 2014 under Nicolás Maduro, and continued to increase in the following years"
- newyankee 5y agoI am assuming most of the local economy as it stands now must be working on barter
- gamegoblin 5y agoIt’s working on more stable foreign currencies, mainly the US dollar.
- kungito 5y agoMy guess would be that bartering works on a smaller inventory but once you have too many products you need a universal currency
- imtringued 5y agoIt works on a large scale too but it requires centralization and a unit of account: https://www.thebalancesmb.com/what-is-barter-exchange-398141 https://www.thebalancesmb.com/what-is-barter-exchange-398141 The account balance is similar to having money but you can't take money out of the exchange. It's tracking "debt" or IOUs (I owe you).
- gostsamo 5y agoThis is horrible and it is even more horrible how people consider it a joke. For millions of people this means poverty, uncertainty, and suffering. Sitting smirking on the outside and feeling good that you are not there is morally rotten. At least have some respect for the tragedy this is. And honestly, the first who blames it on the victim better never know how much they are wrong.
- google234123 5y agoYep, there is no blame to go around, this entire situation is no different than a tragedy like a natural disaster... Or maybe the rest of us can learn something about socialism from this.
- amanaplanacanal 5y agoIt doesn’t require socialism to hyperinflate your currency. Anybody can do it.
- JumpCrisscross 5y ago> the first who blames it on the victim better never know how much they are wrong Mocking the situation helps nobody. But Venezuelans had fair and free elections not that long ago. The precursors to these policies were wilfully elected into office by the populace. That confers at least some responsibility; more than in the cases of kings, colonisers, invaders or revolutionaries.
- jeromegv 5y agoElections in Venezuela have been fraudulent for decades now.
- google234123 5y agoNot extremely fraudulent, the gov still has a very large base . In 2017 70% of the population supported socialism: https://venezuelanalysis.com/news/13251 https://venezuelanalysis.com/news/13251
- rkagerer 5y agoI'm confused. Is the 1 bolivar bill in your hands now actually 1 million bolivar? Or are they printing new bills and you can exchange your 1 million old bolivars for one shiny new one?
- loeg 5y agoThe latter.
- drno123 5y agoI lived through the same extreme inflation in Yugoslavia in the 80s. It was very bad. Good luck to people in Venezuela :( Yet, I cannot ignore the fact that both Yugoslavia and Venezuela, otherwise very different countries, had the same political/economic system that lead to the inflation.
- rapind 5y agoSanctions?
- helge9210 5y agoSanctions are imposed to cut access to the investment money and to markets to sell produced goods. No need to impose sanctions if major market and investor (USSR) just collapsed.
- rapind 5y agoThis post is full of pitch forks aimed at the socialism bogeyman. It’s a bit more nuanced. I’m not going to defend that prick Maduro, however oil prices and sanctions haven’t helped their situation.
- desine 5y agoTurns out there's a cost to guaranteeing a certain quality of life, without requiring the productivity that was previously needed to secure it. Capitalism has its faults, but for the day to day management of a population, rewarding those who produce goods is a pretty logical baseline for economics
- rapind 5y agoI’m not arguing socialism or capitalism is great. I’m saying their crisis isn’t socialism in a vacuum, and lack of nuanced discussion in favour of capitalism vs socialism is getting kind of old. It’s like thinking a program you wrote only has one bug.
- silisili 5y agoGuys, maybe socialism failed, and maybe you can laugh because you knew, or we all knew. But the fact is millions are starving and suffering. This is no time for 'i told you so.' The suffering people didn't choose this.
- nradov 5y agoWhat? Chavez and Maduro were democratically elected. The people absolutely chose this. Elections have consequences.
- spockz 5y agoDoes socialism preclude having democratic elections? I thought socialism was at its core more about how to shape policies than the method of statecraft.
- namdnay 5y agoThey mean that the citizens of Venezuela are not innocent victims in all this, they have a share of responsibility as they elected the idiots who drove the country into the ground
- deleted 5y ago[deleted]
- redis_mlc 5y ago> Does socialism preclude having democratic elections? Yes, it does. Marx: "Socialism is just one step away from Communism." There's no Communist country with more than one party.
- silisili 5y agoIf Trump had gotten the US into nuclear war or some other devastation, would you still feel the same if other countries laughed and said we deserve it? Even if less than half than less than half of the people elected such a leader? There's still a large amount of people who didn't vote for these people affected. And even if all 100% signed up and voted for these people, I still don't feel it helps to rub their suffering in their face.
- ArtTimeInvestor 5y agoAccording to modern monetary theory, money is just a means for the government to incentivize behavior. The government prints as much of it as it wants, and: 1: Gives it to people who need it (Say to pay rent for their shop so the shop does not go out of business). 2: Takes it from rich people who otherwise would just sit on their ass and let others work for them. Why does this system of subventions and taxes not work in Venezuela? Why is inflation a problem when money is just a number. Why does it matter how many zeros a price has?
- darthvoldemort 5y agoBecause they issue a lot of debt in USD. They can't print their way out of debt the way the US can and does.
- ArtTimeInvestor 5y agoWho issues it? The government? If so, who lends those Dollars to the government?
- refurb 5y agoMy understanding is the government would sell debt and get USD in return. When the debt matured, the bond owner would get USD in return. USD bonds are more attractive since they remove the exchange rate risk, but as happened, the government could t repay the debt in USD.
- JumpCrisscross 5y ago> they issue a lot of debt in USD Nobody wants bolivar-denominated debt. Because Caracas keep printing. The U.S. dollar has no divine right to being infinitely valuable.
- drfxyjhdyfrhgc 5y ago>The U.S. dollar has no divine right to being infinitely valuable. The U.S. dollar is often the least silly of many options.
- webreac 5y agoThe long and bloody history of American imperialism in Latin America. (https://time.com/5512005/venezuela-us-intervention-history-latin-america/ https://time.com/5512005/venezuela-us-intervention-history-l...)
- distortedsignal 5y ago> ... in the International Monetary Fund's (IMF) assessment, hyperinflation will reach 5,500% by the end of 2021... This might scare me more than the rest of the article.
- bitzlab 5y agoThis thing is a good game to play for the ones feeding themselves with other people's suffer. Yes, I am talking about politics and even more .. https://natrmd.com https://natrmd.com The delimitation between poor and and the rest of the world will be more visible, plenty civic disorders will start to get generated. .. oh.. This is evolution by invoking the involution!
- jl6 5y agoVenezuela’s economic woes dropped out of my regular news sources 2-3 years ago, back when the story was also hyperinflation. What happened since? Did they manage to achieve a kind of relative stability in the Bolivar’s value, which is now starting to inflate again?
- paxys 5y agoAt what point do you stop adding zeros and just declare the currency dead?
- toast0 5y agoHistorically, usually when the printing press runs out of supplies and the bills you're printing can't get you more.
- helge9210 5y agoInflation in Ukraine was around 10000% in 1993, because government really liked to print local currency (taxes and fines were still nominated in ECU). Everyone just switched to $, until more or less healthy economy formed and old currency was was replaced with the current one. "Healthy economy" are the keywords here. Most Venezuelans were too happy when army seized inventory of major retailers . Running out of other people money is an inevitable end of socialism.
- praveen9920 5y agoSaw some articles that Venezuela has cheap electricity and is betting on crypto “petro”. Not sure if they can ask foreign retail investors to invest in it but I am assuming that investment in that coin is much better than worthless coins out there. Im not an economist or anything but probably a way to help their economy rather than giving as charity?
- deleted 5y ago[deleted]
- TMWNN 5y agoFor those curious about the societal effects of hyperinflation, let me once again recommend Arthur R. G. Solmssen's A Princess in Berlin (<http://www.acamedia.info/literature/princess/A_Princess_In_Berlin.htm http://www.acamedia.info/literature/princess/A_Princess_In_B...>) (1980), which covertly offers a crash course in early-1920s German political and economic history—including many details of the societal effects of hyperinflation—amidst a very sweet love story.
- BenoitP 5y agoCryptocurrencies really do need no zealots when some governments continue acting like this. It is really sad for the all the electricity wasted as a result. I wonder what's the real impact. Is there an indicator somewhere about Venezuelan use of cryptocurrencies?
- redis_mlc 5y ago> Cryptocurrencies really do need no zealots Yet here we are.
- sysihyk 5y agoMarxism Kills Death, Starvation and Destruction