The people of Venezuela are currently suffering from triple-digit inflation and their bolívar fuerte (“strong bolívar”) currency isn’t worth 0.10 US cents at the moment, according to Bloomberg. As the country approaches hyperinflation levels, buying everyday items (when available) takes so many bank notes businesses have abandoned counting and starting weighing money instead. Boxes and bags of bills are becoming a nuisance to shop owners who have to find places to store the currency.
Venezuela’s real inflation rate is shrouded in mystery, given that the government rarely releases any official numbers. Some estimates have it between 200% to 1,500%.
The Venezuelan government is scrambling to find a practical solution, asking private currency companies to expedite orders for larger denominations before the Christmas season brings employee bonuses, ATM withdrawals, and increased commerce.
Exacerbating the situation is that 40% of Venezuelans have no bank accounts and a third of workers are paid in cash. With so much currency being stirred about the country, it would seem like getting cash would be fairly easy, but that’s not the situation. In fact, the Venezuela’s central bank released a study showing a decrease in overall ATMs available. The bank machines that once were stocked every few days are now being replenished with replacement bolívars every few hours to meet demand.
Venezuela’s inflation is a good cautionary tale. It’s a story whose moral puts most of the blame on bad monetary policies, currency depreciation, and regulation of the free market. In 2013, the government depreciated its currency to a third of the original value in order to lower export costs and strengthen domestic business. In turn, increased taxes would help the Venezuelan government narrow a budget shortfall.
By making imports more expensive, the government motivated consumers to buy domestic products. However, it also ensured the country was exporting more and importing less, which reduced the supply of products to buy while simultaneously increasing the quantity of money consumers had to purchase them. Currency devaluation may appear to protected domestic businesses, which feel less pressure to compete, but it also increases material costs, with the net result being reduced production. As the supply of goods falls while the supply of currency to bid for them rises, prices have nowhere to go but up.
Devaluing the strong bolívar against the dollar has halted the import of many products the Venezuelan people depend on to live. US manufacturers have little incentive to trade against such a devalued currency. It’s also helped drive the US dollar out of the country altogether, which has also lead to product shortages in basics like toilet paper, rice, and coffee. Read More: http://schiffgold.com/key-gold-news/venezuelans-awash-cash-nothing-buy/
Even the Washington Post that in general believes in the Marxist/Socialist policies that have been put into practice in Venezuela, just as many if not most in the Obama Administration do, now admits its been a total failure. So in this article they used deceptive codes words for it:
THE POLITICAL drama in Venezuela, where a populist, authoritarian government is attempting to cling to power despite losing a legislative election by a landslide, tends to obscure a deeper crisis. Though it is awash in oil, the country of 30 million people is facing an economic collapse and a humanitarian disaster.
Venezuela already suffers from the world’s highest inflation rate — expected to rise from 275 percent to 720 percent this year — one of its higher murder rates and pervasive shortages of consumer goods, ranging from car parts to toilet paper. Power outages and the lack of raw materials are forcing surviving factories and shops to close or limit opening hours. According to a local survey cited by the Economist, the poverty rate is 76 percent, compared with 55 percent when Hugo Chávez, the late founder of the regime, took power in 1999.
Worst of all, the country is running desperately short of food and medicine. Venezuelans spend much of their time waiting in lines outside stores, but increasingly the shelves are bare. The head of the nation’s pharmaceutical association recently appealed to the World Health Organization for aid, saying that distribution of 70 percent of basic medicines was disrupted. The chairman of the largest domestic food producer has said that if the government does not quickly seek aid to import food, it “will cause grave harm to ordinary Venezuelans.” Read More https://www.washingtonpost.com/opinions/inflation-poverty-food-shortages-venezuela-heads-toward-disaster/2016/02/11/10aad5b4-d035-11e5-88cd-753e80cd29ad_story.html
And “We Are Change” has done a superb on the ground documentary, which is a must see, on Venezuela. They point out that “Socialism” is what has destroyed Venezuela.
Even further they are so brave to say that the Venezuelan disaster is what Bernie Sanders wants for America. This is amazing as “We Are Change” has supporters such as Abby Martin, who are pro Marxist.