Article

2018-03-24 Caribbean-Latin America

Venezuela hopes to tackle the world's worst inflation by deleting zeros from its currency

Genius, Nick! It's JUST that easy!
[WashingtonPost] Economic pledges may be par for the course in election campaigns, but in hyperinflationary Venezuela, the candidates' dueling promises are going further, with the incumbent vowing to lop a few zeros off the currency, while his main challenger calls for the adoption of the U.S. dollar.

President Nicolás Maduro late Thursday briefly outlined his monetary rescue plan. In a country where a dozen eggs can cost 250,000 bolivars ($5) amid worsening inflation, he would chop three zeros off the currency ‐ arguably bringing the price for those eggs down to 250.
"It's 1000 times less. Instantly! Surely this is a miracle!"
"I ask you all for your prayers and support for the success of the monetary reconversion," Maduro said in a televised event Thursday night.

The move came as Henri Falcon ‐ a former governor running against Maduro in elections set for May ‐ is proposing a far more radical fix. He wants to follow the path of countries such as Ecuador and Panama by dollarizing the Venezuelan economy. Doing so, he says, would prevent the printing of new bills - instantly constraining inflation.

Socialist Venezuela is going through a crisis that has left people struggling to pay for food and find medicines. Prices are being influenced by a black-market exchange rate that rises by the day and is currently five times the nearly inaccessible official rate.

Customers are standing in hours-long lines at banks to take out a daily limit, set so low that it barely covers the price of a cup of coffee. Larger transactions are done by bank card or transfer - although some vendors are charging double for electronic payments.

Maduro's redenomination plan was met with serious skepticism by critics and analysts, who say that the impact on hyperinflation would be minimal ‐ and that the plan would be confusing. By June 2, under Maduro's plan, new bolivars with lower denominations would be circulated ‐ but old ones, with denominations as high as 100,000, would remain valid. It would leave vendors charging two prices - one for old bills, the other for the redenominated bolivar.

Salaries too would be redenominated - so little would change in terms of buying power.
"That's not how this works. That's not how any of this works"

Posted by Frank G 2018-03-24 13:16|| || Front Page|| [11136 views ] Top
File under: Commies

#1 Can I do this with my mortgage?

Posted by Anomalous Sources 2018-03-24 16:07|| 2018-03-24 16:07|| Front Page Top

#2 "where a dozen eggs can cost 250,000 bolivars ($5)"

Perfect! Before, non-existing eggs cost 250,000, now they cost 250!

All you need now is a 5 dollar note and the eggs will magically appear.

Posted by European Conservative 2018-03-24 16:25|| 2018-03-24 16:25|| Front Page Top

#3 Come on!
They are going to save ink and paper by printing nothing (0).

Posted by Skidmark 2018-03-24 16:29|| 2018-03-24 16:29|| Front Page Top

#4 When stores use scales to weigh paper currency, superfluous zeros are not the problem.

Posted by Iblis 2018-03-24 16:36|| 2018-03-24 16:36|| Front Page Top

#5 I Vet told me about using South Vietnamese currency for toilet paper... Mama-San at the local bordello was very appreciative if you showed up with a bag of soap, shampoo and toilet paper that he had bought at the PX. So many people confuse money with value.

Posted by magpie 2018-03-24 16:43|| 2018-03-24 16:43|| Front Page Top

#6 I remember 25 cents gasoline, when McD's hamburger, fries and a small drink were 15 cents each. The only difference between their economic experts and ours is time/velocity with which they devalue currency. It's not the price of things going up as the value of your money going down.

Posted by Procopius2k 2018-03-24 17:09|| 2018-03-24 17:09|| Front Page Top

#7 It's not the price of things going up as the value of your money going down.
Posted by Procopius2k

Exactly! And at the root of it all is a government that borrows yuge sums of money driving savings interest below annual inflation rates, and even lower. Banks don't need or want our deposits, they get their money at nearly no cost from the government.

Posted by Besoeker 2018-03-24 17:17|| 2018-03-24 17:17|| Front Page Top

#8 @ #6 - I think inflation has also hit the average weight of the "average American".

@ #5 - Exactly. Anything can be used as a medium of exchange. And, it has been said, that it is all about confidence (or perception). Why was gold a good $1700 a few years ago and now around $1100?

Posted by Clem 2018-03-24 19:40|| 2018-03-24 19:40|| Front Page Top

#9 MP, did the vet tell you about mama using the soap to wash the currency she got from selling her girl children?

Posted by Skidmark 2018-03-24 21:55|| 2018-03-24 21:55|| Front Page Top

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