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Few in Venezuela Want Bolívars, but No One Can Spare a Dime (NY Times)

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P

Piecake

Member
CARACAS, Venezuela — Pity the bolívar, Venezuela’s currency, named after its independence hero, Simón Bolívar. Even some thieves do not want it anymore.

When robbers carjacked Pedro Venero, an engineer, earlier this year, he expected they would drive him to his bank to cash his check for a hefty sum in bolívars — the sort of thing that crime-weary Venezuelans have long since gotten used to. But the robbers, armed with rifles and a grenade, and sure that he would have a stash of dollars at home, wanted nothing to do with the bolívars in his bank account.

“They told me straight up, ‘Don’t worry about that,’ ” Mr. Venero said. “Forget about it.”

The eagerness to dump bolívars or avoid them completely shows the extent to which Venezuelans have lost faith in their economy and in the ability of their government to find a way out of the mess.

A year ago, $1 bought about 100 bolívars on the black market. These days, it often fetches more than 700 bolívars, a sign of how thoroughly domestic confidence in the economy has crashed.
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The International Monetary Fund has predicted that inflation in Venezuela will hit 159 percent this year (though President Nicolás Maduro has said it will be half that), and that the economy will shrink 10 percent, the worst projected performance in the world (though there was no estimate for war-torn Syria).

Even as the country’s income has shrunk with the collapsing price of oil — Venezuela’s only significant export — and the black market for dollars has soared, the government has insisted on keeping the country’s principal exchange rate frozen at 6.3 bolívars to the dollar.

That astonishing disparity makes for a sticker-shock economy in which it can be hard to be sure what anything is really worth, and in which the black-market dollar increasingly dictates prices.

A movie ticket costs about 380 bolívars. Calculated at the government rate, that is $60. At the black-market rate, it is just 54 cents. Want a large popcorn and soda with that? Depending on how you calculate it, that is either $1.15 or $128.

The minimum wage is 7,421 bolívars a month. That is either a decent $1,178 a month or a miserable $10.60.

Either way, it does not go far enough. According to the Center for Documentation and Social Analysis of the Venezuelan Federation of Teachers, a month’s worth of food for a family of five cost 50,625 bolívars in August, more than six times the minimum monthly wage and more than three times what it cost in the same month a year earlier.
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Things get stranger by the day.

Need a new car battery? Bring a pillow, because you will have to sleep overnight in your car outside the shop. On a recent night, more than 80 cars were lined up.

Want a new career? Plenty of Venezuelans have quit their jobs to sell basic goods like disposable diapers or corn flour on the black market, tripling or quadrupling their salary in the process.

Need cash? O.K., but not too much. Some A.T.M.s limit withdrawals to the black-market equivalent of about 50 cents.

Given the chronic shortages of basic goods, supermarkets and pharmacies fill long rows of shelves with a single product. One store recently had both sides of an aisle lined with packages of salt. Another did the same thing with vinegar. A pharmacy had row after row of cotton swabs.

But among all the shortages here, one of the most notable is a shortage of paper money, especially the coffee-colored 100-bolívar notes that are the largest in general circulation (black-market value, about 14 cents) and feature a portrait of Simón Bolívar.

“You want to understand why there’s a lot of money and there’s no money?” Ruth de Krivoy, a former Central Bank president, asked with a rueful laugh. She said the main problem was that the government had failed to respond to rapidly rising prices by issuing larger-denomination bills, like a 1,000- or 10,000-bolívar note. So people need many more bills to buy the same goods they bought a year ago.
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http://www.nytimes.com/2015/10/19/w...ant-bolivars-but-no-one-can-spare-a-dime.html

Man, you know things are fucked up when thieves don't even want your money.
 
J

JDSN

Banned
jabuseika said:
When does the revolution start?
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You are seeing it, not happy with owning the military the goverment gave a bunch of guns to criminals, told them all their suffering was because of anyone that owned a bolivar more than them and looked the other way when the unilateral killing began.
 
F

Frozenprince

Banned
JDSN said:
You are seeing it, not happy with owning the military the goverment gave a bunch of guns to criminals, told them all their suffering was because of anyone that owned a bolivar more than them and looked the other way when the unilateral killing began.
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Yep, there will be no happy ending in Venezuela. The military runs half the country, the para-military runs the other half. And the people are trapped and forced to watch their home be turned into shit.
 
U

Usobuko

Banned
Some of the rates mentioned here are insane if you are sensitive to approximation.

Like it used to $1: 100 Bolivars which rise to $1: 700 Bolivars in just one year.

Then, the government frozen the exchange rate to $1: 6.3 Bolivars ( this act must be executed more than 1 year ago before it climbs to $1:100 last year ).

This must have suck for Venezuela citizens.
 
I

ibyea

Banned
The most annoying thing is Maduros blaming "economic warfare" or whatever crap he feels like saying to deflect responsibility of the PSUV government in creating this situation.
 
R

Rudimental

Member
Walpurgis said:
Why did the government freeze the exchange rate to something so low? How do they benefit from this?
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I guess they were probably spooked by the possibility of this:

VQRWtZR.jpg


He is holding less than $5
 
P

patapuf

Member
ibyea said:
The most annoying thing is Maduros blaming "economic warfare" or whatever crap he feels like saying to deflect responsibility of the PSUV government in creating this situation.
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Is that still working?

Is there any chance he wouldn't win an election or are they so rigged that this isn't a possibility?
 
S

siddx

Magnificent Eager Mighty Brilliantly Erect Registereduser
My sister lives in Venezuela and recently while returning from a trip she found that someone at the airport had stolen all her toiletries, both new and used. Half used deodorant sticks and old razors with hair in them. Used toothbrush, half empty tube of toothpaste. Just jacked it all. When your economy is so bad that people have to steal used deodorant you know something needs to change.
 
T

Ty4on

Member
C

Coriolanus

Banned
patapuf said:
Is that still working?

Is there any chance he wouldn't win an election or are they so rigged that this isn't a possibility?
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From what i could dig, seems the venezuelan elections are surprisingly legit. Dudes welcome international observers and have 80%+ attendance.

Some bitching about the party in power using the state apparatus to facilitate their campaign, but thats par for the course for south america.

Maduro barely won in the last election, when the situation was far better. Cant quite see him winning the next one.
 
X

xRaizen

Member
Coriolanus said:
From what i could dig, seems the venezuelan elections are surprisingly legit. Dudes welcome international observers and have 80%+ attendance.

Some bitching about the party in power using the state apparatus to facilitate their campaign, but thats par for the course for south america.

Maduro barely won in the last election, when the situation was far better. Cant quite see him winning the next one.
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Didn't he put the Opposition leader in jail? I could hardly call that legit..
 
S

skynidas

Banned
The parliamentary elections are on december 6th, they're probably going to get destroyed on that one. But sadly, that won't make any difference, the one that matters there is the Presidental Election, and that's on 2019, so yeah, Venezuela is fucked.
 
C

Coriolanus

Banned
Piecake said:
Pretty sure the answer is corruption.
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Its corruption allied to gross incompetence. Brazil tried something similar in the late 80's and very early 90's. Crashed and burned there too. Mostly gross incompetence, tbh. Were they not ridiculously incompetent, they'd find a way to milk the system without crashing and burning.
 
I

ICKE

Banned
skynidas said:
The parliamentary elections are on december 6th, they're probably going to get destroyed on that one. But sadly, that won't make any difference, the one that matters there is the Presidental Election, and that's on 2019, so yeah, Venezuela is fucked.
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There will be an uprising before next spring at this rate, you can forget about 2019. Socialism didn't work so perhaps a fascist military junta is the next option. The country is gone.
 
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