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Soaring Stock Market Fails To Fix Venezuela's Shortage Of Food (Or Toiler Paper)
Having just missed out of +500% returns in the Caracas stock market last year, the reality of a hyperinflating world continue to cause chaos in the real world of Venezuela. As Bloomberg reports, the bolivar’s 73% decline against the dollar on the black market in 2013 is fueling contraband and worsening shortages of food and consumer goods in a country with the world’s biggest oil reserves, adding pressure on President Nicolas Maduro’s government to devalue. Smuggling to Colombia has exploded as "professional shoppers" traffic in wheat flour, corn flour and milk leaving more than one in five basic goods out of stock at any given time. Regulated foods are just too cheap to stay on the shelves, "you can't get anything in the shops here... it is taken to Colombia like a locust plague."
Venezuelan taxi driver Jose Sotomayor drives four hours through army checkpoints every week from the city of Maracaibo to buy rice in Colombia for his family at 10 times the government-set price back home.
“You can’t get anything in the shops here, I don’t even bother going to them for basics anymore,” Sotomayor, 39, said in a phone interview. “All of our food is taken to Colombia, it’s like a locust plague.”
Sotomayor hasn’t seen rice for sale in the shops of Venezuela’s second-largest city since July, as smugglers snap up the staple for a maximum of 7.2 bolivars ($1.14) per kilogram, just $0.11 at the black market exchange rate.
How hyperinflation works...
The bolivar’s 73 percent decline against the dollar on the black market in 2013 is fueling contraband and worsening shortages of food and consumer goods in a country with the world’s biggest oil reserves, adding pressure on President Nicolas Maduro’s government to devalue...
A weaker bolivar reduces Venezuelans’ purchasing power by making imported goods more expensive.
...
Under a decade-long system of currency controls, the government provides about 95 percent of dollars in the economy to selected companies and individuals at 6.3 bolivars per dollar. The exchange rate on the illegal black market is about 64 per dollar, giving foreigners and Venezuelans with access to dollars about 10 times more bolivars for their currency.
...
Which means hordes of prefessional shoppers from neighboring (non-hyperinflating) countries are taking advantage...
Price controls introduced by Maduro’s predecessor Hugo Chavez in 2003 to boost nutrition among the poor have fueled demand for staples such as flour, rice and milk as shoppers snap up products whose prices don’t change amid 56 percent annual inflation, the highest in the world.
Dozens of people take shifts to line up outside supermarkets in Maracaibo, a city of 2.1 million people located 800 kilometers (500 miles) west of the capital, waiting for the next delivery of regulated goods. The new stock is bought up as soon as it hits the shelves, leaving shops barren of products such as meat, grains and toilet paper.
The goods are then loaded onto trucks and taken to Colombia. Many of these professional shoppers are native Guajira Indians dressed in bright floral-print dresses who have double nationality and are exempt from border controls.
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More than 300 trucks with everything from rice to car tires made the 130-kilometer drive from Maracaibo to the border through eight army and police checkpoints when a Bloomberg reporter did the journey on Nov. 10. Drivers of cars carrying food pay those staffing the checkpoints anywhere from 20 to 300 bolivars for quick passage, according to Sotomayor.
“Regulated goods are just too cheap to stay on the shelves.”
Nationally, the central bank’s scarcity index was 22.4 percent in October. That reading, the highest since January 2008 and up from 16.1 percent a year earlier, means that more than one in five basic goods were out of stock at any given time.
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“It’s an endless caravan,” said Sotomayor. “The price difference is so great, no amount of soldiers can stop it.”
Still, things must be going great because the Caracas Stock Index was up 480% last year - think of the confidence-inspiration and wealth effect!!
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Just cash your stock in for paper fiat, problem solved!
Fear we are returning to a time in history where it is a common occurrence to fight for one's life?
Item 6
Purchase the items on the following shopping list to outfit your home.
· 5,000 rounds ammo for training; $2,500.
· Purchase and install Door Jamb Armor and dead bolts on all your exterior doors; $1,000 for 4 doors.
· A bullet proof vest; $500.
· Install a professional alarm system, or better if you live in the country get a big dog and have you both protection trained; $50/month.
· 12 months of food storage (2,400 cal/day) with > 20 year shelf life ;$4,500.
· If you have well water get a SimplePump. If you rely on city/municipal water, and there is not a swimming pool in your backyard, then get at least one waterbed; $1,000.
· A hand-crank emergency radio and a couple of hand-crank flashlights; $50.
· Purchase and store several cases of liquor; $500.
· If it gets cold where you live, then purchase
o A mummy style sleeping bag like a Wiggies; $250.
o At least one set of heavy wool pants and wool parka, such as Columbia's Gallatin Range ; $350.
o A pair of warm boots, wool socks, warm gloves, and a wool hat; $350.
o Two sets of Patagonia long underwear; $120.
Well, if you dont have food, you dont need toilet paper!
Cue a right-wing military coup in 3... 2... 1...
Venezuelans voted for Chavez and Maduro.
Americans voted for Obama and Biden.
We all get the governments we deserve.
I couldn't decide whether to give you and up or down vote....
We all deserve as little government as possible. We in the USA shouldn't have to suffer fromt he likes of a Biden Obama Bush or any other POS. The Law is supposed to protect us from the mob.
In Venezuela it is much the same but people are conditioned to belive that voting for your neighbors property is OK as long as you get a majority.
I've heard similar stories with their 25 cent per gallon gasoline as well. Fishing boats fill up, take it off shore to waiting barges that take it to the caribbean islands and sell it for $5-6+/gallon
Speak for yourself. I dont vote anymore for just that reason
They should import a popular toilet paper brand from Sweden: KRAPP. No shit.
They could also import... Bimbo bread and Bonka coffee from SPAIN, Dribly and Pschitt lemonade from FRANCE, the popular Bums biscuits from NORWAY, Nora Knackers crackers, Plopp chocolate, or Skum marshmallows from SWEDEN, or Kack and Kex chocolate-bars from FINLAND.
dont forget a good set of mechanics tools. because shit will break and will need fixing.
Item 8
Gain, store, and maintain the knowledge, skills, and special equipment that would enable you to do at least one third-world job. If you are a dentist, doctor, farmer, cowboy, mechanic, miner, fisherman, lumberman, mason, blacksmith, whore house piano player, plumber, butcher, or similar, then you are already set. If you are a derivatives trader, banker, realtor, healthcare administrator, politician, actuarial, benefits coordinator, DMV clerk, compliance officer, or similar, then get cracking.
whorehouse piano player !!!
The "piano" is optional. They got iPods for that.
If you're a CFP, you'd better be the "Better call Saul!" variety of shady financial and legal advisers... on how to move cash to other "jurisdictions" and have it cleansed in the process. ;-)
* http://www.rollingstone.com/movies/news/aaron-paul-and-bryan-cranston-wa...
I should keep this quiet but the marlboro adventure gear sleeping bag made by eureka with qualofill insulation is a great zero degree bag
available on ebay occasionally for under$50 I have used it in 13 degree weather all night and did fine and carhart wool heavywieght socks with goretex boots noninsulated are going to be priceless, every place that suffers a economic collapse has dislocations and if you don't have to leave town for the country someone will and they will need stuff like this.
check MSR INTERNATIONAL STOVE it is super dependable a d lightwieght can be run on gas or kerosene
i always wondered how that works. lets say i own gold mining shares. lets say inflation really starts to get out of contol. do you just hold the shares in hopes of a new currency issuance? or is there some sort of selling point near the apex of hyper inflation?
hehe if that happens you will see the most effiecent government program ever created to convert your stocks to US treasuries
They only want to 'protect' your retirement money, after all.
Where is Jimmy Carter? That evil CS'er vouched for all of Hugo Chavez rigged "elections." Before Chavez, Venezuela actually had a middle class and toilet paper plus food in the shops.
Where is Obama's little buddy Bill Ayres as well? Chavez was his friend and he sent his adopted son Chesa Boudin down to work in the Venezuelan indoctrination.... errr education system. They know that if they control the teaching of the next generation they control the future.
Same here - Common Core is simply a low-intensity indoctrination program. It will be stepped up over time, like all leftist/statist programs.
JC is a lot poorer than he was 1.5 years ago. He had 60% of his wealth in Gold, thanks to his Austrian Economics CPFs. You'd think that educated + smart people would learn to DIVERSIFY to manage risk and smooth out volatility. If he doesn't need the FRN cash (to pay bills), this may not matter to him either. In any case...
He's too long in the tooth and been too long out of the Game, to be able to sell books or make much in speaking engagements. But you never know.
Now how do you get your money out of the country?
bitcoin baby !!
"Now how do you get your money out of the country? "
Cocaine, gold, cocaine, silver, more cocaine.
Use it as toilet paper and shove it up your arse.
After having lived in Mexico for a short stint I have an new found appreciation for toilet paper. It interesting the things we take for granted.
https://pathofmusashi.wordpress.com/2014/01/07/winter-shoes/
Dumbasses, I got 200+ rolls back up in the garage.
You are so full of shit!
>> I got 200+ rolls back up in the garage.
That would last my ex-wife and her son a long weekend. I swear they think there's prize at the end of every roll.
Try supplying a home with 3 females and 2 offices with an additional 6 chicks.
My philosophy is: Stocking living essentials before wealth insurance like PMs, but I think I could easily have a mint case of Silver Eagles or Canadian Maple Leafs per month if I simply distributed a memo stating:
"Effective 1/1/2014: Personal Ass Maintenance is on you"
Run by your nearest construction site, steal a roll or two from the port o lets and tell the gals that is now the standard issue. They won't make more than one wipe before they purchase their own and bring it to work/home.
This is impossible! If Central Banks have taught us anything, it's that wealth MUST trickle down to the rest of the economy. Prosperity can be printed and the old economic model (and profits that went with it) are antiquated and no longer necessary. I don't get it. Hmmm
Maduro is one thickly-mustachioed overripe fried banana variant if you ask me.
They put a bus driver in control, we put a community organizer in control. No material difference in qualifications, or outcome.
I understand that Maduro has a shit pot plus man-cave full of monogrammed toilet paper for his use. I hear that he doesn't share either. The NSA has pictures of it.
A lesson in market distortion. Chavez had all those controls.
Wait until the US market distortion adjust.
Close your eyes for a moment and imagine being in the USA when all of those dollars we exported start coming back to the USA.
That is irresponsible advice HH. You are going to cause a lot of big gardens and pissed off livers.
What d you mean?? We are all going to be millionaires!
You mean trillionaires. And that's both the good and bad news.
I think you meant 'infinitaires'.
Central Plansters seem to be most worried about how no matter what they do, people find some way around them.
< Meh > wake me when this shit is happening in a real south american country, like Brazil. At that point I might be concerned (they do buy a lot of our produce).
http://www.4-traders.com/news/Brazil-Economists-Increase-2013-2014-Inflation-Outlook-Survey--17636248/
Time to rise and shine, LOP. As always, they will juice the numbers higher and higher.
Thanks for the info.
Damn, of course the contrarian play here is that the dollar will get "unexpectedly" crushed (no taper).
hedge accordingly.
Brazil is Argentina.
Argentina is Venezuela
Venezuela is Zimbabwe
LawOfPhysics remember this almost interview in Argentina from a Greek reporter:
"What Is Inflation In Argentina?"http://www.zerohedge.com/news/2013-04-25/thursday-humor-what-inflation-a...
When that happens in Brazil, I might be concerned. just under half milliion in sales to Brazil last year. (that's in dollars)
America has real exports, that people want to purchase.
let's see where this goes.
When #1 son used to ask, "Dad, what if stuff was free?", I would tell him, "By the time you got to the store, the shelves would be empty."
"There would be no stores" would havebeen my answer. If everything were free nobody would bother making anything.
Maybe they can make some more laws that sound really good but do nothing but hurt the people?
Can't wait to see how well our (the US) centrally run healthcare does after it really gets running.
pods
Scarcity is irrelevant to any central planner, just ask Krugman (and he is really smart, he got the nobel to prove it).
Our golfer-n-chief has a nobel piece (yes that was intentional) too, and he's still bombing the shit out of people.
Venezuela = lipstick on a pig
how's about a kiss, hmmm?
How about some heavy crude?
Fuck what do these people want? Maduro already gave them free teevees for their daily dose of propoganda. You mean to tell me they want to wipe their asses too? Next thing you know they'll expext a free phone......oh wait.
It amazes me how many times people fall for the price control fallacy, and they can't grasp how controls always lead to scarcity.
Yes, but do they have 1.6 Gallon toilets and are incandescent bulbs being outlawed?
Having the "world's biggest oil reserves" doesn't matter if you can't get the oil out of the ground.
this is off topic .. Rodman sang happy birthday alla Monroe the little dictator .... I thoght hitting the floor was as low as you can get ... I guess Rodman is making history here ... lol
....continuing off topic. US War-Chief Obama is sending more tanks and troops to South Korea in a continuation of former War-Chief Truman's Korean war -- the new action is apparently in response to Dennis's recent visit to Jong Un, and also an escalation of the militant Obama Pacific Pivot which is aimed a increasing tensions in the area.
http://www.reuters.com/article/2014/01/07/us-korea-usa-troops-idUSBREA06...
Do you follow the Kardashians too?
"Taxi driver Jose Sotomayor" He should just call his cousin Sonya up and see if she can ship over some grub and asswipe.
See. Currency devaluation does help exports.
Beware the professional Canadian shoppers invading Detroit.
Good for Detroit's entrepreneurial urban farmers.
Maduro is not a class act...about half as smart as Chavez...a bus driver....he is tanking the country...but the people on the dole love him...free stuff you know..just like in the USA
Only in america can you have a phone and food stamps, but not a single sense of purpose, or motivation in life.
I thought getting more free stuff WAS the motivation and purpose of life?
Sure beats working for it.
and you DO want to fix it yourself because the last thing you want your neighbors to see is a well-stocked basement.
This won't fix food crisis either
CS134 /CS137 Ratio and Food Chain in Alaska – Dangerous Levels of Radioactivity
Lichens in Alaska were tested in June 2011 and had extremely high levels of both Cesium 134 and Cesium 137. Around 6000 to 8000 pCi/ kg.
And the ratio of 134 to 137 was around .8. What that means is that all of this cesium is directly attributed to Fukushima.
Here is how it works. CS137 has a half life of 30 years, CS134 has half life of 2 years. So if the radiation was from 4 years ago, the CS would fall to around 25% of where it started.
It just so happens that the 137 and 134 quantities are about a 1 to 1 ratio at the beginning, with some variance based on the degree of fuel burnup. Color chart below shows actual test results for Fuku. The ratio was about .85.
The actual ratio measured in the lichens was right around .80 on average. So all of this is due to Fukushima
Got it? The lowest level of the food chain is highly contaminated. That was 2011, they are not planning on testing again until 2016. Does that make any sense?
Full report and selected tables and graphs here for your easy consumption
http://nukeprofessional.blogspot.com/2014/01/cd134-cs137-ratio-and-food-...
I think it's a wonderful narrative.
Stock Markets, buttcoins, facebook/twitter--the overall divorce from reality. All to the tune of a keynesian bullshit wetdream.
It's a pretend world out there. Times have never been better!
If Venezuela would begin using Bitcoin for transactions they could quickly take control of their economy and empower their Nation. Then they would own Gold, Oil and Bitcoin the three staples that make a nation great.
They'll be living high right up to the very moment their government pulls the plug on their internet access.
What then?
When the economy totally craters, and the worthless stock certificates get used as toilet paper, balance will be restored.
Adam Smith's "Invisible Hand" might be invisible, but when it gently cleans your ass, you can feel it.
my interest is piqued.
Lol, toiler paper, Tylers?
Actually that sounds rather apropo.
I don't know about the food thing, but I'm pretty sure that the CIA has been sending operatives into Venezuela to ensure that supplies of toilet paper are non-existent. I know that if I wanted to bring down a country, I'd attack the toilet paper supply chain. /sarc
I marvel at the foolishness of selling food for little pieces of paper in Columbia when food is a necessity, and it is becoming scarce. That's a great idea! Profit by selling a vital resource that is going to not be very common in the future!
Cue up Maduro accusing the Guajira Indians of being black-market food profiteers!
More absolute proof that government is the problem and not the answer.
The Venezuelan government steals billions in revenue from the nationalized energy sector. While this theft is ostensibly "for the people," the people have slipped further into poverty and misery.
"History tells us that government can only produce poverty, misery and death."
Just another example that QE doesn't work.
Krugman: Their inflation is too low. They just need to print more!
Prepare for the upcoming barter economy - get your beans, bullets, booze, rice, and toilet paper while you can... And don't forget a couple of ledger books so you can report your post-collapse earnings from bartering to the IRS...
don't forget junk silver coins