In Venezuela, This Is How You Convert $1 Into $175,000

Tyler Durden's picture

Submitted by Francisco Toro via the Caracas Chronicles blog,

Say you come into Venezuela with just $1 and an eye for business. Just how much money can you turn that bill into using tried-and-true, being-used-right-now scams? With a bit of gumption the answer to that is…$175K or so. Really. Here’s how.

First, take your crisp new dollar bill to a black market currency dealer and buy yourself Bs.85.

Did you make sure to get travel insurance before you trip?

Good.

Now go to a doctor and buy yourself Bs.85 worth of medical attention. Any pretext will do. Don’t forget to get a receipt, though: your insurance company back home will reimburse your 85 bolivar claim at the official rate, giving you back $1 for every 6 bolivars and 30 cents you spent.

So after one doctor’s visit, your $1 has already turned into $13.50. Not too bad.

But we’re just getting going here. Needless to say your next step is to take your $13.50 right back to the currency tout and buy yourself 1,150 bolivars.

Next, take your 1,150 bolivars to any reputable Caracas jeweller. There, you can get about 5.7 grams of 18-karat gold for that. As it turns out, back stateside those 5.7 grams of gold are worth $182.29.

Your Caracas black market dollar dealer will be expecting your call by now: the $182.29 you netted for the gold buys you 15,495 bolivars.

This is fun, isn’t it?

But maybe you’re getting a bit impatient at this point. Sure, a 18,290% profit with no risk and for doing no real work isn’t too bad, but let’s say you want to make some real money.

For that, you need to go to a market with genuinely grotesque price differential. And in a petrostate like Venezuela, that can only mean one thing: gasoline.

At Venezuela’s ludicrous price of 0.097 bolivars per liter, the 15,495 bolivars currently burning a hole in your pocket can buy 159,742 liters of unleaded gas. That’s 42,200 gallons or so.

The next step is to load your gas into a tanker truck and drive it out to Colombia, where each and every one of your 42,200 gallons will sell for US$4.14.

By the time it’s all said and done, that clean, crisp $1 bill you came into Venezuela with has turned into US$174,905.

That’s a seventeen million percent profit margin for doing basically nothing.

This isn’t just some thought exercise, it’s the central reality of the Venezuelan economy today.

The catch, of course, is that the viability of each of these scams depends first and foremost on having official protection from some regime-connected power broker. You can’t smuggle gasoline out of the country without a National Guard officer (or 10) taking a cut. You can’t load much gold into a northbound plane without paying off an airport guard. Any attempt to buy a substantial number of official rate dollars is going to depend on some regime official – probably wearing olive green -giving his go-ahead.

As the protests mount on the streets, it’s important not to lose sight of this: it’s these rackets those guys are protecting.

And their willingness to use violence to protect them is roughly proportional to the profit margins involved.

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DoChenRollingBearing's picture

I suspect that those little tricks will not last long.

I am in Peru now, NOTHING like that happens here.

Even back in the hyperinflation days, well you could make a little coin, but not like that.

Gold merchants are not stupid.

StacksOnStacks's picture

*takes deep breath and exhales*  I'll be right back!

DoChenRollingBearing's picture

On the other hand, if your Spanish is good and you bring along your prescription receipts from your US pharmacy, many pharmacies will let you buy more...  If they have what you want (a big if in Venezuela now).

Herd Redirection Committee's picture

Except for the part about filling up an oil tanker truck and being allowed to leave the country, he had me going.

DoChenRollingBearing's picture

Actually that is (or until recently perhaps, was) BIG BUSINESS along the Colombia-Venezuela border.  Just have to bribe the right people.

Richard Chesler's picture

Best part is tungsten is not a gasoline additive.

Mister Kitty's picture

I've never been to Caracas.  I bet it sucks ass.  Bitches.

Urban Redneck's picture

If you want the the big bucks- you need to cut out the middlemen, pump up the volume, and jump into the deep end of the risk pool- e.g. Vitol in Libya, who didn't wait for no stinkin' central bank, but the deep end of the risk pool is packed sharks that no sane person would do business with... So unless you're willing to sell your soul, it probably better to aim lower.

saltedGold's picture

"Except for the part about filling up an oil tanker truck and being allowed to leave the country, he had me going."

Me too.  Take the easy win and get $10,000 worth of medical care and call it a day!

Cap Matifou's picture

One tanker truck will not hold it all, 8 is needed. Or 8 crossings.

fonestar's picture

Venezuelans will be going over to Satoshi's side.  The whole world is Cyprus.

bluskyes's picture

They're immigrating to California?

StacksOnStacks's picture

GREAT!  That's all we need is more people leeching off of the system.

XitSam's picture

CA will be the first big state to go full on tyranny.  The sooner the better.

PS. Southern California Refugees: It is a long hot empty desert to your east. You will die. Better to go north.

DoChenRollingBearing's picture

I heard BTC is gaining lots of traction in Argentina.  Would not surprise me at all if Venezuelans start using it big time.

I am now in Peru.  I hope I can find a jeweler or coin shop who takes BTC.

Then ZH-er "CrashIsOptmistic" will have been shown to be correct: BTC allows you to easily move BTC (OK, now have done that) and spend it almost anywhere (not yet).  

Once Peru takes it, almost everyone will.

DoChenRollingBearing's picture

If you want to buy BTC and not leave a trail, find a local and buy for cash (try localbitcoins.com, I found someone there, emailed him, and bought BTC twice at a bearby Starbucks).

I have bought BTC twice from strangers by US mail, but that requires trust...  He was a ZH-er.

Much of my little BTC adventures is at my blog.

Confused's picture

Actually, this scam requires something....effort. Not like TARP or anything, where all you do is just make a call. 

MrButtoMcFarty's picture

I think I will stick with nickels, silver, and gold.

Hope it works out for you.

JLee2027's picture

The OP's Bullion dealer does cash both ways.

Not sure why anyone would want a brass BTC though. Real Gold is better.

TheReplacement's picture

Man you must annoy the hell outta that guy.  He just wants to be left alone and here you are always acting like he's some perfect being and all that while you huckster your bitcraps.  Give it a rest.  Everyone, even Satoshi would appreciate it.

prains's picture

what does a roll of toilet paper go for in VNZ?

 

 

why not just skip to buying ridiculously cheap gas and shipping elsewhere?

fonestar's picture

It's spelled "fonestar" dumbass.  And her death was covered several pages ago.

prains's picture

no dorkstar it's spelled "brain hemorrhage" dumbass and you've managed well with it for some time now

stacking12321's picture

that depends on the site.

if you are at http://accredited-times.com (Legitimate news from accredited writers), it is spelled PHONEstar there, as i noted when i was dilligently perusing the comments section:

http://accredited-times.com/2014/01/31/accredited-insights-a-day-inside-...

fonestar's picture

What the fuck?  This is not the real fonestar!  fonestar is fonestar!

XitSam's picture

foneystar

This is fight club. We call you what we want.

Independent's picture

FARTstar, Coinstar, Deathstar, Funnystar, Fukushimastar, Fellaciostar, and last but not least FUDGEstar

JLee2027's picture

American CEO that lived in Singapore.

Now that makes sense. Virtual money, virtual CEO's. Dead ones.

jcpicks's picture

I didn't realize arbitrage was a new thing.

El Vaquero's picture

New?  Nope.  But it is what's for breakfast.

Son of Captain Nemo's picture

"The catch, of course, is that the viability of each of these scams depends first and foremost on having official protection from some regime-connected power broker. You can’t smuggle gasoline out of the country without a National Guard officer (or 10) taking a cut. You can’t load much gold into a northbound plane without paying off an airport guard. Any attempt to buy a substantial number of official rate dollars is going to depend on some regime official – probably wearing olive green -giving his go-ahead."...

Replace National Guard Officer with TSA/DHS representative and you have yourself a match, if you want to get Au and Ag out of Los Estados Unidos!

DoChenRollingBearing's picture

For now, you may take all the gold you want out of the USA, but you must declare it on a special Customs Form if over $10,000 worth (at your international airport).  I did this once, the Customs lady (definitely a "B-Teamer" -- it was the weekend...) was at first befuddled and had to make a couple of calls to ask what to do, LOL.

Then she tried to set me up by asking how much they were worth (actual value, not "face value").  Bitch.  A felony to lie.

If you take gold OUT of your country, CHECK the laws first!

EDIT:

For small amounts of gold coins, just put them in your rubber coin-pouch thing (mine says Mt. Rushmore)...

stacking12321's picture

so what did you tell her?

and why would anyone lie, when they can simply state, i haven't checked the spot price of gold lately, so i don't know?

 

Midas's picture

F the spot price, my uncle Warren says it's a barbarous relic and ain't worth shit.  Put that on your customs form, hon.

NOTaREALmerican's picture

Lord Blankenfiend says about that childish scam:  I don't want to talk to you no more, you empty headed animal food trough wiper. I fart in your general direction. Your mother was a hamster and your father smelt of elderberries.

bluskyes's picture

What's the difference between paying a guard directly, and paying him indirectly through taxes?

Sounds like Venezuela's tax system runs more efficiently than Amerika's

NOTaREALmerican's picture

Re:  What's the difference between paying a guard directly, and paying him indirectly through taxes?

There's a huge difference.    It's THEE major difference between a functional society and one based on bribry.

Someday, imagine yourself as a semi-autistic intervert and IMAGINE trying to negotiate your way through life with every extroverted asshole trying to shake-you-down.

Yeah,  a functional society - where the price is known UP FRONT - is what makes things liveable for the semi-autistic and introverts.  

NOTaREALmerican's picture

Re:  which one do we have?

In transition.  That's what the semi-autistics & introverts don't get.   When the dumbass peasants go "full Greek" this place will be hell for them.

The best thing about having a functional society is you don't have to negotiate with asshole if you don't want to or are incapable of doing so. 

What's the price,  here's my money,  do the task, leave me alone.  

pavman's picture

See my comment below.  This is a sign that we're transitioning...when you can't even negotiate with car dealers because they're all offering you that 'car max thing.'  BULLSHIT!!!

pavman's picture

where the price is known UP FRONT

You mean every modern 'internet' car dealership on the planet?  F'n car dealers...we know your 'internet price' is the starting point and that 'Eddie Rumper's Cheverolette' isn't 'CarMax.'  You're lucky I graced you with my presence.  If you don't knock of 8k, good luck selling that jalopy.

Two words: Herpa Derp

NOTaREALmerican's picture

Re:  You mean every modern 'internet' car dealership on the planet? 

People expect bidness to be run by sociopaths and assholes.   Econ 101 says in bold print:  people will fuck you over unless there's competition.    They'll fuck you over because people are assholes.   And the ONLY protection people have from getting fucked over by bidness IS competition of bidness; because people running bidness are fucking assholes because ALL people are assholes (but I already said that).

Societies, however, are functional or not depending on how (relatively) honest the monopolies of power are.  

Ask any Indian or 3rd world imigrant what they like about America.   They'll almost always say:  I don't have to bribe.   Once THAT goes,   the introverts & semi-austistics that lived very well here without having to deal with bribing assholes are going to be ABSOLUTLY FUCKED.  

Herd Redirection Committee's picture

No, we already have institutionalized bribery, in the form of unions, 'public service', and the revolving door between goverment (esp. on the regulation side) and industry.

Errol's picture

NOTaREALmerican, as an aspie (Asperger's Syndrome) I genuinely appreciate your insight.  I do indeed feel "What's the price?  Here's the money, leave me alone."

I am probably going to respond poorly to some pushy turd up in my face for a bribe.  But I may be less hapless than you might think: US public schools provide years of training for dealing with "authorities", bullies, charismatic narcissistic sociopaths, and the like.  As a start, play dumb (easy enough to fool most narcissists; from the outset they believe everyone else is below them) and stay under the radar. 

When stealth fails, well planned, patiently delayed passive-aggressive retaliation has provided satisfactory compensation for whatever I feel I've been unfairly deprived of... 

Grande Tetons's picture

He did write semi autistic, Dr. Burry.  Some aspies consider their afflction to be akin to winning the genetic lottery.  I am sure you would concur at some level. 

Grande Tetons's picture

In a word, focus. It is a double edged sword.