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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?


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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Thu, 03/06/2014 - 20:34 | 4519412 DoChenRollingBearing
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.

Thu, 03/06/2014 - 20:36 | 4519419 StacksOnStacks
StacksOnStacks's picture

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

Thu, 03/06/2014 - 20:38 | 4519433 DoChenRollingBearing
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).

Thu, 03/06/2014 - 20:48 | 4519480 Herd Redirectio...
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.

Thu, 03/06/2014 - 20:55 | 4519504 DoChenRollingBearing
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.

Thu, 03/06/2014 - 22:00 | 4519733 Richard Chesler
Richard Chesler's picture

Best part is tungsten is not a gasoline additive.

Thu, 03/06/2014 - 22:52 | 4519875 Mister Kitty
Mister Kitty's picture

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

Thu, 03/06/2014 - 21:17 | 4519595 Urban Redneck
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.

Fri, 03/07/2014 - 01:28 | 4520196 saltedGold
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!

Fri, 03/07/2014 - 04:10 | 4520345 Cap Matifou
Cap Matifou's picture

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

Thu, 03/06/2014 - 20:36 | 4519422 fonestar
fonestar's picture

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

Thu, 03/06/2014 - 20:42 | 4519451 bluskyes
bluskyes's picture

They're immigrating to California?

Thu, 03/06/2014 - 20:48 | 4519476 StacksOnStacks
StacksOnStacks's picture

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

Fri, 03/07/2014 - 11:37 | 4521225 XitSam
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.

Thu, 03/06/2014 - 20:43 | 4519453 DoChenRollingBearing
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.

Thu, 03/06/2014 - 21:02 | 4519532 DumpsterFire
DumpsterFire's picture

Saw a brass BTC at my PM dealer.  Not sure what to think.  http://www.goldeneaglecoin.com/item/2013-casascius-1-btc-bitcoin-anacs-m...

Thu, 03/06/2014 - 21:13 | 4519567 DoChenRollingBearing
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.

Thu, 03/06/2014 - 21:15 | 4519582 Confused
Confused's picture

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

Thu, 03/06/2014 - 23:13 | 4519935 MrButtoMcFarty
MrButtoMcFarty's picture

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

Hope it works out for you.

Fri, 03/07/2014 - 00:14 | 4520085 JLee2027
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.

Thu, 03/06/2014 - 21:28 | 4519637 TheReplacement
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.

Thu, 03/06/2014 - 20:39 | 4519429 prains
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?

Thu, 03/06/2014 - 20:38 | 4519430 fonestar
fonestar's picture

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

Thu, 03/06/2014 - 20:50 | 4519487 prains
prains's picture

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

Thu, 03/06/2014 - 21:31 | 4519648 stacking12321
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:


Thu, 03/06/2014 - 22:14 | 4519776 fonestar
fonestar's picture

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

Thu, 03/06/2014 - 23:10 | 4519924 MrButtoMcFarty
MrButtoMcFarty's picture



Fri, 03/07/2014 - 11:39 | 4521241 XitSam
XitSam's picture


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

Sat, 03/08/2014 - 03:00 | 4524404 Independent
Independent's picture

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

Fri, 03/07/2014 - 00:17 | 4520090 JLee2027
JLee2027's picture

American CEO that lived in Singapore.

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

Thu, 03/06/2014 - 20:37 | 4519424 jcpicks
jcpicks's picture

I didn't realize arbitrage was a new thing.

Thu, 03/06/2014 - 21:09 | 4519560 El Vaquero
El Vaquero's picture

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

Thu, 03/06/2014 - 20:40 | 4519440 Son of Captain Nemo
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!

Thu, 03/06/2014 - 21:01 | 4519496 DoChenRollingBearing
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!


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

Thu, 03/06/2014 - 21:33 | 4519654 stacking12321
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?


Thu, 03/06/2014 - 22:56 | 4519885 Midas
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.

Thu, 03/06/2014 - 20:40 | 4519442 NOTaREALmerican
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.

Thu, 03/06/2014 - 20:41 | 4519446 bluskyes
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

Thu, 03/06/2014 - 20:45 | 4519465 NOTaREALmerican
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.  

Thu, 03/06/2014 - 20:55 | 4519502 johnQpublic
johnQpublic's picture

which one do we have?

Thu, 03/06/2014 - 21:00 | 4519528 NOTaREALmerican
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.  

Thu, 03/06/2014 - 21:04 | 4519545 pavman
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!!!

Thu, 03/06/2014 - 20:59 | 4519519 pavman
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

Thu, 03/06/2014 - 21:08 | 4519559 NOTaREALmerican
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.  

Thu, 03/06/2014 - 21:21 | 4519610 Herd Redirectio...
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.

Thu, 03/06/2014 - 22:04 | 4519743 Errol
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... 

Thu, 03/06/2014 - 22:26 | 4519801 Grande Tetons
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. 

Thu, 03/06/2014 - 22:27 | 4519813 FredFlintstone
FredFlintstone's picture

"genetic lottery", how so?

Thu, 03/06/2014 - 23:23 | 4519962 Grande Tetons
Grande Tetons's picture

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

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