This Is What The Death Of A Nation Looks Like: Venezuela Prepares For 720% Hyperinflation

Tyler Durden's picture

For citizens of Nicolas Maduro's socialist paradise the news is terrible, and getting worse with every passing day.

Yesterday, we reported that one year after our November 2014 forecast, Barclays has decided that Venezuela is now past the "point of no return", and a bankruptcy in 2016 will be "difficult to avoid." But while some may have thought that this dramatic impact, while welcome by the rest of OPEC and oil bulls around the globe, would only impact the government, the reality is that this latest hit means a total disintegration of the economy and will take the country's already staggering hyperinflation to previously unprecedented levels.

According to the latest IMF estimate, Venezuela’s consumer inflation, already the world’s highest, will triple this year to a level above all estimates from economists surveyed by Bloomberg.

This is because the IMF, which until recently had predicted "only" 204% inflation for Venezuela, already higher than the 140% consensus, revised its numbers and now sees a mindblowing 750% hyperinflation in 2016: this means that the average price of products and services will increase over eight times over the span of the next 12 months.

Bloomberg reports that inflation will surge to 720 percent in 2016 from 275 percent last year, according to a note published by the IMF’s Western Hemisphere Director, Alejandro Werner. That’s nearly quadruple the median 184 percent estimate from 12 economists surveyed by Bloomberg, and exceeding the highest forecast of 700 percent from Nomura Securities.

Venezuela’s central bank published economic statistics Jan. 15 for the first time in a year, confirming that inflation had reached triple digits and closed the third quarter at 141.5 percent on an annual basis. As of December 2014, the last time data was released, inflation was 68.5 percent.

It has gotten so surreal, that the local central bank accused websites that track the dollar’s street value of “destroying prices” and installing a “savage” form of capitalism in the country, adding that 60 percent of inflation was the result of currency manipulation.

Whatever the cause, the reality is that real inflation is even worse, and when charted, this is what the death of a sovereign nation looks as follows (this does not assume a sovereign bankruptcy; when that happens the hyperinflation will really take off):

And when described with words:

Spiking prices and widespread shortages for even staples have driven discontent in Venezuela. That helped spur the opposition to gain control of Congress for the first time in a decade as President Nicolas Maduro attempts to turn the tide of what he has deemed an “economic emergency.”


A lack of hard currency has led to scarcity of intermediate goods and to widespread shortages of essential goods — including food — exacting a tragic toll,” Werner said. “Prices continue to spiral out of control.”

Actually, the hard currency exists, because while locals may not have access to dollars, they certainly could have converted their now totally worthless currency into gold, thus not only preserving but boosting their purchasing power relative to the local stock market which, as we showed previously, has also generated negative returns relative to the rampaging hyperinflation.

According to Bloomberg, Venezuela’s economy will shrink 8% this year following a 10% contraction last year, according to the IMF. While these forecasts are more pessimistic than economists’ median estimates for a contraction of 4.1%, in reality the Venezuela economy no longer exists, with all transactions now taking place in the gray or black markets, and the government apparatus effectively operating in a vacuum.

Which, as we noted yesterday, is good news for oil bulls: once the now inevitable sovereign bankruptcy hits, the resulting chaos and collapse in oil production in the political and power vacuum which may last for years, will serve as just the supply drop buffer the world oil market so desperately needs.

But while that may be good news for oil traders, there is no good news in any of the above for the long-suffering citizens of this "socialist paradise" which any minute now will be downgraded to its fair value of "socialist hell."

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Sizzurp's picture

Marxism = failed state waiting to happen

OrangeJews's picture
OrangeJews (not verified) Sizzurp Jan 22, 2016 3:06 PM
¿Dónde está el papel higiénico?
Tom Servo's picture

This is what it will look like in year 6 of Bernie Sanders presidency...


nuubee's picture

LOL, you can't "prepare" for 720% inflation, you can only get out of the way as much as possible.

two hoots's picture

If you want it badly, you’ll get it badly.




This is much like how those in Davos see Trump.  A crazed and angry people wanting change.  They (Davos) expect similar results, mostly chaos.  People see things differently when they look from their stations/classes in life, right or wrong.





1000 splendid suns's picture

This is what the jackals do to a major oil exporting nation....

Pickleton's picture

You seem to be under the impression that this socialist paradise somehow didn't do this to themselves.  Ummm no.

Ms No's picture

You seem to be under the impression that socialist governments are operating alone.  They are nothing more than tools for the banks.  The banks need the debt hook and the socialists provide it.  To think otherwise is to let the banks off of the hook.  Just because your .gov is in league with the big banks and spends you into oblivion should not mean that you have to give all of the assets of your country to them and starve.  Usury is a crime.  They are loaning more than can be paid back.  You and I didn't give them permission to spend us into the ground either.

COSMOS's picture

The dumping of oil by the USA and Saudi Arabia is geared towards oil producers, like Russian, Venezuela and Brazil. The USA is out for regime changes in all those countries and looking to scoop up Venezuelas vast oil resources for pennies on the dollar and boxing out China with a USA friendly puppet regime. Perhaps that is why the Saudis are trying to woo away the Chinese with their promises of cheap oil contracts. I dont think the Chinese will let Venezuela go into the USA sphere of influence.

am87's picture

Easy heist... Sean penn,  dilma roussefd,  cristina fernandez and mujicas wife all from the same religious backround.. Guess which. 

JamesBond's picture

Look on the bright side, they will soon be able to pay off their entire national debt with 100 Centimos. 




TBT or not TBT's picture

Maduro now believes in spreading wealth out.  Used to just spread it around. 

nmewn's picture

Correct me if I'm wrong but didn't Comrade Hugo of Venezuela break contracts, steal property, money & equipment and generally cause mayhem when he nationalized (socialized, communinized whateverthefuck) that country's oil industry?

How exactly is the US going to un-nationalize (or un-fuck) that legally and "scoop it up"? When it's "socially nationalized" doesn't that mean it belongs to "the people"?

I mean thats what the international communist propaganda literature always says or implies..."To each according to their needs, from each according to their abilities." or sumpin.

Doesn't it? ;-)

Money Counterfeiter's picture
Money Counterfeiter (not verified) nmewn Jan 22, 2016 7:16 PM

Bankers dream come true.  Cheap whores, cheap coke, cheap lsnd to plunder. All part of the plan. Zion dreamland after you kill off a few million natives. Yes just like Israel.

nmewn's picture

Wut? The only people being killed in Venezuela now are the ones the socialist pricks want to be killed.

And if you didn't pause long enough to read the article let me inform you...there is nothing a Venezuelan can find that is "cheap" in their country, if they can even find it at all.

Money Counterfeiter's picture
Money Counterfeiter (not verified) nmewn Jan 22, 2016 8:18 PM

Dog shit cheap if you have real money.  Bankers love that shit, death, buying shit for a few gold peices.  A bankers dream come true and you bet the Zionist MF'er are down there buying everyhting they can. Sick banker MF'ers need to die.

Four chan's picture

the goldman blood funnel must be twisted into the slaking victim.

COSMOS's picture

Nationalized and socialized what was stolen via privatization etc as in Eastern Europe, you mean. The pro western regime was the equivalent of the Koch brothers running America for a few decades.

TBT or not TBT's picture

But things much better now eh Cosmos?   Sod off swampy. 

Secret Weapon's picture

Same way the Soviets did it.

chiswickcat's picture

In countries that have flip flopped over the decades between solialism and capitalism, such as the UK, France, Spain to name a few, Friends of banking types, get in, privatise an industry, rail, steel, coal, gas, etc, sell it cheap to the bankers, who then run the industry into the ground, getting government bail outs, while extracting huge wealth from it. Then the public gets pissed off with their service/industry being savaged by bankers and votes to take it back again. All the US / UK bankers have to do in Venezuela is install a puppet government that will privatise the industries and sell it to them. Like a yo-yo. Each time the industry/service changes hands it is the tax payer that stumps the costs. It a rinse and repeat for bankers.

delacroix's picture

what happened to that china financed refinery, for the venezuela heavy crude?

Dental Floss Tycoon's picture

Haven't you heard?  Even measured in Yuan it's gonna come in under budget?




blueRidgeBoy's picture

I wondered how many comments I'd need to read before someone blamed the US for Venezuela's problems. Nine. The answer is nine.

Mack2308's picture

Miami - FL / U.S.A

January 25th, 2016


Perhaps, you're indeed just another typical certified socialist full-time whore, who lives within a socialist shit-hole commonly recoginized as fucking Venezuela, currently led by a former bus-driver criminal imbecile. At the mean time, your useless blond ass should be indeed jealous of the amount of socialist manipulated shit that you just spread out along with your terrible English grammar.

I'm in the hopes that you'll eventually be completely benefited with a free cordless dual dildo as a form of deepest appreciation towards to your visible ignorance and stupidity.

FreeMoney's picture

You and I didn't give them permission to spend us into the ground either.  I have to take exception to that.  The fiscal deficits have been going on for decades, while "we" collectively have been re-electing the same douche bags based on the unicorns and rainbows from our distinguished academia.

If we were smarter we would never re-elect anyone, nor would we vote for anyone that had held any prior office.

xavi1951's picture

Before we 'stop re-electing them', we need to end all the lifetime benifits they give themselves or we will be paying more of them for a lifetime.

Withdrawn Sanction's picture

Clawback the benefits would work just as well. As for "re-electing," how does anyone know that anyone was elected or re-elected since the electoral process cannot be audited, and esp  in light of voting machines that can be easily rigged?  I therefore reject out of hand any blame or complicity for acts committed by US politicians.  I had neither say nor control over the choices, policies, wars and so on they instituted.  

lincolnsteffens's picture

If you voted, you delegated your authority to your representative. Makes no difference if the one you voted for got elected. You agreed to abide by the results and the decisions of the representatives who won.

I didn't vote and I revoked my voter registration. I am not a member of your political society and your representative doesn't speak for me. I'm a citizen of the Republic while you are a citizen of the Corporate State.

If I could only figure out how to get your Coprorate State to stay out of my Republic, I'd be alot happier fellow.

1033eruth's picture

How the fuck did 20 people give Ms NO an upvote?  

"You seem to be under the impression that socialist governments are operating alone."

You seem and 20 shitheads that upvoted you seem to be under the impression that BANKS FORCE socialist governments to deficit spend.  

Socialist governments buy loyalty and votes with deficit spending.  They also buy CONTROL (as in a police state) with deficit spending.  Banks do not force any of this upon the populace.  In fact, the brainwashed populace end up VOTING FOR IT, just like we're doing in the US and this has absolutely NOTHING to do with banks.  

FUCK THE MORONS AT ZH for never learning from all the valuable information provided here.   

JamesBond's picture

What you say has truth in it.  Socialists politicians deficit spend.  However, the Internatonal Banking system allows them to get away with it devoid of any consequences.  Don't disaggregate the contents of a stew.  




TBT or not TBT's picture

You are referring to banks subject to the jurisdiction of various governments, which are well armed highly organized mafias with a monopoly pozition in their assigned monopoly territories on the operation of prisons, poloce, armies, regulations, education, justice systems.    And you think the banks are in control of these governments?   They are in cahoots with governments by necessity.  It is required of them.  

lincolnsteffens's picture

It has plenty to do with the banks. From the lower middle class to the wealthiest State, the banks sweet talk and cajole and bribe politicians to take their offers. People are just too weak to say no. There is no free lunch and the bill always comes due. Always was, always will be.

Tall Tom's picture

There are at least two willing parties in any con game, the swindler and the swindled


Both are seeking something for nothing and both are just as complicit. 


When Banks do not exercise due diligence when initiating loans and are intentionally seeking the subsequent bankruptcy to take the borrower's assets for a fraction of the Fair Market Value then that is just as immoral as a borrower initiating a loan without the ability to pay it back.


Oh yes the Banks are responsible as this whole system is unproductive and has merely transformed into a game of beggar thy neighbor


And nothing will please me more than to watch skyscrapers in every major city in America and England go up in flames.


Let the cleansing of fire take the immoral and reduce them to ASHES to where they can be properly disposed


Fucking thieves need to perish. Bring back crucifixion.


Please junk this post and let me know that you support the continuance of fraud and corruption...just like the jerk who junked lincolnsteffens' post.

Father1's picture

you make a great  point...both parties are complicit....but i'm not sure it's a question of morality's a business decision......i would say the borrower is too optimistic and the lender is advantageious...both sides take on risk...if the borrower fails on his commitment and his credit rating drops and he's w/out a home the bank has a non performing loan  and is now at risk to the markt price whislt the seller is long into thte sunset


i must question whether this is a moral issue


i really question your comment that skyscrapers in every major city in America and England should go up in flames because of this long standing banking arrangement between  borrower and lender.....if this is some Terrorist Statement than it shows how misguided you are.........


but generally you make an interesting point....but to hope these things is a major disconnect..... and your post should be flagged and investigated imho.   i worked in WTC and I believe that those who perished were American Heroes and if that makes you angry than I believe you need help.  Please get some.. it's long been my question as to what drives people to destroy things.... i can only conclude its jealous rage............

Tall Tom's picture

Israel and Saudi Arabia were directly responsible for 9-11.


Here is a tape of the Mossad Agents of Israel, on Israeli Late Night TeeVee, telling why that they were in New York City on that day...




Notice that they were NOT THERE to prevent the attack. They were there to DOCUMENT THE EVENT. This means that they admitted that they had FOREKNOWLEDGE.


Why will anyone be in a location to document something that they do not know is going to happen?


And yet they were released and NOT PROSECUTED?




Jealousy?! OF what?


You think that I am not angry that my Government, the United States of America,  was COMPLICIT IN THAT ATTACK???


I am not angry. I am ENRAGED.


You celebrate the FRAUD and the CORRUPTION whilest giving LIP SERVICE to the people who lost their lives.


No. I refuse to participate in fraudulent and corrupt schemes.


I am clever enough to see the scams and recognize them.


And people as you, who reject Christ Jesus...WILL BURN.


You lack a Moral Compass. 


Psychotherapy will not help you at all.


There is no cure for psychopathy.


BTW..FYI...Zerohedge is FIGHT CLUB.


And maybe you need to watch the last scene of Fight that you have an understanding of my allusion.


WATCH IT and realize where you are at. 


You may want to watch the movie..if not READ THE Tyler Durden, the guy in that scene..IS YOUR HOST on this site.


That way you will not come off sounding like an asshole.

forexskin's picture

that mossad interview ought to be playing 24/7 somewhere everywhere. then some thick skulls might just crack from the strain of the infuriating congnitive dissonance.

not likely... rage on, bro.

Tall Tom's picture

Check this one out where the US Military enlisted PEDOPHILE is bragging about how he and nine other of his comrades RAPED an IRAQI girl. Of course this soldier was NOT PROSECUTED


He supports that as well as Financial support is SUPPORT.


Of course he also SUPPORTS rape by our own Police Forces here in the USA...


Financial support is SUPPORT.



Tarshatha's picture

Perhaps they were buddies with these Jew terrorists (art students) that wired WTC 1 up and murdered 3000 people.

Father1's picture

you call yourself Christian......?    CHALLENGE........fightclub was a stupid movie about a pshyco....and you are living your life thinking you are actually a character in a stupid movie...fightclub...what a joke...i've read that zerohedge is backed by former Russian kgb types........if so, i have no speech is free speech....but to wish people to burn and die is what's wrong w/ our youth today.   you're probably and unemployed 20 something yr old outcast who is looking to start trouble.   my suggestion to you is to get a job and live your are spending too much time on conspiracy theories.......


let's just say your conspiracy theory is you're "christian" retribution is that millions of people who are not even in the gov't should be massacured?


i realize where Im at....I'm part of the civilized world and you are uncivilized and need to be attended to're obviously on drugs.......i'll pray for you


Tall Tom's picture

No. LOL  I do not use drugs. I do not drink.


As for my age I was born in 1959 and this certainly is not the Nineteen Eighties.


You are obviously not Christian. You cannot discern that which is moral from that which is immoral.


You JUSTIFY your sin as "a business decision"? You place profits above that of moral and ethical principle.This is DEMONSTRATIVE of your lack of a Moral Compass. There is no code of ETHICS attached to your behavior. You abandoned your morals and your ethics for expedience.  


It is NOT CIVIL to support a regime that has MURDERED one half Million INFANTS in Iraq...and we bragged on National Television that the price was worth it.




You supported that. YOU supported that and continue to support that. Financial support is SUPPORT.


You are a child murderer. You PAID to have children MURDERED. And you sit and attempt to lecture me about being civilized? Man you are so bent, twisted, distorted.


That blood is on YOUR HEAD. That blood is on MY HEAD.


The difference is that it does not piss you off. It enrages me, pal. But I have a conscience. I have empathy. I can place myself in those innocent victim's  families shoes and I can understand just how horrible that they must feel as I WOULD FEEL THE SAME.


In fact expecting that you would be able to do that is just like expecting a six year old to understand Calculus. And that is sad.


You are a psychopath. You have no ability to experience passion. You have no ability to experience empathy. And I cannot help you.


You are just another "Sunday Christian" headed toward a deserved fate. I have met far too many of you. 


As to Zerohedge...AS Tyler Durden is a fictionsal persona I will enjoy and celebrate the THEME in this venue.


As to vengeance God Almighty will make the final call on that. 


Wide is the path to destruction. You had best repent.


Many Billions will be going to Hell, Satan.


Your minions will be with you and your ilk.


You ought to actually read your 2 Thessalonians, Hebrews, Revelation





Father1's picture

so you are a "radical" you agree w/ actions of groups like Isis?

Tall Tom's picture

Yes I am a radical the most literal meaning of that word...BASE.  I am a FUNDAMENTALIST CHARISMATIC CHRISTIAN.


And as for ISIS..which is just a branch of the CIA....No. I do not support the FRAUDULENT and CORRUPTED policies of the US Government. ISIS is an agnecy working on behalf of the US Government. The current Neocon regime, the trilateralists in the USA, are the World's greatest danger.


THe US Government armed them to overthrow Qadaffi in Libya, because Qadaffi was planning to take Gold Dinars, exclusively, in trade for Oil. Thus the US Government acted to remove him from power and had him killed. They used ISIS as the agency to achieve this goal. We also were providing arms to ISIS to support the overthrow of the Assad regime in Saudi Arabia's and Israel's nemesis, Syria.


Of course we armed them through our puppet Government installed in Turkey. And when Ambassador Stevens went against that which his boss, Hillary Clinton, wanted him to do, Hillary Clinton, through Victoria Nuland, had ISIS kill him in Benghazi, Libya.


During the Cold War back in 1979, Zbigniew Brzezinski, a trilateralist under the Carter Administration, a member of the Council on Foreign Relations, working as Jimmy Carter's National Security Advisor, traveled to Afghanistan and gave the forerunner of the Taliban, then Al Qaeda, and finally what transmuted into ISIS, a speech,


Of course the goal at the time was to thwart the Soviet Union's planned advances into the region and protect the vast Natural Resurces, the Mineral Deposits, that Afghanistan has. (It is a Gemmological Paradise, after all, as it produces many of the World's finest gems. Minas Gerias, Brazil, and San Diego County, California, USA are inferior rivals at best.)


Here is a video of that speech...


In the prelude to the actual footage Brzezinski is photograped with a very young Osama bin Laden.


Currently Brzezinski is working with the Obama Administration as his Foreign Policy might be the better word.


And as for the Council on Foreign Relations...Former Secretay of State Hillary Clinton had this to say....


Of course she said that the Council tells the US Government what they "should do" and what they "should be thinking" as the Government Officials haven't any mind of their own?


THe CFR was not elected.


Our Congress, the Executive Branch, and the Supreme Court has ABDICATED its power and authority and has no legitimacy. The US Constitution is no longer the supreme law of the land. The current Government of the United States of America is a FARCE and has been for a Century or more.


It is no longer a Representative Republic but has transformed into an Oligarchical Dictatorship....which you support.


The very real problem which you have is that the youth of America is UNEMPLOYED. That means that they have the TIME to read what I write and the time to THINK ABOUT what I write.


Now the young adults may not like my Fundamentalist Charismatic Christian outlook.


But what some do not realize is that I will NEVER FORCE them to adopt my Spiritual Views as I am an advocate of LIBERTY and FREEDOM.


Of course ISIS does that as they FORCE their perversion of Sharia Law down everybody else's throat under penalty of death.


Of course ISIS is modeled after the USA as it is an agency working for the interests of the USA so what should I expect?


They are as free to choose a path to destruction, or salvation, if that is what they desire.


But they do know that what I write about the politics is TRUTH.


And what you wish of them is to remain ignorant of these incnvenient truths...


But due to the Obamacare polices they are unemployed or underemployed with far too much time on their hands. And that time is a LUXURY for me to make them aware.

Father1's picture

you seem more like a terrorist to me...."but they do know that what i write about the politcs is Truth"    your English isn't too sharp....are you Russian or ME.(sometimes you refer to USA as we)?...if you live in USA I suppose you don't pay taxes or you would be supporting the Devil.....generally you are part of a cult and you prey on youth to instill fear and rage and incite violence......i wouldn't be surprised if you were on unemployment......or you are a spy....your point about the banks was, however's some more negativity for you to consider....the FOMC raised interest rates and Treasury Rates went now the government charges more for individuals to borrow and they get less on savings.....our system is far from perfect and people have become so complacent that injustices have occurred but joining a violent cult is not the answer...peace be w/ you

RU4Au's picture

"..i worked in WTC and I believe that those who perished were American Heroes .."


 I fatigue of the casual and repetitive misuse of the title ' hero ' . You would define this word as one who died by unforseen circumstance, or one who perished by fire, or...?

Please look it up.

While it is certainly tragic that innocents died, having perished does not cloak one with nobility or valor.

( Pedantic rant off )

Father1's picture

i knew a lot of those who perished.  i was on the phone line w/ one of them...Brendan McCabe, father of 3 young boys.  He was on the 100th floor at Fiduciary Trust working to help manage assets for a large institution and raise his family and live the American Dream.....he died becuase of certain peoples hatred for said "american dream" and therefore my perception is that he died a hero., in the face of jealous idiots....What was their cause?   They think they died as hero's....hero's for what? killing innocent poeple?  and Trump is right there were many in nyc and nj suburbs who were celbrating after the if you "fatugue" wake up and slap yourself across the face and stop following ideoalogy of terrorism and get a job.....your thesaurus should be replaced w/ common sense and decency.......


many on hear sound like wanna be's frightneing........what is the goal of ISIS?   ionly see them as making fools of themselves...proving to the world they are savages w/ no ability to reason?    if there was a reason for 9-11 or any of the other atrocities.......i have yet to hear one       grow up......



Tall Tom's picture

Financial support is SUPPORT.




You paid for the MURDER of 500,000 Iraqi INFANTS who were no threat to the security of the United States.


And you see no reason why that they might want to strike back at the USA


There are none so blind as those who refuse to see, psychopath.


Look in the mirror monster. You elected your Government. You did not protest the actions of your Government. You were both complicit and compliant.


You will pay in Hell as the blood is on your head.


And you continually seek to justify it.

robobbob's picture

I was under the impression IMF and World Bank et al tend to make offers you can't refuse,

lest you find yourself at the receiving end of a sudden spring uprising, and soon to follow MIC anti-terrorist intervention

the bankers start out asking and offering politely with plenty of cash and prizes. mansions for the cheeses, and free healthcare for the masses

and if that doesn't get it, it becomes demands and ultimatums.

"nice little country you got there, shame if anything were to happen to it"

Nick Jihad's picture

That depends on who you mean by "themselves".  I have heard it said that the "Chavistas" consisted largely of economic migrants to Venezuela from Columbia, who were attracted to Venezuala's prosperity. There is a lesson here for all first-world nations.