The Hyperinflationary Endgame: Venezuela Currency Crashes 15% In One Day

Tyler Durden's picture

Just last week we were amazed to report that the Venezuela currency, the Bolivar, had crashed below 2,000 for the first time ever, losing 50% of its value in just two months as the Venezuela hyperinflation had entered its terminal phase.

As of this morning, the DolarToday.com website, maintained by a person the WSJ dubbed "Public Enemy No. 1 of Venezuela’s revolutionary government, Gustavo Díaz, a Home Depot Inc. employee in central Alabama" reports that having crossed the psychological 2,000 level just one week ago, the Bolivar has just plunged to a new all time low of 3,480.22 on the black market, dropping by 15% from its latest print of 2,972 reported on Friday of last week, and has lost 60% in its value just in the past month.

So for anyone still curious what hyperinflation in real time looks like, here is the visual answer.

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King Tut's picture
King Tut (not verified) Nov 28, 2016 9:56 AM

Raising rates as everyone flees into the USD

froze25's picture

Man, if you had gold or silver over there you can buy the block now. Then the socialist (communist) would just take it from you afterward.

King Tut's picture
King Tut (not verified) froze25 Nov 28, 2016 9:58 AM

Dead presidents would go a lot further.

thesonandheir's picture

Just print moar to make up for it, what the fuck is up with these people?

MillionDollarBonus_'s picture

Venezuela is suffering because of capitalist oil companies colluding to crash the oil price! It has nothing to do with socialism! Why can’t Western imperialists just leave socialist countries alone and let them thrive??

FIDEL CASTRO – A TRUE PEOPLE’S HERO

Haus-Targaryen's picture

Because fucking with them until they go bankrupt and exterminate their own people is so much fun.  Its actually a conspiracy created by straight, white, cisgendered Christian men to permanently enslave the entire world.  

We all had our meeting last night.  Japan is next. Gotta keeps those Asians in line. 

Michigander's picture

I see MDB is such a fucking joke that folks dont even bother down voting him anymore. Appears I spoke to soon. There is still entertainment value in him I guess.

FinalEvent's picture

Wake me up when it's 100% inflation every day.

Until then it's just "inflation"

JungleCat's picture

Take the data and plog it on a logarithmic Y-axis. Then take that data and plot it again with a logarithmic Y-axis. You will see that it is now a straight line. All is as it should be.

It's called "double logarithmically seasonally adjusted data".

As for MDB: he is such an isloationist, asking capitalist countries to "leave socialists countries alone".

The Saint's picture
The Saint (not verified) Arnold Nov 28, 2016 11:16 AM

Something is wrong with that gold price.  It shows gold is priced in Bolevars at 10X the U.S. dollar price.  Yet the currency is 3000 to the U.S. Dollar.

If true, buy Bolevars and use that to buy gold on the cheap!

auricle's picture

I would be very curious to see if AU/AG are selling for those stated prices. Anyone have time to catch a flight to Caracas and get a couple ounces and and report back? 

DaveA's picture

I doubt you could buy anything worth more than US$100 for any amount of bolivars, since the seller would then be stuck with an enormous, rapidly depreciating pile of paper.

Justin Case's picture

They can say its free if they want. The issue that arises, is the same as the CRIMEX price. Try to find the actual physical to buy at that price.

It probably won't be the advertised price. That was the old trick with advertising. They put in the paper that they have a great sale on an item, priced way less than anywhere in the city. People went to the store to buy it and it was sold out. But But we have these at a competative price.

When consumers complained it was revealed they only had one unit to sell. The ad was just a hook to get you in the store. So it was outlawed to make a sale on only one item that was the only inventory.

Al Tinfoil's picture

That "Ounce" of Gold or Silver for sale in Venezuela must be a "Venezuelan Ounce".  The Venezuelan Ounce is backed by full faith and credit of the Ghost of Hugo Chavez and based upon Socialist Class Warfare Principles.  A Venezuelan Ounce is not even printed on paper because paper there is more scarce than physical Gold and Silver, but it lives on in the spirit world and in the imagination of President Maduro and his accolytes.

Justin Case's picture

Those people can only wish they had money and not currency. Here people can't understand that Gold and silver are insurance against theis type of failure of currency to perform. US rolled them over for their gold collateral that the gave last year to the Banks. They said "Gold? what gold?" Ah, ya that  was interest payment, and....... it's all gone!

I wonder which is easier to barter with, bullets or silver and gold? I guess if the individual refuses to barter you can always shoot him and take what ya need off him, since he won't be using it?

RU4Au's picture

I would love to be able to arbitrage that official gold exchange rate...

Take dollars and buy bolivars, then buy gold at the official exchange rate.  Only one problem...

NO GOLD EXISTS at that exchange price.

BabaLooey's picture

He's gone "full glue". No more sniffing - just dunks his head in and immerses himself.

 

lasvegaspersona's picture

I usually ignore MDB but since I'm so happy Fidel is finally reunited with Che in Venezuela errr Hell ...same diff...that I gave him a down vote.

markl's picture

A very simple law of economics is that in the long run imports = exports. Socialist countries don't export anything. So they have to be prepared to import nothing. That's what's happening to Venezuela - no imports, no food, no modern products. They're being reduced to the irrelevance of a country with a 1930s economy.

If socialism can only exist during exceptional oil prices, and only in countries that have oil reserves, then it's not an economic theory, it's an opportunistic theory. 

hedgeless_horseman's picture

 

Socialist countries don't export anything.

Below are the 15 countries that exported the highest dollar value worth of crude oil during 2015:

 

  1. Saudi Arabia: US$133.3 billion (17% of total crude oil exports)
  2. Russia: $86.2 billion (11%)
  3. Iraq: $52.2 billion (6.6%)
  4. United Arab Emirates: $51.2 billion (6.5%)
  5. Canada: $50.2 billion (6.4%)
  6. Nigeria: $38 billion (4.8%)
  7. Kuwait: $34.1 billion (4.3%)
  8. Angola: $32.6 billion (4.1%)
  9. Venezuela: $27.8 billion (3.5%)
  10. Kazakhstan: $26.2 billion (3.3%)
  11. Norway: $25.7 billion (3.3%)
  12. Iran: $20.5 billion (2.6%)
  13. Mexico: $18.8 billion (2.4%)
  14. Oman: $17.4 billion (2.2%)
  15. United Kingdom: $16 billion (2%)

 

http://www.worldstopexports.com/worlds-top-oil-exports-country/

ParkAveFlasher's picture

America Latino is so easy to control, just give the caudillos a few acres in Florida and a permanent CIA pension, and you're set.  Good peeps, those guys.

hedgeless_horseman's picture

 

In 2014, Venezuela exported $63B and imported $36.6B, resulting in a positive trade balance of $26.3B.

 

http://atlas.media.mit.edu/en/profile/country/ven/

 

And...it's gone.  It's all gone.

jmack's picture

yes, but that does not include what the socialists exported to Switzerland.

hedgeless_horseman's picture

 

Or the money the capitalists "exported" to London and NYC.

jmack's picture

 getting paid for services rendered or goods delivered is quite a bit different than getting paid for being Chavez's daughter.

ParkAveFlasher's picture

I remember hearing about how good things were in Venezuela. 

Sages wife's picture

Hey hh, you forgot to highlight Canada in your list.

lasvegaspersona's picture

When I look at your list I'm reminded  that QE created enough cash to buy all the world's oil...but most people did not know it was happening. Can't wait for the Fed's next party trick...maybe the'll print enough to buy Europe next time. I've always thought we deserve another continent. Since fools will sell stuff for dollars...why not?

Justin Case's picture

Canada is in the top 10 socialist countries, sixth I believe.

Just have to Goog "top ten socialist countries" and it magically pops up. We're number 5 on yoar list of oily exporters.

CRANKY YANKEE's picture

Can you find something other than natural resources or agriculture?  What "value added" items do they export?  Cars, cell phones, computers, building supplies other than lumber?  Taking a countries natural resources and selling them on the CAPITALISTS free markets only keeps socialist in power longer.  They take something that they didn't make (nat resources) and then sell it to us capitalist pigs...they then take our money and dole it out to the folks who keep them in power.  

 

I'm for doing no trade with countries without a freely elected government.  You would see the economy of Canada, Mexico Norway and UK go through the roof and the remainder just crash and burn.  Then we would all see what the socialist economy could do...damn near nothing without forced labor, lost persoanl freedom and tyranny.  

pff136's picture

Good idea! Let the Socialists live as they wish; no entangling alliances. What you are suffering from is the same as what is occuring in the U.S......crony capitalism....not true free market capitalism. Since no entangling alliances should be expected, neither should American tax payers bail out Socialist countries as their currencies fail. And anyone who thinks a Communist dictator who regulary used firing squads against his people is a hero, needs to just be left alone because no ammount of explaining can be given to a person like that.

Nunyadambizness's picture

Why don't you MOVE to Venezuela you sack of shiite?  You can espouse your Socialist bullshit there, and will probably not get killed for a day or two.

Kidbuck's picture

Is MDB Hillary or just the Hillary of ZH? I

CRANKY YANKEE's picture

Except for the people in front of fireing squads, or imprisoned for a different opion, freedom lovers, anyone who is religeous anyone wanting to pursue their own happiness.  yeah, socialism is great if your the 1 person in charge.  for everyone else, not so much.

The Jaguar's picture

BWAAAHAHAHAHAHAHA BWAAAAAHAHAHAHA BWAAAHAHAHAHAHAHA BWAAAAAHAHAHAHA

WHAT A JOKE YOU ARE MDB!

Al Tinfoil's picture

It was reported recently that the printers of the Bolivar (all of whom are outside Venezuela) were in danger of not being paid.  Apparently these printers did not think the Bolivar was worth taking, let alone printing. 

And it seems no printing company remains in business in Venezuela (is that because currency-grade paper and ink have to be imported?).  In a country that cannot import enough toilet paper, currency-grade paper is probably hard to get.

Raffie's picture

Venezuela is socialist at its very best.

I call it the land of Bernie Sanders.

Wormwoodcums's picture

Dead criminals is more like it.

Belrev's picture

Gold and silver will buy you little food in hyperinflationary state with goods shortage. That is if you can hold on to it.

Better buy guns, not gold.

misalkin's picture

Gold is good assuming there will be recovery and new economy and everything will get back to new normal after some time. But if we are heading toward zombie apocalypse scenerio or some other post apocalypse-post ww3 world, than obviously gun is much better choice.

Let's hope it won't crash too hard.

There are 4 phases:

1) You buy food with fiat

2) You buy food with silver/gold

3) You buy food using barter trading. Ex rabbit for 5 bottles of milk or 12 eggs. Or 10 cows for daugter.

4) You kill other ppl and eat them or you eat their food. Going from house to house killing, pillaging and burning. Survival of the strongest.

 

Gold is good buy if we stop on phase 2 or phaze 3. But once we reach phase 4 than gold will be worthless.

Silver will be good money only till phase 2.

tmosley's picture

Your economic and historical ignorance is astounding.

Raffie's picture

+1

LOL...

His butt buddy is more then likely MDB (the troll)

Some of these kids just don't think it through at all.

So we can speculate in his reply that if you have a heart attack don't do to the hospital, but eat a Flintstones chewable vitamin.

NoWayJose's picture

I like to think of the fall of the Confederacy. It fits your scenario well. Once Confederate dollars became worthless, the only wealth in the South was land and gold. If you had land but no gold, the tax collectors took your land. If you had gold, you could convert it to the new currency and pay your taxes, or buy any land you wanted. You can't pay taxes with a gun (unless you pawn it)!

Similar thing with the Weimar Republic - one currency is hyperinflated to worthless, and a new one replaces it. You can burn the old currency to stay warm, or convert your gold to the new currency.

With $20 trillion in debt and untold promises of entitlements, it is easy to see the US head down this same path. So if you have a nice bug out location and a stack of guns, what will you use to pay the tax man after you current fiat becomes worthless?

Justin Case's picture

There are a lot of "IF" components that need to be covered as well. Situations that get too out of control the military takes over and a curfew gets put in place. Walking around with a piece might get you killed for no reason and if you kill a friend of the mob that wants yoar stuff, you would need a machine gun and a set of wheel to get out of town ASAP or you'll just be a dead hero. If you have family and kids they make great hostages. Rioters will go after you, just b/c you are tough guy.

I don't believe this will be a Mad Max movie like many people think. That's going extreme. The safest thing is leave the city. If you barracade yourself in a house they can torch it.

Don't poke a hornet's nest.

lasvegaspersona's picture

Shortages are just for the poor.

There is no shortage at the Maduro house I'm sure.

Justin Case's picture

Where in the world would it be different?

Justin Case's picture

They shop Brazil, just like CDN's shop merca. Buds. But their currency is too small to use as toilet paper, so PM coins would be the best alternative in this situation. Everyone on the planet knows that money. In Zim the people were all panning the rivers to get a few grain to go shopping. It was $2 billion for a Mango from a street vendor.

You wouldn't get across the border with a weapon, might even get killed seen with a weapon. Terrorista.