This Is What Venezuela's New, Vertical, Banknotes, Now With Added Zeros Look Like

Tyler Durden's picture

We've all been eagerly waiting to see them: Venezuela's crisp,brand new yet soon to be hyperinflated with many more zeros banknotes, and finally, after various failed attempts to deliver the new bills to Caracas (which according to Maduro were at least partially aborted due to pesky CIA meddling) they have arrived. And they are vertical.

A new bank note of 500 Bolivars held outside a bank in Caracas. Jan. 16, 2017.


A new bank note of 5,000 Bolivars outside a bank in Caracas. Jan. 16, 2017.

Eager to get their hands on the new currency, AP writes that Venezuelans stood in long ATM lines Monday to take out new, larger-denominated bills "that President Nicolas Maduro hopes will help stabilize the crisis-wracked economy." Of course, they will do no such thing as the pieces of paper in circulation have absolutely no bearing on the underlying economy, or its hyperinflation, but it will take at least several more shipments of new banknotes before the Maduro figures this out.

As a reminder, in taking a page out of the Indian demonetization playbook, Maduro last month said he was scrapping circulation of the most used bill, the 100-bolivar note, and replacing it with new bills ranging from 500 to 20,000 bolivars. 

The local were appalled. Residents in Caracas expressed shock at seeing bills with so many zeros — a sign of how worthless the bolivar has become amid triple-digit inflation and a collapse in foreign exchange reserves that has led to severe food shortages.

Our advice: get used to it - the fun is only just starting. Ask Zimbabwe.

"I never thought I'd have such a big bill in my hands," Milena Molina, a 35-year-old sales clerk, said as she inspected crisp, new 500-bolivar notes she had just withdrawn. "But with the inflation we're suffering, the notes we had weren't worth anything and you always had to go around with huge packages of bills."

The Weimar Republic agrees.

Monday's rollout of the first batch of imported notes came weeks later than the government had originally promised. Maduro last month ordered the 100-bolivar note to be withdrawn from use well before the replacement bills were ready, leading to widespread chaos as Venezuelans rushed to spend the bills before they were taken out of circulation. With cash running out, looting and protests were widespread - although they were widespread before the currency exchange too, so there wasn't much of a difference - and Maduro had to backtrack. On Sunday, he extended for the third time, until Feb. 20, the deadline for the 100-bolivar note to remain legal tender.

While the new denominations should make cash transactions easier the relief may be short-lived: since the largest, 20,000-bolivar note is worth less than $6 on the widely used black market, Maduro already has to order a fresh batch with at least one more zero. With inflation forecast by the International Monetary Fund to hit four digits this year, few economists expect the currency to rebound any time soon.

Seeking to combat the black market, the government on Monday inaugurated four currency exchange houses near the border with Colombia where Venezuelans will be able to purchase Colombian pesos at a favorable exchange rate of 4 pesos per bolivar. The bolivar currently is worth just a quarter of that amount at exchange houses over the border in Colombia.

And while on the surface this risk-free arbitrage guaranteeing 400% returns would be a slam-dunk trade, there are two problems.

First, while Gov. Jose Vielma Mora of Tachira state said the Venezuelan central bank has at its disposal a large amount of pesos to meet what is expected to be strong demand for hard currency, purchases would be capped at between $200 and $300. A second, and bigger proble, is that it was hard to find anyone Monday who had managed to buy pesos.

Opponents of Maduro said that in trying to set an exchange rate for pesos, authorities are paving the way for corruption, saying only certain individuals and companies close to the government will be able to purchase them at the official rate. They are, of course, right.

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wee-weed up's picture

Some gov'ts know no bounds.

Truther's picture

It ain't worth the paper it's printed on.

The Saint's picture
The Saint (not verified) Truther Jan 16, 2017 10:27 PM

Do you just add your own additonal zeros to these as inflation ravages them?

 

Withdrawn Sanction's picture

Seems like you could fit more zeroes if they were printed in landscape mode instead of portrait

hedgeless_horseman's picture

 

What is the con?  The con is that economic growth is both good and real.  It is most often neither  The long con is nominal returns versus real returns.

What keeps the con going?  Apart from greed?  Money printing.

Please, understand that if the amount of money in a closed system doubles, the value of each monetary unit halves, and the price of everything, including stocks, increases 100%.

http://www.zerohedge.com/news/2017-01-13/what-can-we-learn-looking-carni...

 

6-Caracas

http://www.zerohedge.com/news/2016-04-21/why-stock-market-so-strong

BabaLooey's picture

<scratching head>

Imagine that!

 

Déjà view's picture

Verticle...'UP' as inflation...

38BWD22's picture

 

 

I wonder if Venezuela will make it up to Peru's highest (1980s): 5,000,000 inti note.

auricle's picture

Well that should fix everything. Can we all move along and focus on green shoots. 

The_Juggernaut's picture

What's the over/under on how long it will take them to catch up to Zimbabwe's 100 trillion dollar note?

Save_America1st's picture

the new version is great and saves on printing cuz you can draw in your own zeros each day. 

bamawatson's picture

and they still work well for snorting coke

Theosebes Goodfellow's picture

I would like to point out that due to its limited size, it is completely impractical to use for wiping one's fundament, ( though perfectly functional to do so in all other respects).

MANvsMACHINE's picture

The extra zeros should have been printed on the bills but covered like a scratch off lottery ticket. When Maduro gives the go ahead, the public is allowed to scratch off just one spot to show an additional zero. If anyone scratches an extra spot, that particular bill is automatically worthless until the time he orders the uncovering of the second zero. There would be no need to print new bills every couple of months under this plan.

Tallest Skil's picture

Post-WWII Hungary still has the record for highest denomination. I don't see that being broken in a third world country until the US goes under, too.

SoDamnMad's picture

Yeah   I'll take the 4 rolls of Charmin.  

OK, that will be 5,000,000 Bolivars.  Anything else ma'am.

No, that's all I can afford right now.

edotabin's picture

They should just print a single zero on it and get it over with.

The Navigator's picture

No Big Deal

Check out the Zimbabwe dollar

50 Trillion and 100 Trillion (the 100Trillion note buys 1 slice of bread)

https://www.100trillions.com/products/zimbabwe-100-trillion-dollar-bankn...

Coming to Amerika SOON.

 

(I bought a 100 stack of 100 Trillion and 1 stack of the 50 Trillion notes - so I got you all beat - in Zimbabwe, I'm a multi Multi MULTI Trillionaire) ;->

Raffie's picture

5000 note that cost 50,000 to print.

Pure comedy because it writes itself.

Frito's picture

Soon they'll all be Billionaires

<thumbs through stack of $1B ZIM notes>

JLM's picture

Can you explain the Japenes market melt up and crash decades ago with this theory.  Interesting ... .

813kml's picture

They should just put vinculum marks over the zeros and be done with it.

hedgeless_horseman's picture

 

Eventually, they'll just ban cash and be done with it.

auricle's picture

They should have made them with scratch off 000 at the end. So that in a few months when these bills are no longer useful, one cand just scratch and reveal 000 next to the existing numbers. No, need to reprint. 

auricle's picture

Better yet on each bill you can put 3 (or more) prices. While the first value is acceptable use this. If hyper inflating government dictates that price two is now official. If even more hyper inflation occurs government can dictate that value three is official. No need to keep reprinting currency. Personally I'd do away with all the fine graphics and print a list of prices adding a zero to each line from 100 to 1,000,000,000,000. Then you can use the same bill until the actual reset hits. 

phase 1: 100

phase 2: 1000

phase 3: 10000

phase X: 1,000,000,000,000

BTFDemocracy's picture

I had as similar idea, but your is better. Saving the rain forests! Wohoo!

John_Coltrane's picture

Will scientific notation be the next step?

Customer to Shopkeeper: Do you have change for an Avagadro? (Avagadro defined as approximately 6.2 x 10^23? A real mole of money for a country in a hole!

RedDwarf's picture

"Seems like you could fit more zeroes if they were printed in landscape mode instead of portrait"

Nah.  Just do a simplified e notation.  Instead of 1,000,000,000 just print 1e9.  Then when 1,000,000,000,000 becomes the new normal, just print 1e12.  Too many zeroes fixed!  LOL.

Itinerant's picture

In landscape mode you generally have the denomination printed on the corners, zeroes running off the right-hand corners.

This format has already reserved lots of space for those extra zeroes without having to rearrange any elements.

Truther's picture

Going full-Zimbabwe was a maduro wet dream

Idaho potato head's picture

That could never happen in the US......

MegaOlmecanManiac's picture

Ooooh, babe
Don't leave me now.
Don't say it's the end of the road.
Remember the flowers I sent.
I need you, babe
To put through the shredder
-RW

DontGive's picture

Such a modern country. They have a woman on the note.

When is the US getting Tubman on a note?

Dennisen's picture

Once again, I quote:

"Government is the only institution that can take a valuable commodity like paper...
And make it worthless...
By applying ink."

Ludwig von Mises

Croesus's picture

When do we change the name of their currency to the "Venebabwe dollar"?

DavidC's picture

Hilarious. India and EU doing away with higher denomination notes because terrorists and drug cartels will use them (yeah, right) and Venezuela is INTRODUCING higher denomination notes.

Sheesh.

DavidC

OfAllElaboratePlans's picture
OfAllElaboratePlans (not verified) Jan 16, 2017 10:22 PM

Where's Blankfein's portrait?

 

portrait vs. landscape needs to be worked out in the right way to account for the nose

King Tut's picture

Orange Jesus is going to replace Andrew Jackson with Llyod B.

hedgeless_horseman's picture

 

While the new denominations should make cash transactions easier the relief may be short-lived: since the largest, 20,000-bolivar note is worth less than $6 on the widely used black market, Maduro already has to order a fresh batch with at least one more zero. With inflation forecast by the International Monetary Fund to hit four digits this year, few economists expect the currency to rebound any time soon.

Print more money...with an extra zero...to fight inflation.

I get it!

It's a joke.

lol

Get it?

More money...for less inflation.

It's funny!

lol

That is really good.

Someone translate it into European and tell it to Mario Draghi.

He'll get a kick out of it.

DarkPurpleHaze's picture

They look like a small raffle ticket.

chunga's picture

The brand new US dimes have a synthetic fake feel to them, almost like a toy. If only Venezuela had enough military power, then they could just kill off the countries that refuse to use their boliviatsies. It works better like that for a while anyway.

Frito's picture

It's all monopoly money

King Tut's picture
King Tut (not verified) DarkPurpleHaze Jan 16, 2017 10:30 PM

You're gambling that it won't be devalued by 50% overnight- kind of like the US dollar.

HRH Feant's picture
HRH Feant (not verified) Jan 16, 2017 10:24 PM

Basically Venezuela has said, "make it so."

Money from air. For now.

King Tut's picture
King Tut (not verified) Jan 16, 2017 10:27 PM

No Aunt Jemima on it?