Venezuela Bolivar Loses A Third Of Its Value In The Past Week

Tyler Durden's picture

With events in Venezuela now well into the endgame, following US sanctions that named "dictator" Maduro personally and a likely subsequent sanction that will cripple Venezuela's oil industry promptly resulting in the nation's insolvency as it loses its last remaining source of revenue, things are moving fast. So fast, in fact, that according to Reuters, Venezuela's money supply surged 10% in just one week earlier this month, its largest single-week rise in a quarter of a century.

Meanwhile, in addition to now daily protests and strikes, Venezuela is undergoing a major economic crisis, with millions suffering food shortages, monthly wages worth only the tens of U.S. dollars, and soaring inflation - although no official data is available.  The central bank said late on Friday the total amount of local currency in circulation, or M2 as of July 21, was 27.3 trillion bolivars, up 9.66% from the previous week.

Obviously, the exponential rise in M2, the sum of cash, together with checking, savings, and other deposits, also means an exponential rise in the amount of currency circulating. As a result, Venezuela's money supply is up 384% in the last year. In contrast, the United States' money supply is up 5.5% in the same period.

This means that Venezuelans are forced to carry huge bundles of cash to make basic purchases, if they can afford to do so given weekly price rises on many goods of course.

This means hyperinflation.

Today, the Dolar Today website reported that Venezuela's black market exchange rate surged past 14,000 bolivars per dollar.

When President Nicolas Maduro came to power in April 2013, it was at 24 per dollar.

Putting the country's bitter economic end in context, the bolivar has lost a third of its value in the past week.

 

That takes care of the economy, as for how how socialism ends in a social context, in a poll released today Gallup found the Venezuela is now the least safe country in the world.

Venezuela's score on Gallup's Law and Order Index -- its annual global gauge of how secure people feel -- continued to follow the country's descent into chaos in 2016. The country's index score of 42 out of 100 was the lowest in the world last year. This number is likely even worse now as the country's economic and political crisis deepens, including the election on Sunday that critics, including the U.S. and a growing list of nations, are denouncing as a "sham."

 

Across 135 countries, Law and Order Index scores in 2016 ranged from a high of 97 in Singapore to the low of 42 in Venezuela. The index is based on people's reported confidence in their local police, their feelings of personal safety, the incidence of theft in the past year and -- for the first time in 2016 -- the incidence of assault and mugging in the past year.

 

Venezuela's scores on all of the individual questions that make up the current index were worse last year than at any point in the past decade. Just 12% of Venezuelans in 2016 said they felt safe walking alone at night where they live, and 14% expressed confidence in their police. These are not only the worst on record for Venezuela, but the worst for any country last year -- and for the past 10 years.

 

To put Venezuela's 12% who feel safe walking alone at night into perspective, the next-lowest figure in 2016 was more than twice as high as Venezuela: 28% in El Salvador. Among the 12 countries in which residents are least likely to say they feel safe walking alone at night, five are in Latin America. Another six are in sub-Saharan Africa -- including two of that region's more economically developed countries, South Africa (37%) and Botswana (38%).

 

At the same time, 38% of Venezuelans said they had had property or money stolen in the past year. This is up more than 10 percentage points from the previous year and a new record high for the country. Only five countries -- all in sub-Saharan Africa -- had higher percentages than Venezuela in 2016. 

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Too-Big-to-Bail's picture

If they can just hold out a little bit longer, the US dollar might catch up soon

Truther's picture

Race to the finish. It won't be long now.

Haus-Targaryen's picture

Another thing that keeps surprising me -- how is Venezula not in a complete civil war at this point?  Maduro just won 100% of the "parliament" while simultaneously controlling the judiciary, the military, the intelligence services and the police?  

Please, that guy is going to go down in a ball of flames as he sucks his entire country with him. He's studied color revolutions for some time and will likely come down on his population like the iron fist of Stalin.  That place gets way worse before it gets better. 

For the people who voted for Socialism ... serves ya' right.  Enjoy your cake and imported Cervesa. 

LargeHardonCollider's picture

Two men are waiting in a food queue and one of them finally snaps. “That’s it,” he announces, “I’m sick of lines, and I’m off to shoot Nicolás Maduro.” With that, he storms off, only to return an hour later, and jostle back into his former spot. “Well, did you do it?” asks his companion. “I couldn’t,” the man says. “The line to kill Maduro was even longer than this one.”

Jim Sampson's picture

Not real Socialism...

 

When do they start eating each other?

Stuck on Zero's picture

I always feel safe walking alone at night. Everyone is safe walking alone at night. It's when you're joined by others, including muggers, that you're unsafe.

 

Blue Balls's picture

Venezuela has been in melt down for years now.  Up to now the government has had the biggest gang of thugs.  With the insolvent federal government now you have a real competition between the gangs for power.

It was fun but now it's really fun out there.  

A Marxist dream come true.

HisNameIsRP's picture

But Venezuela is not Bernie's "Democratic Socialism" because that has never been tried yet.  Just ask him, he will tell ya, and so will his supporters.

Lore's picture

Certain ZHers appear to suffer from a peculiar mental block re: source of the trouble in Venezuela. Maybe this will help them to deepen their analysis:

US Regime Change in Venezuela: The Truth Is Easy if You Follow the Money Trail (31-Jul)

"While the Western media attempts to frame Venezuela’s crisis as a result of “socialism” and “dictatorship,” it is clear by reading the West’s own policy papers that it is owed instead to a systematic assault on Venezuela’s sociopolitical stability and economic viability, spanning decades...


One needs not be a fan of “socialism” to understand that the ultimate outcome of Venezuela’s collapse will be a further concentration of power in Washington and Wall Street’s hands. Such power, regardless of whatever ideology it is superficially wielded behind, will always be abused. Regardless of the alleged form of government a nation may take, as long as it is a step away from unipolar globalization, it is a step in the right direction.

 

The crisis in Venezuela is not one of socialism versus capitalism or dictatorship versus democracy – it is one of hegemony versus national sovereignty, of centralized unipolar power versus an increasingly multipolar world."

Why is Venezuela in the White House’s Crosshairs? Confronting The Neoliberal Propaganda Media Machine (11-Jun)

"In his hour-long presentation, the Ambassador introduced the issues at stake by explaining that Venezuela today has the largest known oil reserves in the world and the fourth largest deposits of gas; that the US is importing 60% of its lush energy use (a distant first of the globe’s per capita energy users), mostly from the Middle East, where it is subject to long and costly transport (40-45 days), and to many risk factors, including the Gulf of Hormuz, controlled by Iran, where today about one third of all the world’s petrol must pass through.

 

By contrast, shipments of petroleum from Venezuela across the Caribbean to the refineries in Texas takes only 4-5 days.

 

This is the main reason why Venezuela is in the White House’s crosshairs, plus, of course, the fact that for Washington it is totally intolerable to have a sovereign socialist Republic in its ‘backyard’ – and so close, the same syndrome applies also for Cuba, a genuinely successful socialist nation, having survived almost sixty years of atrocious and criminal American strangulation. There is no tolerance for sovereign independent countries that do not bend to the dictate of the United States and her behind the scene handlers."

Lore's picture

Mere downvoting is cowardice. Can you defend a better-informed viewpoint? 

mrtoad's picture

The USA want their vassal country back.

pashley1411's picture

Maybe not.   The Castros and Kims of this world are still living large.    Just have a paid-off minority, with guns, and the will to use them.    The modern age given dictators the firepower and communication to herd the rabble back into their hovels.

Venezula may simply join the ranks of black-hole countries; exporting oil, coke, and misery.

 

TheReplacement's picture

Kinda sucks for the nearly 50% who did not vote for socialism.  Just saying, since you are gloating.

seabiscuit's picture

Virtuoso player Felix Martin from Venezuela with the civil war in Venezuela as a backdrop. I'm fairly certain it aint skittles and cerveza.

GunnerySgtHartman's picture

At the rate the bolivar is sinking, it won't be long before it makes Enron stock look like a good investment.  /s

Bay of Pigs's picture

And where is Steve Hanke, the guy who bashed Tyler and ZH for suggesting that Venezuela was suffering from hyperinflation?

Another "expert" who missed it by a country fucking mile.

Killtruck's picture

Another win for Socialism!

Bernie? Bernie? Is he at his beach house, or what? 

SloMoe's picture

Solves their toilet-paper shortage problem...

Conax's picture

I bet their stawk market has gone to the moon!

youngman's picture

Well he can put a lot of people to work printing money...Socialism is cool...just ask a grad student

MrSteve's picture

Maduro doesn't print currency, he buys it from currency printers who fly it in in 747s. The last shipment was held up as the check to the printer wouldn't clear.

https://www.bloomberg.com/news/articles/2016-04-27/venezuela-faces-its-s...

Maduro insisted on many small denomination bills so they "wouldn't look like Zimbabwe" or some such foolishness with trillion-level notes. Venezuela is in full societal breakdown, and with oil reserves greater than Saudi Arabia's. The common people need a lot of divine intervention, right now.

Yen Cross's picture

  The Bolivar is starting to look like the VIX.

Doppelganger71's picture

Weimar Venezuela.......................

Dragon HAwk's picture

I take it  Gold or a US Dollar is too valuable to Show in Public.

wcvarones's picture

Venezuela is already screwed, but I don't think US sanctions are going to make it worse. Oil is fungible. If we don't buy it, somebody else will.

youngman's picture

Not theirs..they have a heavy high sulpher oil..only a few refineries can distil it...3 are in the USA....

Ben Tornilloed's picture

PdVSA has to blend their production with lighter oil to even ship it on takers.  Orinico oil is a very small step above asphalt.

DRTexas's picture

We get < 6% of our oil from Venezuela.  This could easily be replaced with domestic, Canadian, or Mexican oil. Or a combination of all three.  It would not show a blip on our oil radar.  It would, however, cause Venezuela to go into an immediate default on outstanding debt.

johnnycanuck's picture

"This is how socialism ends"

Swedish Krona to USD

http://www.xe.com/currencycharts/?from=USD&to=SEK&view=1Y

 

USNews Best Countries ranks Sweden above US

https://www.usnews.com/news/best-countries/overall-full-list

 

Hows your healthcare system doing Tylers?  No doubt you will point to how great your Military Industrial Complex is doing, wut?

Haus-Targaryen's picture

Not sure why you're conflating Sweden (a free-market based economy) with Venezula (1930's Soviet-era Socialism).  

Are you actually this retarded, or are you just putting on for us?

johnnycanuck's picture

So you want to use the  "It depends upon what the meaning of the word 'is' is."  defense?

Sweden is often scorned as a socialist system on this very site, so yeah...get stuffed.

Haus-Targaryen's picture

Whoever says Sweden is "Socialist" is a moron.  You get stuffed you basement dweller.  

Those that believe in Socialism, in the Marxist tradition that was attempted over and over and over (and is currently in the process of failing in Venezuela) have a severe and incurable mental disorder. The only cure is starvation by the own doing. 

Gas yourself. 

johnnycanuck's picture

Slick Willie you're not, but you sure come across as one of those who screws up then doubles down instead of cutting their loses. You can't have it both ways, either Sweden's governance is based on Socialism and Socialist ideals or it isn't.

Expect you'll be trying to tell me there are no Communists in China next.

Haus-Targaryen's picture

You aren't intelligent in the least, despite what you tell yourself.  

You have the right to own the means of production and private property, Sweden is in no way Socialist.  

I know reading comprehension can be difficult for degenerates such as yourself, but I never said Sweden was a Socialist state.  

People like you have no purpose.   

johnnycanuck's picture

Here's something you need to try to wrap your little head around and although I expect  the source is one of your favorites, I doubt you will like the content as it pretty much destroys your pitiful little arguments.

What socialism? Private sector still dominates Venezuelan economy despite Chavez crusade

 

"In fact, the private sector still controls two-thirds of Venezuela's economy — the same as when Chavez was elected in 1998, according to estimates by the Central Bank.

The reasons are political and practical: Chavez knows most Venezuelans recoil from the idea of Cuban-style state control, and his government is far from being capable of taking over and running a majority of the economy.

"Basically he recognizes that in this day and age in a global economy ... complete state control would just doom the country," said Michael Shifter, an analyst at the Washington-based Inter-American Dialogue.

So his strategy has been to selectively nationalize companies, set up state-run supermarkets and promote worker-managed businesses, while trying to convince Venezuelans to accept his vaguely defined brand of "21st Century Socialism."

http://www.foxnews.com/world/2010/07/18/socialism-private-sector-dominat...

 

Now what was it you were saying about Soviet style socialism in Venezuela?  

Haus-Targaryen's picture

Socialism, the ownership (think "control") of the means of production. 

When you are having to set the price of bread and then dictate as a percentage how much flour can be used for pastries and how much for bread, whether it is state owned or not is not of relevance.  Have a warehouse full to toys?  That doesn't matter either, Maduro says "MINE". Why?  Because, Socialism leads to its logical result, a mass shortage of goods demanded. 

Your feeble little mind has a problem with correlation/causation. I wish your mother had believed in abortion. Do the world a favor and make up for her idiocy -- slit your wrists vertically you mental backwater. 

 

johnnycanuck's picture

"You have the right to own the means of production and private property, Sweden is in no way Socialist."

As the Fox article points out very clearly, so do people and Companies in Venezuela and the price of bread or a bunch of toys has little to no bearing on that.

You contradict yourself from one post to the next yet keep jumping from one shiny thing to another all the while seemingly oblivious to how idiotic it makes you look. 

Do the world a favor, find a tall building to jump off

Haus-Targaryen's picture

Whats the point of ownership if you lack control?  Think the bakers just threw themselves in prison because they were bored?  Think the toy company just gave away its entire inventory before Christmas for the hell of it?  

I thought I was insulting some /leftypol/ fag who appreciated that control is implied in ownership and without the former the later is just a legal fiction. 

Apparently I was wrong.  You're dumber than even I thought you were.  

 

johnnycanuck's picture

You're too stupid to learn obviously, instead you cling to imaginary scenarios based on talking points, aka propaganda you've heard or read. Some moron who thinks there is no price control in effect in the Robber Baron world of capitalism, like oil price bubbles, shale bubbles ponzi scheme and housing bubbles and the results thereof for example. 

That you even consider bread as representative of the system governing a country where according to it's Central Bank, 2/3rds of the businesses are privately owned shows your lack of acumen and understanding.  Like when you started out comparing Venezuelan socialism to Soviet socialism, then beat the feet to yet another vapid argument.

There are different types / implementations of socialism, as there are with capitalism and if you can't understand that simple reality then it's back to the tall building for you. It's the only cure for what ails you.

Haus-Targaryen's picture

Back to your /leftypol/ echo chamber with you.  

My imaginary scenarios are neither imaginary nor are they scenarios. Its objective fact and reality. 

Ownership is irrelevant if you lack control.  Its akin to having the government hold your property in trust for you, yes a different form of socialism, on paper, than outright state ownership but the end-result is the same.  Mass shortages. 

And when you have mass shortages of food, what and how bread is produced becomes very important -- and quickly. 

Your stick to the Atlantic, Vox and read Das Kapital once more.  I got to page four before finding my first error, you likely had a hard-on the whole time. 

But you keep talkin in circles.  You impress no one other than yourself, which is telling given your egregious use of the English language. 

Also relevant: http://i.4cdn.org/pol/1501701994304.gif

 

johnnycanuck's picture

"But you keep talkin in circles."

A dummy like you won't impress me with that tactic. It's you who talks in circles and does the helter skelter school of argument routine.  Maybe you should brush up on Soviet socialism and private ownership eh?

Btw, ownership is irrelevant in Robber Baron Utopia if one of them or several,  wants what you got or merely wants you out of the way.  If they can't beat you with their multi millions, they spend on a lot of ill begotten gains on 'lawmakers' so they can make it so.

"And when you have mass shortages of food,"  Maybe collusion somewhere in that 2/3rds private ownership has a bearing. Globalism too perhaps?   Loved that book 'Confessions of an Economic Hitman'. You?

One more thing,

"Ownership is irrelevant if you lack control.  Its akin to having the government hold your property in trust for you"

You mean like in the US, great bastion of Free Enterprise and Property rights as per 'Da Constitution', where the law of the land includes Eminent Domain?  Tell me oh great champion of the Peebles, in whose interest does the Gov't of the Land of the Free invoke that ditty?  It's a rhetorical  question but do answer O Knight of Simple Simon Land.

 

 

Haus-Targaryen's picture

Good thing I am not trying to impress you then.  My argument routine is simply holding your feet to the fire on your original argument, which you are in the fight of your life trying to wiggle out of.  

I maintain that Soviet Socialism and Venezuelan Socialism have the same end result -- debilitating shortages of even the most basic goods and services.  You tried to step in with "but in Venezuela there is private property, so its not real socialism", which is correct.  There is, in theory, private property in Venezuela.  If you don't do what the government wants with your private property, its either confiscated from you without compensation (unlike eminent domain) or you land in jail.

Then you attempted a series of ad hominems, which were neither creative or even remotely correct, and as of late you've circled back to your "well it wasn't real socialism" schtick.  

I feel bad for you, really.  You're stuck trying to defend the indefensible.  

Lastly, I find it ironic you equate corruption in the current capitalist system with the reason it fails to work long term (you're right BTW) -- but then are clearly incapable of applying that logic to the social model, of any kind.

I can tell you are a read individual, but you are an ideologue.  Interesting to have a philosophic conversation with, but an economic one you are clearly out of your league.  

As I've said over and over and over again on here, go back to /leftypol/ where you'll impress some blacked antifa chick.  Maybe she'll blow you if you're lucky.  

Village-idiot's picture

Any country that has a socialised medical system is a socialist country.

Haus-Targaryen's picture

This statement tells me you fail to understand what being a "socialist" nation means. 

johnnycanuck's picture

Pay no attention to Haus, his defintion of socialism is so fluid it defines his opinionating, He's just another auto repeat mechanism without a clue.

johnnycanuck's picture

"My argument routine is simply holding your feet to the fire on your original argument,"

That's a real hoot given I've been holding your feet to the fire over your crap commentary comparing Soviet socialism to the Venezualan variety.

Will read the rest of your Trump style 'entertainment' shortly.

Old Guys need entertaining too! :)

johnnycanuck's picture

"You tried to step in with "but in Venezuela there is private property, so its not real socialism", which is correct.  There is, in theory, private property in Venezuela."

Keep the laughs coming dude, it's like watching a clown peddling a unicycle backward.

I'll be bawk, after I serve the pissgheitti to the fambily.  :)   You're a hoot dude, really you are. That said,  the only cure still appears to be  the tall building.

DRTexas's picture

I am so sorry that the mean man hurt you mangina.  Quick!  Lay down and put some ice on it.  Come back when you feel better.

silverer's picture

I don't know why you even bother posting what you did. Everyone knows the US is sliding down to the bottom. Where have you been since 1983? You think posters here aren't aware of this? By the way, the name of the country is Swedelim, not Sweden.

Village-idiot's picture

What was Sweden is now unofficially called Swedistan.