What Hyperinflation In Venezuela Really Looks Like

Authored by J.G.Martinez D. via Daisy Luther's Organic Prepper blog,

The intention of this article will be to describe how the prices went wild, and what you could expect in a hyperinflation scenario. Perhaps softer, or perhaps worse, that is not possible to know for an amateur like me, not being an economist. But something similar to this is what could be expected in the real world, not in some hypothetical scenario of the theoretical economy..

For some reason that I will try to elucidate afterward, the salaries stopped being useful for buying anything other than food. The prices I will publish in our national currency, the Bolivar already were rounded by taking 3 zeroes by Uncle Hugo´s command. A few days ago, this was done…again, now by command of the bus driver, in an attempt to make the hyperinflation look less threatening. Go figure.

One Bolivar is worth 0.000020 USD. The minimum wage is $5.21 or 1.800.000 Bs for a month. Now, how could we expect someone to live under these conditions? It is entirely unexplainable to me that this has not generated massive riots…yet.

Here are the hyperinflation costs of basic items in Venezuela

Remember, many people are paid only 1.800.000 Bs for a month:

  • Vegetable oil 900ml. Bottle: 748.367 Bs
  • Cereal mixture for milkshakes: 900Grs can: 1.057.057 Bs
  • Wheat flour, 1 kg: 398.750 Bs
  • Cheese, 1 kg:  2.160.950 Bs (yes, TWO MILLION)
  • Chicken and Bacon: 2.299.500 Bs
  • 395Grs Condensed milk w/sugar: 566.144 Bs
  • Oatmeal 400 Grs:  550.000 Bs
  • 1 kg. Margarine: 747.000 Bs
  • 1Kg Chocolate mixture for milkshakes: 2.060.000 Bs
  • Cheese (melted-for spreading) 300 Grs: 1.097.230 Bs
  • Black Olives 235Grs: 1.677.120 Bs
  • Ladies deodorant: 890.000 Bs
  • Insecticide 1 can: 900.000 Bs
  • Mayonnaise 910 Grs.: 955.000 Bs
  • 2 toilet paper rolls: 399.974 Bs
  • 1 Kg. avocados: 500.000 Bs
  • 30 Eggs: 650.000 Bs.
  • Dog food, dry, bulk 20Kg: 6.060.000 Bs
  • Dishwashing soap, cream 500 Grs: 440.000 Bs
  • 2 door fridge: 627.900.000 Bs (yes, six hundred MILLION)
  • 400ML. Shampoo:  2.052.050 Bs (2 million)
  • 4 small ice cream cups: 2.072.691 Bs
  • Rice 500 Grs: 115.277 Bs
  • TV 65 inches: 329.999.990 Bs
  • 2Lt soda: 298.000 Bs
  • Lemon Juice, 500ml bottle: 731.881 Bs
  • Light bulb, power saving: 935.000 Bs
  • Shoes: 5.986.825 Bs
  • Catfish: 465.300 Bs
  • Sweet corn 400Grs: 466.480 Bs
  • Ground meat: 1.150.000 Bs.
  • Steak: 1.300.000 Bs (depending on the region, usually cheaper in cattle-producing states)
  • Pork chops: over 1.000.000 Bs
  • Corn flour, 1 kg: 265.000 Bs.
  • Dollar price: 350.000 Bs / 1 USD

How people are reacting

One of the most amazing things I have seen is that people are in total denial, and they refuse to accept that the money is not worth even the paper it is printed on. They won’t innovate changing to cryptos easily, nor will they accept silver coins, much less other precious metals. They won’t barter, they won’t trade their labor time (I mean major cities, in my small town things are a little different). We had a good supply of silver coins in the 60s, but that changed.

They talk and talk, complaining about the government, but they just don’t do anything. I have seen some small plots in our subdivision with tomatoes plants and other vegetables, but that is just a salad for one lunch. And the people passing by will take whatever is within their hand’s reach.

The electronic money has been devaluated much more than cash. Something with a price in cash, if you try to pay with debit card or money transfer via internet the price will be 2 or 3 times the cash price. Illegal? Yes, it is. But there is no way to control it.

The main problem arises because it is the military taking over the supply chain. They have an agreement with the gangs, and they deviate the production of the plants that are under military control, to the street sales. The gangs are armed, and they protect the retail sellers from thieves and turmoil. This is in the most populated cities, where the money is, and therefore the products don’t make it so often up to the smaller towns.

The black market offers of tires, food, car spares, engine oil, and all kind of medicines and goods are rampant, and the social networks are full of resellers. You may expect a morality crisis, in parallel with this economical crisis. I asked a granny how much was charging for some hand towels she had for sale, and I did not have enough money in my pocket to buy even one towel…I apologized but saw she was upset. It was a sad, awkward moment indeed.

Senior citizens are taking a beating. Their pension is not enough for one week worth of food. Jeez, maybe once this is published it will be not enough even for a couple of days…the clowns that tried to sell the “petro” just realized that this snake oil did not work.  The calculated inflation is 13.000%. Without money from the IMF, having paid the debt, and kicked them out of the country…the disaster arrived anyway. The government just does not want to do what they have to do. There are too many military personnel involved in the black market and an uprising is more than possible that will launch the gangs in power off to the ground if some of them are disturbed.

How people survive

To find a medium of exchange, and at the same time capable of holding its value until you actually need to exchange it is not easy. Cigarettes, chocolates, all kind of commodities have been used, and there is a small but growing trade with this stuff. Not at the dimensions one would imagine, but generally speaking, the financial culture in our society is almost unknown. There is no such thing as a stock exchange (but there was one, in the past), and whatever other things that smell like the free market, the gov carefully removed. People clamor for “price control” without even realizing that it is not the price but the lack of production what is starving them.

I have known some people that even received satoshis as a medium of payment for food or car parts. However, as the BTC has been going down these last weeks and the amount of satoshis to receive is calculated based on the USD price, this trading has been slowing down.

As I have mentioned, the country is already collapsed. Those self-employed that could adjust their fees for their service from one day to another, and that could receive, say, a bag of sugar for their valuable services are those who are not overly stressed to leave the country. This is one of the most important lessons, I think. Someone with manual, valuable skills, that could provide basic goods or services, will be able to survive. They will just adjust their prices…and if the customer can´t pay, then most likely they will trade in their service for something to barter. People with low maintenance trucks,  that have received meat as payment in a farm for transporting a load of hay (many farmers have to buy hay down here in the dry season because they don´t have the machines to compact it and there is no rain for the pastures to grow). They exchange the remaining meat for cheese, poultry, and fish. Or the electrician like my dad got paid with half a pork for one day of work at his friend´s farm rewiring an old corn mill. He took the excess as a gift to one of my cousins, and got back 6 kgs of pasta, and 2 of sugar.

This is how we, in the small community I was born and raised and my family is lucky to live yet, are dealing with the criminals that have imposed the crisis. These are the places where people support each other because we know everyone since we were small kids. We grew up together, went to school, and celebrate birthdays, Christmas, Mardi Gras together. We cried when our elders were gone, all together. I have found people from my hometown in the opposite side of the country that I did not remember, and they had gone to basic school with me, and after a few anecdotes, we were laughing and shaking hands. This is the kind of community that will struggle but will survive.

The other ones?. The big city dwellers?…

The hardworking father of three, with a minimum wage, is starving, and watching their family starve too. Some of them quit their jobs and started a life of crime. Other ones leave their families behind and don’t come back. Other have been kind enough to tell their families that they will be in this or that country, and never appear again.

Many have committed suicide.

Elders do it because they don’t want to be a burden nor an additional weight for their family.

Youngers because they don’t see themselves in such apocalyptical scenario. Normal stuff in other countries like buying a car, a house, having children, graduating from college, seem to be impossible tasks, no matter how hard you work for that.

The official rate of suicides is not something that can be trusted. The gang that claims to be a government is covering up even the starvation deaths of the children in the hospitals, in an attempt to avoid further international sanctioning.

They are forcing doctors to fake the cause of the deaths in the reports.

And this, ladies and gentlemen, is what hyperinflation and a collapsed country looks like.

May God bless us and protects us all.

Note: Thanks for your generosity, to those who have contributed to get my family out, and those who will assist us in the future.

Comments

???ö? Mon, 04/16/2018 - 21:38 Permalink

fuck these people who voted for a communist time after time. what do they think happens in a non-market economy. shortages. that's fucking what. this isn't hyperinflation.  its a fucking supply-demand failure caused by communists.  enjoy your 25 cent gasoline, because that's what you voted for, idiots. since you blew your credit scores, and can't get a loan, maybe you can call the other mental midgets in cuba and north korea, comrade to comrade, for help as a matter of principle. sad. yes. sadder yet that ignorance brought it upon themselves.

COSMOS wee-weed up Tue, 04/17/2018 - 04:07 Permalink

Who cares about fiat when you have land to grow your own stuff.  Just look at native Indian populations still left in Venzuela, clothing comes from stuff woven from plant fiber.  Food and fish are bountiful.  Heck they make their own paints and canoes.  Who needs the stinking fiat. Only those who were drive off their lands and herded into the city to be central bank slaves. A fish and a banana will always be a fish and a banana, something fiat can never do.

In reply to by wee-weed up

Bryan El Oregonian Mon, 04/16/2018 - 22:16 Permalink

That's just it.  I don't think "prepping" alone is a viable answer in a Venezuela scenario.  Storing up your own supplies and gold and having bullets to protect them really is not going to work very well.  Look at his comments:  "  Someone with manual, valuable skills, that could provide basic goods or services, will be able to survive.  "

You need to be an invaluable contributor with skills that others need.  You need to find a community that will work together to survive.  You need access to basic resources like water and shelter.  You need to be flexible.

I just don't think building a fortress or an underground bunker is the way to go.  The Selfie generation will be the first to die off.  Those that have basic skills and interpersonal connections will survive.

In reply to by El Oregonian

???ö? Bryan Mon, 04/16/2018 - 22:25 Permalink

Big cities, where the biggest problems always lie, are cesspools of liberal incompetence. This includes American cities where you are likely to find community organizers, identifiable as people who are all talk, no work. The pigs in Animal Farm.

Big city inhabitants would die in a month without the help of some distant, unknown, thankless farmers.

In reply to by Bryan

Oldguy05 Bryan Mon, 04/16/2018 - 22:38 Permalink

Check out this conversation I had with "a New York Banker":

 The New York Republican • an hour ago

Why are a bunch of Reality TV stars clamoring for The White House. We need people with political experience, Trump has embarrassed us enough already, and Oprah sounds like the liberal equivalent of trump, left wing populism. I would like to see an economist or a banker in The White House, if we can't find anyone on The Hill, someone like Ben Bernanke wouldn't be bad.

    Me The New York Republican • an hour ago

    You sir, are certifiably insane! An economist? A Fed Chairman? Why not let Cohn, an ex Squid president run the country? They already do anyway but at least let us makebelieve we are not run by the banksters!

 The New York Republican • an hour ago

Yes an economist who understands the economy, and maybe you hate bankers but as a Private Banker I can confidently say I know more about our economy and financial markets than over 95% of the population. Bankers keep this country going. Trump is nowhere near as qualified as those people to run our country.

    Me The New York Republican • an hour ago

    My good Sir, I myself have a simple hobby. I read all I can about what's happening with our economy. I hear the Austrian and Keynesian theories. I follow the market every day. I watch everybody's chart porn. I read many economists and analysts. It's almost always WRONG! The people you give qualifications are the people that have brought us to where we are today, Sir. I question the intent of your posts.
    
    The New York Republican • an hour ago

    That is incorrect, if you chart our economy over the last 100 years or so, what we see is that we have a long term trend line of economic growth, the issue is that no politician has looked for long term solutions, but a sense of stability has been maintained barring the Great Depression. The president occupier of The White House lacks the decorum or education to manage our economy effectively/ I subscribe to the Chicago School of Thought, which drove Ronald Reagan's administration in the 1980s. Economists may not be able to predict the economy but they can make good suggestions on the institutional changes that are required. I majored in economics and now work as a Private Banker on Wall Street. My intent is to fix this country and bring about a sense of normalcy.

    Me The New York Republican • an hour ago

    Growth measured by what? The dollar? It's worth .04 of what it was worth in 1913 when we gave away our constitution to The Fed. GDP? Bond yields? How's that working out for you? You guys are scrambling to pull in what Main Street is left and there isn't much. Good luck with normalacy. Normal has never looked like this, except in the 80s and in 2007...Only this time IS the same..On Steroids! Are you going to do anything about derivatives when that goes south? No. You can't. So try and line up your muppets for the slaughter to save your ass. Good luck.
        The New York Republican • 41 minutes ago

    2018 is a worrying year by all accounts and with record low interest rates around the world, and the stock market bubbles in America and India fed by speculation has worsened the situation considerably. Nonetheless I'd rather have a guy at the helm who understands the economy than a reality Tv star.
    
    Me The New York Republican • 34 minutes ago

    I'm not so sure that he doesn't understand. Granted the stock market is in a huuuge bubble, as he said during his campaign. I don't know why he wants to take the credit for it as when it pops all will blame him. But it;s been a good year economically when it shouldn't have been. I think he's much more than a reality tv star and seeing that he has all the vampire squid around him I don't think your assumptions about him are correct. Are you telling me that you know more than the president of Goldman Sachs?

    edit: The president doesn't need to be an economist. He needs to be The President, and a delegator which he seems to be. Almost all economists and analysts get it wrong. They live in Academia, not the real world. Rogoff, Summers? I hate those guys. They;re just minions of a cashless society NWO baloney ruin the world line of crap! You want an economist in the most powerful seat in the world? You must not have any children

In reply to by Bryan

jin187 Bryan Tue, 04/17/2018 - 00:45 Permalink

Yep.  The only skill that really matters in Venezuela is how fast, how far, how accurate, and how often can you shoot.  If you need a car repaired, all you have to do is go enslave a mechanic.  They might even be thankful, seeing as how you'll have to feed them in order to keep them repairing shit, and I doubt they'll care that the food was stolen from their neighbor's kids.

In reply to by Bryan

armageddon addahere Bryan Tue, 04/17/2018 - 11:44 Permalink

The big lesson to me is that those who live in small towns and rural areas, have a network of friends and family, and have some manual skills will wind up ok. Loners who live in the city are goners. Guns and bullets have limited use, you can be part of a bandit gang and survive until you run up against a bigger bandit gang, or the army, or until everyone runs out of things to steal.

The same lesson - extended families survive, everyone else goes to the wall - came out of eastern Europe after the collapse of the Soviet system.

In reply to by Bryan

takeaction ???ö? Mon, 04/16/2018 - 21:54 Permalink

Want to torture your friends?

Ask your friends...or My favorite thing is to ask any person in the "Banking Industry" several questions...

Define "Fiat" currency.

Who owns the Federal Reserve?

How is money created?

Describe fractional Reserve Banking?

I have YET to have one person answer even ONE of these basic questions...and I am not a Banker...Hilarious...

.

Another good example to make your friends and families heads explode is put a $20 bill next to something like a Wine Glass...or even a quarter, or several pens anything to make your point and ask them "Which one is worth more?"  Of course they always go to the piece of crap photocopied piece of paper.  When you explain to them that this is just a 1 cent piece of paper, and the other object has far superior value...once in awhile you get the lights to turn on.

Another great comment is this.  "You trade your life for pieces of paper that somebody photocopies...Right?"   It is true.  No matter what your wage...if you are not earning your income passively, then you are trading your best hours of your life for pieces of paper.  This is a mind blower if they get it.

In reply to by ???ö?

armageddon addahere takeaction Tue, 04/17/2018 - 12:11 Permalink

They call it Fiat currency because it depreciates like a rusty Italian car.

 

Nobody owns the Fed, it owns you.

 

They used to just print the stuff but that was inflationary and eventually you ran out of paper. Now they print bonds with 0 interest and exchange them for money in the form of digital 1s and 0s. Then give the money to the big banks who loan it back to the government. This is much more efficient at making the rich richer, while avoiding inflation by keeping money out of the hands of peasants who might spend it.

 

Fractional reserve lending means you can write checks for $3500 for every $100 you have in cash. But if you lose $101 you are insolvent in other words, bankrupt. This does not matter as long as the government is shooting money into your wallet with a fire hose.

 

Now let me ask you one. What happens when a government borrows so much money the interest payments take half the tax revenue and they would have to sell the whole country twice over to pay it back? Trick question, nothing happens, who is going to stop them?

In reply to by takeaction

Lore ???ö? Mon, 04/16/2018 - 22:08 Permalink

Lest we forget, this is the same old formula wrapped in a different package...

US Regime Change in Venezuela: The Truth Is Easy if You Follow the Money Trail (Global Research, Jul 2017)

Venezuela’s ongoing crisis is not driven by political ideology – it is not a battle of socialism versus capitalism or dictatorship versus democracy – it is the result of two centers of political power possessing opposing interests and colliding geopolitically.

In reply to by ???ö?

???ö? Lore Mon, 04/16/2018 - 22:18 Permalink

Socialism is just a pleasant word for communism.  Same disease.  Same symptoms.  Hyperinflation is NOT the problem.  A centralized, non-market economy is the problem. Military control is a symptom, not a cause. Shortages arise from supply/demand failures that communism/socialism create.

In reply to by Lore

MasterPo ???ö? Mon, 04/16/2018 - 22:59 Permalink

Yes, but the price is extreme.

My heart bleeds for these good souls.

Venezuelans are wonderful people who live in an unspeakably beautiful country, but have made the tragic mistake of trusting their government.

They are now learning the painful, but necessary lesson that you can never, never, EVER trust government. It is one (clearly not all) of the most evil things ever conceived in the mind of man.

[you have been warned...] 

In reply to by ???ö?

jin187 Justin Case Tue, 04/17/2018 - 01:03 Permalink

You seem to equate welfare expenditure to only alms for the poor.  Food stamps and shit.  That's a drop in the bucket to corporate subsidies, kickbacks, and tax policies designed to artificially pick winners and losers, for personal gain and cronyism.  Even the tax code itself is one big welfare system, purposely designed to be burdensome to the individual, in order to prop up the corrupt tax preparation and accounting services, that spend most of their free time lobbying to make sure they never become obsolete due to a reduction in tax complexity.

In reply to by Justin Case

Kokito ???ö? Tue, 04/17/2018 - 01:46 Permalink

J.G. Martinez D is a member of far-right fascist oligarch opposition to the Bolivarian revolution in Venezuela. J.G. Martinez D was involved in the conspiracy, by the oil industry (PDVSA) in 2002, to remove Chavez & was forced to move to FL.

 

The Organic Prepper  is a private independent company with 1 owner (CEO) & 8 employees with a revenue  of $92.9K (owler.com/company/apartmentprepper#!).

 

The Organic Prepper, similar to ZH & SHTFplan makes its money by spreading doom and gloom to sell their products & propaganda. The OP mockingbirds (((prestitutres))), just lie ZH, hates the social revolution in Venezuela for one simple reason, they are a group of anarchist that advocates self-governed societies based on stateless societies & opposing authority or hierarchical organizations like communism, collectivism, syndicalism, mutualism or participatory economics.

 

And Tyler Durden (who ever you are), you are a dumb MF & a stupid shit. Go fuck yourself.

In reply to by ???ö?

UndertheDRADIS Kokito Tue, 04/17/2018 - 10:56 Permalink

Let me guess, your IP address is in Westonzuela or Doralzuela, where you enjoy your mansion while admiring socialism from a safe distance.

 

You got food for my wife's in-laws? La revolucíon can't seem to keep them fed. You got medicine for my wife's stupid chavista relatives? One of her relatives already died because la revolucíon couldn't provide an over-the-counter medication in their wonderful socialized medical system.

 

The good news is that la revolucíon has made venezolanas available for a couple of dollars per night. If your main exports are raw materials and prostitution, your country has failed.

In reply to by Kokito

RedBaron616 ???ö? Tue, 04/17/2018 - 06:52 Permalink

It could happen here. It could happen anywhere. Get off your high horse. Economics isn't taught well in schools, so small wonder people think price controls are a good thing. The recent Venezuelan elections have been frauds because surely Maduro would be back driving a bus if he wasn't swinging from a lamppost first.

In reply to by ???ö?

UndertheDRADIS ???ö? Tue, 04/17/2018 - 08:26 Permalink

Whenever Mrs. UndertheDRADIS used to get calls from her chavista relatives whining that they were hungry, she would ask, "Isn't la revolucíon feeding you? They mostly stopped calling, but her sister gets together with other Venezuelans in South Florida and puts together a shipping container every once in a while, which I am sure the government employees steal half of.

In reply to by ???ö?