Venezuela's Socialist Hyperinflation Turned People Back To Barter System

Authored by Mac Slavo via,

In the wake of socialist Venezuela’s massive hyperinflation, citizens have returned to the original monetary system in order to survive. 

While it is virtually impossible to visualize the inflationary trend in Venezuela, Bloomberg's Cafe Con Leche index signals a roughly comparable level of 43,478%. More absurdly, annualizing the last three months of data, paints an even more dismal picture: inflation of 482,153%.

Looking at just the past month, Reuters reports that June inflation accelerated to 128.4%, the fastest this year, from 110.1% in May, according to opposition legislator Angel Alvarado. Even more shocking, food prices rose by 183% in June.

"It is by far the worst hyperinflation suffered by a Latin American country," Alvarado said in an interview.

The barter system is now prevalent in the collapsed economy of the authoritarian dictator, Nicolas Maduro.

Barter is one of the best ways to trade goods, considering its almost impossible to tax those transactions and since money in Venezuela is as difficult to come by as food and medicine, that’s now the preferred method of trading goods and services. Women in Venezuela have been turning to prostitution and asking for payment in food instead of cash for a while now, and as the regime tightens its grip on the private sector, more will have to turn to trade to survive.

Once the richest country of Latin America, Venezuela, which sits on world’s largest oil reserves, now has a bleak future. People in this oil-rich country are scrambling for money, food and basic necessities. They have taken to swapping different items and even doing chores in exchange for packages of flour, rice, and cooking oil.

“There is no cash here, only barter,” said Mileidy Lovera, who is a 30-year-old mother of four. Lovera spoke with Economic Times while hoping to trade a cooler of fish that her husband had caught for food to feed her children or medicine for her son who has epilepsy.

Venezuela has experienced the death of cash. Payment for even the cheapest of goods and services would require unwieldy piles of banknotes or fiat currency, and there simply are not enough of those in circulation.  While wealthy formal businesses in cities can get by on bank transfers and debit cards, such operations are largely out of the question in rural areas.

The economic collapse, which began under socialist President Nicolas Maduro’s government, has driven nearly one million people to migrate to other places in search of food, medicine, or other basic life necessities. Others have stayed and fight each other with machetes for some “quality garbage” that is thrown out.

Economists have even begun placing the blame on the current government – a socialist regime which actually leans more towards communism (and the two are almost the same thing anyway). Many economists say the central bank has not printed bills fast enough to keep up with inflation.  “It’s a very primitive payment system but it’s also very primitive for a country not to have enough cash available,” said Luis Vicente Leon, an economist.


Adolfsteinbergovitch are we there yet Fri, 07/13/2018 - 02:15 Permalink

He can always die naturally. It's all in the definition of the term "natural". If you use natural ingredients it's probably going to be natural. For instance if I use organic oil and gas in my chainsaw it's going to be natural, albeit a little painful. 

Now on to a bit of semantics:

  • Once the richest country in Africa, Lybia...
  • Once the richest country in south America, Venezuela...

Did you find the connection? 

In reply to by are we there yet

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In reply to by Offthebeach

el buitre mad mad world Thu, 07/12/2018 - 15:58 Permalink

Socialism obviously played a major role in the collapse, but I wonder just how much Goldman Sucks teamed up with Langley helped them along?  Their descent into chaos just seems too fast for a natural evolution.  It took the USSR 70 years and while they had serious inflation at the end, they never had true hyperinflation like Weimar or Zimbabwe.

In reply to by mad mad world

Lore el buitre Thu, 07/12/2018 - 16:37 Permalink

Exactly. The 'socialism' line is oversimplistic and tiresome. Repeating it doesn't obviate the need to bring attention to other, arguably more important reasons for Venezuela's trouble. We should find it interesting to note how often articles on ZH selectively, consistently and stubbornly omit the rest of the story.

Why Everything the Western Media Tells You About Venezuela is Lies

Over the course of two tumultuous decades, the US government has determinedly endeavored to destabilize, undermine and ultimately depose the democratically-elected government of Venezuela without pause. First they came for Hugo Chavez, then his successor Nicolas Maduro.

What we're seeing is formulaic, consistent with the experiences related by John Perkins in his Confessions of an Economic Hit Man.

In reply to by el buitre

DaveA Lore Thu, 07/12/2018 - 16:49 Permalink

Socialism always collapses. The only variables are (a) how completely socialist the society is, and (b) how long the country can coast on natural resources before the extraction infrastructure falls apart. Chavismo lasted about 15 years before the wheels came off, longer than most critics expected.

If a trade-based, zero-resource city-state like Hong Kong or Singapore went democratic, all the trade would go elsewhere and they would be exporting millions of starving refugees in a matter of months.

In reply to by Lore

Lore DaveA Thu, 07/12/2018 - 17:02 Permalink

You miss my point utterly. 'Socialism' is the authorized narrative, to the willful exclusion of all else. Did you even read the piece from Sputnik?  (It doesn't have to be Sputnik; I can post others if it will help you.)

"In a sense, media misrepresentation of Venezuela shouldn't surprise — for one, the smearing of governments and leaders threatening to the US Empire's commercial and financial interests in Latin America has a long and established history. Guatemala's Jacobo Arbenz, Cuba's Fidel Castro, Chile's Salvador Allende and Nicaragua's Sandinistas were all subjected to intense media vilification during their periods in power. However, Alan notes structural issues within the news industry also play an increasingly pivotal role in distorting media reportage."

You've fallen prey to FAKE NEWS, a la NYT and WAPO.

Strive always to deprogram and dig deeper. Your analysis will be enhanced considerably by not limiting yourself to just one explanation. Always, there are reasons given, and then there are REAL reasons. 

Study the elite writings. What you see unfolding in Venezuela is a taste of things to come. The NWO future for all of us is a kind of socio-fascist-feudalist-pathocratic Global Plantation (their term): they own everything, we own nothing. 

In reply to by DaveA

Lore StychoKiller Fri, 07/13/2018 - 02:41 Permalink

Hayek was good, but he was also PC for his time. Why else does the lens seem selectively blind to fascism and other forms of social organization?

The choice of structure matters less than the quality of the men in charge. Humanity is led by a "dominant minority" subspecies of hereditary sociopaths.  The label 'Pathocracy' addresses the matter more accurately and inclusively. Control freaks don't discriminate: they hijack organizations of every stripe.

Political Ponerology:  A Science on the Nature of Evil Adjusted for Political Purposes

If the many managerial positions are assumed by individuals deprived of sufficient abilities to feel and understand the majority of other people, and who also exhibit deficiencies in technical imagination and practical skills - (faculties indispensable for governing economic and political matters) - this then results in an exceptionally serious crisis in all areas, both within the country in question and with regard to international relations. Within, the situation becomes unbearable even for those citizens who were able to feather their nest into a relatively comfortable modus vivendi.  Outside, other societies start to feel the pathological quality of the phenomenon quite distinctly.  Such a state of affairs cannot last long.  One must then be prepared for ever more rapid changes, and also behave with great circumspection. (2nd. ed., p. 140)

In this context, size matters: there is an optimal point beyond which government should NEVER be allowed to grow. One might think of it in terms of ROI, or even better, EROI.  Consider how much the average taxpayer benefits from military expenditure. Exactly.  Now you know why sociopaths and progressives love Big Government.  It's a kind of socioeconomic Safe Space, offering protection from things like morality and responsibility and accountability. And that's why sociopaths like the Clintons never see justice: the corruption becomes so endemic that to expose a part would risk exposing all.  Prospective whistleblowers have much more than their own fate to consider.  So the rot grows until the system becomes completely unworkable and something triggers collapse.  We're not quite there yet, but close. 

Humanity needs to develop a reliable mechanism for keeping rotten people away from power.

In reply to by StychoKiller

RockySpears el buitre Fri, 07/13/2018 - 04:36 Permalink

"Their descent into chaos just seems too fast for a natural evolution. "


  Zimbabwe did not take long and they did not even have Socialism to speed things up.


Were Langley et al involved in 1930's Germany?


Countries can fail real fast, regardless of the cause.  I suspect that in today's Hyper-connected world a country can go to Hell-in-a-hand-basket real quick.



In reply to by el buitre