Venezuela’s bolivar currency so devalued it no longer fits in wallets

imrs

http://www.smh.com.au/business/world-business/venezuelas-bolivar-currency-so-devalued-it-no-longer-fits-in-wallets-20161127-gsyrxs.html

It’s not easy to find someone who still uses a wallet in Venezuela, where inflation is expected to reach 720 per cent this year and the biggest bill – 100 bolivars – is worth about US5¢ on the black market.

The currency has dropped dramatically in value as Venezuela’s oil-based economy has tanked and the government has frantically printed more money. Prices, meanwhile, are soaring.

So Venezuelans must handle huge volumes of cash – so much that the bills don’t always fit in a standard wallet – with many people packing wads of currency in handbags, money belts or backpacks.

The owner of a tiny kiosk selling newspapers, cigarettes and snacks in one of Caracas’ nicer neighbourhoods said that each evening he quietly stuffs a plastic bag full of the day’s earnings, about 100,000 bolivars (about $70) in notes of 10, 20, 50 and 100 bolivars.

This is a country with one of the highest crime rates in the world, and carrying that much cash is dangerous. He said he does not feel safe, even though he uses his own scooter rather than public transport.

“All of Caracas is unsafe,” the 42-year-old kiosk owner, who declined to give his name, said.

Three years ago the volume of cash he carried home after a long day of work was smaller, he said, “and so were the risks”.

He said that his clients usually counted out their notes before stepping out onto the street, since they were too scared to be seen holding money in public.

———

and here we see an older venezuelan pensioner going to buy the local news paper from the corner deli.. 🙂

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“So Venezuelans must handle huge volumes of cash – so much that the bills don’t always fit in a standard wallet – with many people packing wads of currency in handbags, money belts or backpacks.”

401

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~ by seeker401 on November 29, 2016.

19 Responses to “Venezuela’s bolivar currency so devalued it no longer fits in wallets”

  1. […] via Venezuela’s bolivar currency so devalued it no longer fits in wallets — Follow The Money […]

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  4. seek,
    I always had a difficult time understand these types of things. Is this ‘the game’? Devalue, but prop up, say the US dollar (as in your other article). This devaluing opens up a market in that devalued region some time in the future. For instance, I thought Russia was under sanctions also. Now they say it is open for business. It is a good outlet with all that ‘bulging’ money (meaning too much currency in Europe devalued, but with an untouched market their goods suddenly become valuable). Hence why wars can make some people very rich. Devaluing is an economic war. Eventually though in a system like this that is highly controlled by corrupt man, only further corruption is the outcome. Man is not omniscient and cannot factor in all the bits of data to be good stewards and rule effectively no matter what sector of society.

    Does this sound about right?

    • i am no expert either but what we are witnessing are currency wars and the main losers are emerging markets and brics..venezuela falls into those categories..with the USD so strong it weakens all the other currencies..every country is different though so i am generalising slightly..

      emerging markets and the possible USD rate hike/hikes are intertwined heavily..

      this is a silent war as such..

      “Eventually though in a system like this that is highly controlled by corrupt man, only further corruption is the outcome.”

      yep!

      AUD was in parity a few years ago but is now back to its normal resting place of .75

      • This currency war keeps any emerging powers in check? Or does the devaluing of the US dollar itself trigger such a currency war I wonder?

        When AUD had parity there was not a ‘strong’ or ‘expanded’ currency war?

        I keep wondering what triggered this current currency war. Was it bad economic decisions?

        • its about keeping the USD as the premier denomination..if you hurt other countries currencies they run to the USD..

          • Yes, you have been very helpful. I have been able to think and put some things together to understand.

            I was wondering if this is always ongoing, or are there times when there is not a ‘currency war’ in which the US dollar is not making itself the premier denomination?

            What made me think there are breaks now and then is because you said the AUD was in parity a few years ago.

            I understand that could not last too long, if there are breaks in currency wars, because other countries currency would grow too strong and the US dollar has to maintain a strength to continue to do this.

  5. I know there are many factors. Maybe that last question “Was it bad economic decisions?” is too big of a question – too complicated that involves too many factors.

    I do not know if those other questions are answerable either. I mainly was wondering what triggered this current currency war. But economists might be always trying to understand those factors before such events happen in order to move in the market to a safe haven.

  6. Reblogged this on World Peace Forum.

  7. Thanks for that article seeker. I think I was getting it when you were explaining it, but the article did help. The USD is tied that directly to other markets. What is interesting is that article says that Mexico and India have made economic reforms that would help them weather a rise in USD value. We know now that India did not weather that rise even though they made economic reforms. I wonder how Mexico faired. If Mexico faired well still it is probably because so many US companies go to Mexico or overseas. Yet Trump is making moves even before he is in office to curb industries from going to Mexico, and how many will return back to the US…

    I was having some trouble understanding the USD was so strictly tied to global markets because the USD seems to always be strong and rising in value. That article pointed out that the USD had periods in the last 20 or so years in which it was not that strong so emerging markets grew strong. Yet recently the USD has been more consistently rising crushing many markets for long periods of time. I did not see the ebb and flow which made it difficult for me to understand, but now I see why I did not see that ebb and flow. It has not been doing that recently so other markets must be tanking (going down) increasingly so.

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