madness or sanity ..... Maduro announced reduction of five zeros to the Venezuelan currency

Nicolás Maduro, president of the Republic, announced on Wednesday that the new monetary cone was put into effect. The measure will become effective as of August 20, initially scheduled for June 4.

"The monetary economic reconversion based on the examination of economic prosperity will start on August 20, definitively with the circulation and issuance of the new sovereign bolivar of the new monetary cone, a reduction of five zeros will be made with this new monetary cone" Maduro said during a live broadcast.

The president indicated that the new cone will be anchored to the "petro". In addition, he explained that five zeros will be removed from the national currency.

"The new monetary cone is going to have a new way of anchoring the petro to stabilize and change the monetary and financial life in a radical way," he added.

The measure will enter into force on August 20, when the "new sovereign bolivar" will be issued, the president explained in a video released Thursday. In it, he defended the measure as a method to "stabilize the monetary and financial life of the country."

On Monday it was known that inflation in Venezuela will reach 1,000,000% by the end of this year, as revealed by the latest projections of the International Monetary Fund (IMF). So serious is the situation of the Latin American country, that the entity compared it with what Germany experienced in 1923, during its period of hyperinflation after the First World War.

"I do not think that [the measures] are appropriate," said Hugo Faría, professor of economics at the University of Miami (United States), in "Realidades en Contexto" by CNN en Español. "If [Maduro] really wants Venezuelans, why does not he circulate hard coins in the country?" Asked the expert, who gave the example of the situation in Peru, in which the local currency coexists with the currencies of other countries and thus the central bank "does not emit too much currency," he said.

"It is not credible what he is doing," he criticized, and predicted that inflation will continue to rise. He said the decision was "cosmetic" and that "it does not point to the central problem" that the country suffers.

Maduro's decision is not new: Venezuela already took it in 2008 and other countries have done it before. In fact, in the last 100 years nations have eliminated zeros from their currencies in a total of 80 occasions, according to a 2016 report from the Center in Economics and Finance of the Icesi University (Cienfi).

Most countries that have eliminated zeros in their currency belong to Europe (36%), followed by Asia (21%), America (26%, mainly South America) and the rest are African countries, according to the mentioned report.

Argentina Argentina has removed zeros to its currency four times in its history: the first was in 1970, when it removed two zeros. Then in 1985 he removed four zeros and, in 1985, three zeros. The next (and last) was during the important crisis of the early 90's. In 1992 they removed 4 zeros, according to a report from the Chamber of Commerce and Services of Argentina.

Mexico
The North American country took this measure in December 1993 and eliminated three zeroes of the Mexican peso, according to the aforementioned Cienfi report. The measure turned 25 years this 2018.
Brazil
Brazil has eliminated zeros from its currency five times: the first in 1967, when it removed three zeros, and the last in 1993, when it removed three more, according to Cienfi data.

Chile
Two have been the occasions in which the South American country has eliminated zeros of its currency: the first in 1960, which removed three zeros, and the second (and last) in 1975, when it eliminated three others, Cienfi explained.

Bolivia
Bolivia has also taken this decision twice: in 1963 it eliminated three zeros, and then, in 1987, it removed seven zeros, according to the Cienfi list.

Uruguay
In 1975 it was the first time that Uruguay made this decision and eliminated three zeros. Again he carried out this measure: in 1993 he removed three zeros, said Cienfi.

Peru
Peru is another of the countries that have taken this measure: it has done it twice: in 1985, when it removed three zeros, and in 1991, when it eliminated six, according to this same report.

MIRA: Hyperinflation "swallows" the money of Venezuelans

Colombia
Colombia, a country that shares a border with Venezuela, has not eliminated zeros from its currency in its history, but at present Congress is debating this measure and deleting three zeros, at the proposal of the Government itself.

Germany
After the First World War, Germany was the first country in the world to restructure its currency: in 1923 it eliminated 12 zeros (record to date, only matched by Zimbabwe in 2005, according to Cienfi). Then he did it once more, also at the end of the war (in this case, the IIGM): in 1948 he removed a zero to his currency.

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