Hyperinflation in Venezuela

Most of us dream of having piles of money, for people in Venezuela this dream has become and insane nightmare.

Under the communist government of Maduro, Venezuela has been "printing its way to prosperity." This has not been working out so well...

The largest bill Venezuela currently has printed is a 100 bolivar note. This is currently worth about $0.02. Two Cents US.

That means that if you want to buy cheese in the country, the weight of the bills, and the weight of the cheese are about equal. Which is insane.

Now Venezuela is "outlawing" the 100 bolivar note. This move is a bit of a head scratcher. The country says that it is outlawing the bills because political enemies have stock-piled bills in Europe, Iraq, and Columbia. Even after watching the video clip of the government official explain it; this makes no sense. I know India made a move recently to demonetize bills. I know this has been done before in place like Burma. And I would like to be able to offer some sort of coherent explanation for the behavior, but there is not really any. Holding cash in a hyper-inflating economy is just plain silly. The official explanations make no sense.

What is really going on here?

Well one might argue this is trying to make commerce difficult...

One might argue this is trying to leave drug dealers holding the bag...

One might argue this is to hurt currency traders, something that Maduro hates. He says his currency should be worth 10 to the US dollar not 3,000 to 4,500 as it has bee trading in the past week.

A few months ago there were even questions and whether the foreign businesses that were printing up all the money were even getting paid.

Now I have zero proof the following idea, but I almost wonder if the companies printing up all the cash, didn't demand to get paid; then threaten to just ship the extra containers of cash to columbia where it would be sold on the open market. If you won't pay your bills we will just sell your cash... This idea is likely completely silly, but might hold more water than the official reason. That is to say, there is almost a microscopic drop of plausibility.

So how do you actually make sense of what is going on....

Well this money move takes the heat off of Maduro. There has been some talk of impeachment.

The country has been on its last leg for a long time. Store shelves are empty. There are long lines everywhere. People are hungry.

This is a way he can blame all the problems on political enemies.

It is the drama of the week.

He could simple close all the banks next week.

He is suppose to reissue bigger notes, and coins. The said 500 and 20,000 notes are needed, but there are serious questions on whether they have been printed and are ready for distribution yet.

Venezuela has been a text book example of how not to run and economy and or country; although I have to give some credit; politically he has managed to keep people wrapped around his finger for a long time.

Communists don't like capitalism... This is getting very serious! Apparently, he is taking the country the direction of Cambodia.

Understanding Cambodia history, is not easy. It is heartbreaking. After the Vietnam war, North Vietnam invaded South Vietnam, and then Laos, and Cambodia all fell to communist governments. At this time things were bad, and got worse. Ultimately, in the next 5 years Pol Pot and the Khmer Rouge killed 2-3 million people, about 1/3 of the population. They were communists.

I have been to Cambodia, walked on the killing fields, seen the skulls piled up, been through S21, it is not one of those happy tourism experiences. Even then I could not understand how did this happen? Yes, you can watch the movie "The Killing Fields" and you can read entries on wikapedia, but it still doesn't make sense. Why?

Ultimately, I had to read several other books. "First They Killed My Father" and "Year Zero" in order to begin to get my head around the insanity of communist thinking. They take your through it first hand... day by day.

True communists believe in destroying all money. Money was discarded out onto the streets. If you picked it up they shot you. Their idea of a sharing communist agrarian society did not involve free markets, money, or political enemies. If you were upper class, meaning you could read or wore glasses, they killed you. People thought if they kept their head down things would improve, yet they did not. Eventually, everyone was so weak, due to lack of food and disease, they couldn't resist. They died. That is how you lose 1/3 of the population.

Maduro's war on cash is silly. It make no sense. Unless you think cash and commerce is bad. Then suddenly, it make sense. We need to "deploy" "citizens" out to the "country" to "work" on "government farms." There is talk of this. It is what happened in Cambodia. It is slavery. Resist? I know how that worked out for Cambodians...

Due to Cambodia's unique geography it had never faced a widespread famine. The Mekong river, come down from China, so even if it didn't rain in Cambodia, there was water and no known widespread famine in all of Cambodia's (known) history. Yet, communists caused a famine.

Venezuela is a rich country, yet it has fallen a long way. It is crazy to see what is happening, and one hopes that cooler heads prevail. Communism is not some cool government style, it doesn't work and it kills people. Hyperinflation, a war on cash, a war on prosperity, ability of people to work, a war on capitalism. This stuff has serious consequences! It is not fun and games anymore, things are getting really bad in Venezuela, and if people don't do something while they can, they may not always have that option.

So why did Maduro get rid of the 100 bolivar note? It could be because he is a good comrade communist who believes in communism.

Then suddenly it begins to make sense....