Venezuela's shortage... on cash

There are many things Venezuela is known for: corruption, beautiful beaches, the highest inflation of the planet after Zimbabwe and insufficient food and medicine supply.

But I've decided to talk about the shortage of cash, and I don't mean as a figure of speech. Currently Venezuelans take part in long queues outside banks to get cash, the ones that don't want to do this have to go through cash sellers, generally for a 10-15% fee they get cash without any waiting. The government prefers to blame them of the shortage of cash and started persecuting them, however, the reality is that there isn't enough cash.

Pictured: 4200Bsf equivalent to $0,36 at official exchange rate, or $0,16 at the black market rate

One of the reasons for the inflation in Venezuela is constant cash printing, which devalued the currency pretty fast. Not only it is printing lots of money to cover fiscal deficit, but a good part of it is imported, as the government finds itself short in cash it has decided to issue currency that isn't "backed" by physical bills, so the result is a shortage of cash.

In Venezuela a lot of established business lack a P.O.S, and the ones that have them have to deal with an overload system ever so often, beside this there's the more informal market, like the one for buying food (there are super markets, however, due to the price of things people prefer to go to open area markets to buy their food and be able to save some money), so you end up with a lot of money transactions that are only possible to be done through cash.

The individual value of bills is so low you generally need to be packing a lot of them to buy anything. For this reason some sellers have started using scales to weight the money instead of directly counting, as it saves a lot of time given the amount of money that's used for any sale. Too much cash yet not enough, and this trend will continue until the necessary policy changes are done for the economy, which I'm not expecting anytime soon given these kind of news I don't think it'll happen any time soon.