Mr. Maduro of Venezuela with the new currency.CreditMiraflores Palace
New York Times: Venezuela Cuts to Fight Inflation (Zeroes From Its Currency, That Is)
MEDELLÍN, Colombia — Faced with nearly incomprehensible inflation — 32,714 percent as of Wednesday — Venezuelan officials thought they had a solution: They changed the color of the bank notes and increased their denomination. Then they said they would lop off three zeros. And when that didn’t seem enough, they announced they would cut off two more.
The tactics have left Venezuelans like Yosmar Nowak, the owner of a coffee shop in Caracas, convinced that there is no solution in sight and that the government cannot even bring down the price of a cup of coffee, an eye-watering 2 million bolívars.
“I imagine if we keep like this we’re going to have to do the same thing in December,” said Ms. Nowak, who has been forced to raise prices in her cafe at least 40 times this year.
Slashing zeros from Venezuela’s inflation-cursed currency, the bolívar, is the tent-pole of a set of economic changes by President Nicolás Maduro as he tries to right his country’s capsized economy. The five-digit inflation has earned Venezuela comparisons to the hyperinflation of Zimbabwe and Weimar Germany from the International Monetary Fund.
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WNU Editor: Changing the look of the currency and getting rid of a number of zeroes that are on it is not going to stop inflation. The Russian goverment did the same thing to fight inflation in the early 1990s (I know I was there), and it did nothing to stop the inflation at the time. In fact it made it worse.
My thoughts exactly. As if they don't understand basic economics. Or they play 3d chess and go the psychological route. But then again, much more could be achieved on the route by getting rid of a few people who caused this mess and hold real elections..but no...printing new money and keeping the same people in charge ..what a farce.. anyways I hope those Venezuelans who fled will find a home somewhere (and I don't think the us should take them all - and I'm European. .just don't think they can handle 2.7 million or more who fled already. .and it doesn't solve anything either. .Venezuelans need to stand up to this sh*t regime)
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ReplyDeleteToo bad they don't have toilet paper. The money could be printed on that. It would serve two purposes though only in order. First as a currency then it's real value would be reflected in the second use.