With Venezuela announcing they are taking three zero’s off of their currency denominations amidst the hyperinflation, here’s a collapse update…
So this is what Mexico did during the “Tequila Crisis” when they took of three zeros from the denomination of the currency. It was called the New Mexican Peso. On January 1st, 1994, $1,000 pesos became $1 peso.
I talk to people from Mexico to ask what it was like, and it most people say they weren’t affected.
That is what happens when you have absolutely zero savings. It doesn’t matter. One day you’re buying lunch for $30,000 pesos, and the next day it costs $30.
Well Venezuela just announced that they are essentially resorting to the same tactic, though ironically, it’s going not to be called the New Bolivar, nope, it’s going to be called the Strong Bolivar. Think of it like the names of our laws here in the United States: It will actually be the exact opposite of what it’s called.
So the “Strong Bolivar” will actually be a weak Bolivar much like the “Affordable Care Act” is the Unaffordable Care Act.
Here’s more on the upcoming re-valuation of the Venezuelan Bolivar from Reuters:
The measure to divide the so-called bolivar fuerte – or “strong bolivar” – currency by 1,000 would take effect from June 4, the socialist leader said. It would not have any impact on the bolivar’s value.
The move illustrates the collapse of the bolivar, which has fallen 99.99 percent against the U.S. dollar on the black market since Maduro came to power in April 2013. A $100 purchase of bolivars then would now be worth just a single U.S. cent.
But Maduro, 55, presented the move as a positive development intended to protect Venezuela against currency speculators and a U.S.-led “economic war” against the OPEC member.
Critics said the currency measure was no panacea for Venezuela’s economic mess and just a psychological ploy to make Venezuelans forget the extent of the hyperinflation.
While the move sounds like a currency revaluation, economists consider it a currency re-denomination as the country is not changing the value of its official exchange rate.
Venezuelans will not need to turn in the currency now in their wallets but all new currency printed or minted will be in the new denominations.
Although we’ve caught wind of El Petro, Venezuela’s supposed oil-backed cryptocurrency, here’s more recent and immediate changes, from the same Reuters article, showing Maduro holding up what will be the new $100 Bolivar note just this week:
On a side note, my wife brought to my attention some of the things that are being done to survive in Venezuela.
Particularly, women, the lucky ones anyway, have been selling their hair in Columbia and buying food with it.
Here’s a little coverage of this:
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.