With so much currency floating around and nothing to spend it on, there’s a new way to use all that worthless Venezuelan fiat…
We have been following the Venezuela crisis for some time. Today, we take a look at what happens when there is so much worthless currency mixed with total desperation and nothing to spend it on.
Venezuela is an example of real time economic collapse and hyperinflation. To give a sense of just what is happening to the currency right now, first look at “official” vs “unofficial” exchange rates to the US Dollar.
Officially, it takes around 10 Bolivares to get $1:
Now, if you actually need to get US dollars, well, that’s not the rate you would pay. Unofficially, the price on the street is way higher than most would imagine:
Price on the street is near 16,500 Bolivares to ONE USD. This is the very essence of hyperinflation and the collapse of society.
With so much currency floating around, the Venezuelans, to their craftiness, have done something which reminds us of this picture:
They have invented a new game called “Little Animals”, and it is literally taking the nation by storm. People are gambling their Bolivars away because there is nothing else to do with them, even within the failing socialist nation that can barely feed itself, regardless of an abundance of natural resources.
Here’s some insight in the finals gasps of desperation turned lotto-craze from the Caracas Chronicles:
Here’s how it works. There’s a little board with 38 “little animals” on it. Each animalito has a number. If you pick the right one, you win: the payoff is 30 times your original bet. Put 1,000 bolivars on the little camel and if it shows up, you go home with Bs.30,000. You can bet on as many animals as you want.
Los Animalitos is all the rage. I hear people of all ages talking about it everywhere I go: workers, old ladies, housewives, kids. Even the Mangokistan resistencia guys were talking about it.
A statistician will tell you the house can expect to pocket 21% of the total gambled. For players, the expected return is negative. As with all lotteries, this one is rigged.
A while ago, I noticed that some clothing and electronics stores had started selling food. That makes sense: amid an economic cataclysm, people are spending only on absolute necessities. I thought that was rock-bottom, until we hit a new rock-bottom, that is: now, stores are switching from food to selling animalitos.
There was no line, but there were four people staring at a bulletin board with a bunch of papers pinned on it. Not previous results, but pieces of papers with what seemed to be clues about the next numbers to come up good. The numbers were arranged in a pyramid, on a grid, and appeared hidden in a caricature. It seemed silly to me that a number to win the lottery would be pinned to a board at the same lottery agency that sells you the ticket, but there they were four adults with their eyes fixed on it, looking for clues.
There was a lady looking at the animals and scribbling numbers on a piece of paper. She seemed like an expert at this, so I asked her for guidance.
“Which animalito should I play?”
“Ay mijo, I don’t know, I’ve been losing for months.”
“Really? I’ve never played, so I’m really lost, what are all those numbers?”
“This one and this one turned up this morning” she points at numbers on the board, “so the next one should be in between these right here.”
I asked her what she would play, and she showed me the piece of paper she had. She had already played 13 numbers, and had spent Bs. 8,100 on them.
“Whoa, that’s a lot, what are you going to do with the money If you win?”
“I’ll help my grandchildren, they need me so much. Who knows, maybe God will help me, if the person that’s running this game will…”
The results would be published in half an hour, and she was just looking at the numbers to see if she could figure out some kind of pattern.
The monkey was her favorite.
She sounded really worried, and I just didn’t dare to dig deeper. This game is thriving on people’s desperation.
Here’s what the “lotto” board shows up and here’s the little animals:
La lotería de animalitos (con 38 *números*) es un sorteo de pueblos que volvió a emerger en ciudades. La gente los juega a ver si come. pic.twitter.com/9uWczBXHNR
— Luis Carlos Díaz (@LuisCarlos) July 22, 2017
Now just yesterday Forbes is reporting on Washington’s intent to tighten down the hatches even more with another round of sanctions on the failing nation:
Washington will impose greater sanctions on the embattled government of Venezuela. President Trump has already announced more names to Treasury’s individual sanctions list, including Venezuelan president Nicolas Maduro. But more sanctions are right around the corner, especially if October elections look rigged.
And recall that President Trump even publicly pondered “US military response” in the South American nation:
Venezuela is in a hyperinflation spiraling out of control with a population that can’t feed itself that has now resorted to gambling away the excess Bolivars in hopes to gain a couple pennies for food that is not available in stores, but Washington is going to get tougher on the nation and our president hasn’t ruled out military intervention.
Food for thought…