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JohnGalt posted:I'm no economist, but at some point does it matter how devalued the Bolivar is? Imports are all brought in on dollars and there is a stream of hard currency from oil exports. At some point, is it just de facto USD? This is correct. If the Bolivar fails in its use as a medium of exchange then another medium of exchange will take its place. We see this in the country most similar to Venezuela: Zimbabwe, US dollars have become money instead of Zimbabwean dollars. In the demonetization crisis in the US during the time immediately following the Revolutionary War British Pounds and Spanish Dollars became the the primary media of exchange instead of the worthless Continental Dollars. And in France during the Reign of Terror people started transacting primarily in gold instead of the worthless currency printed by whichever government was in at the time. The only real time where a demonetization happened and another medium of exchange didn't replace the old money was during the German demonetization, as there wasn't enough gold or foreign money in peoples' hands to allow for it. Money is money because people use it as the primary medium of exchange, not because the government declares it so. Venezuela isn't quite at a full on demonetization but it's probably going to go there soon, hopefully enough people in the country will have access to US dollars when that happens. Also this is semantics but fiat currencies don't devalue, they depreciate.
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Nov 18, 2017 17:51
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Are there any plans to print bigger banknotes? Wikipedia says the highest denomination note is 100,000 bolivars (which will be worth about a dollar on Monday). That's a far cry from the Zimbabwean and German 100 trillion notes. It will be a shame if they throw in the towel so early. The note designs are far nicer than the Zimbabwean ones.
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Nov 18, 2017 19:50
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Pantsbird posted:Are there any plans to print bigger banknotes? For a very long time the government didn't want to even consider printing larger notes because they thought that would be equivalent to admitting that the country had an inflation problem. The Venezuelan Central Bank has not published any kind of statistic (inflation or otherwise) since the start of 2016. The regime's official economic policy is to ignore the problem and hope that it goes away somehow. This is one of the reasons why the introduction of the 100,000 bill was so surprising. A National Assembly deputy who happens to also be an economist (Jose Guerra) said around the time of the release of the 100,000 bill that we'd have to start printing 500,000 bills by the early part of next year to keep up with inflation, so you might get your wish!
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Nov 18, 2017 21:16
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Didn’t they already re-scale the bolivar by 1000:1 back in Chavez time? So technically they’re already at 100 million bolivar notes. They might just do the same thing again when they get to 1,000,000 — just call it 1 Revolutionary Bolivar and then you don’t have the big scary numbers. IMO this is the most likely thing, I wouldn’t get excited about seeing 1 billion Bolivar notes anytime soon.
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Nov 18, 2017 22:06
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Saladman posted:Didn’t they already re-scale the bolivar by 1000:1 back in Chavez time? Yes. And I think the rest of your post is right, down to even the loving name because you know they'll call it something like that
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Nov 18, 2017 22:35
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They called it 'bolívar fuerte' (strong bolivar). So yes it's named after Chavez. Original bollivar was 3VEB / USD in 1937. Revalued to 1600VEB / USD in 1983, Then revalued to 1/1000th as the Bs.F in 2007. Marks and ZWD were revalued 4 or 5 times. If I understand right, the various Marks lost over 12 decimal places of value, and ZWD/ZWN/ZWR/ZWL lost 25 decimal places. By that standard the bolivar is still very strong. 
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Nov 18, 2017 22:52
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If I remember right the mark was allowed to inflate to the point where they could quickly burn through reparations payments and then put at a set mark : pound sterling ratio (think it was 4:1? something like that).
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Nov 19, 2017 01:21
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DoctorStrangelove posted:Also this is semantics but fiat currencies don't devalue, they depreciate. I think the distinction is whether a currency is floating or not, rather than if it's backed by goods or not. If the Venezuelan government is dictating the value of the currency they could choose to devalue it. On the other hand a currency floating in the free market (like dollars, yen or euros) can depreciate in response to market forces.
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Nov 19, 2017 04:39
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In this case, it is both since it can be both devalued by the government and depreciated on the black market. Granted, there is the open question why still have a peg of near worthless currency. But yeah, the Bolivar, in either case, doesn't have a future. As far as the state itself goes, the question is going to how long can they swap assets for a line of credit from their chief benefactors. They very well may be able to arguably limp along a few more years, but essentially liquidate any value remaining in the country to do it. Even if the PSUV is overthrown, I have a hard time not seeing Venezuela locked out of credit markets until it satisfies its creditors and dollarization can only help so much when the state is running on empty. (Also, creditors could easily go after PDSVA assets in the US.) Ardennes fucked around with this message at 15:19 on Nov 19, 2017 |
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Nov 19, 2017 15:13
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Ardennes posted:In this case, it is both since it can be both devalued by the government and depreciated on the black market. Granted, there is the open question why still have a peg of near worthless currency. But yeah, the Bolivar, in either case, doesn't have a future. If I presume the PSUV is dumber than I then my first inclination is that they keep it due to stupidity and posturing. If I don't, then they get to hoard the real money that appreciates in value relative to a worthless currency, like IRL funnybucks in apps or something. The reality is likely a healthy mix of both. In any case, even if the government decided the Bolivar does not have a future tomorrow then they'd never use dollars. They'd stick it to the man and make Rubles or Yen or something like that the main currency of the nation.
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Nov 19, 2017 15:21
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Furia posted:If I presume the PSUV is dumber than I then my first inclination is that they keep it due to stupidity and posturing. If I don't, then they get to hoard the real money that appreciates in value relative to a worthless currency, like IRL funnybucks in apps or something. The reality is likely a healthy mix of both. It is difficult to say without simply more sources, I do think there has been a clear willingness to simply pay for expenses through printing and I assume they thought a peg and currency controls would be enough to stop it (obviously not). The state is still sitting on reserves, but they are pretty much at emergency levels at this point. They might think about using the Yuan, but in the end, I assume the public itself will use any hard currency they can get their hands on. Btw, both Russia and China have come out and still say they absolutely support the government, and Russia has allowed Venezuela to pay only reduced payments (but I don't think the principal has been touched). I assume both powers are letting the situation play out without the expectation the government will eventually fall, and the next government will be so incredibly weak they can still make the same demands on it. One reason vulture funds exist is that they know they can buy bonds for pennies on the dollar and then simply wait until the government is desperate to re-enter international credit markets. Ardennes fucked around with this message at 15:38 on Nov 19, 2017 |
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Nov 19, 2017 15:33
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My contacts on the Amazonas-Vichada frontier allege that yuan are kosher currency down there now. Hard to know how true that is, I have no plans to go back. FWIW we were advised to not bring dollars last time because of Trump, so most of our serious transactions were in euros.
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Nov 19, 2017 22:31
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Vlex posted:My contacts on the Amazonas-Vichada frontier allege that yuan are kosher currency down there now. Hard to know how true that is, I have no plans to go back. FWIW we were advised to not bring dollars last time because of Trump, so most of our serious transactions were in euros. That's interesting. I haven't heard of anyone accepting Yuan here in Caracas, but if you're making a large purchase most stores are all too happy to take Dollars or Euros off your hands, so it wouldn't surprise me if those were kosher as well. At any point, there's nowhere near enough foreign currency circulating here for it to replace the Bolivar. Most people who want (and can afford) to make large purchases have access to foreign bank accounts, so they just wire the money instead of using bills.
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Nov 19, 2017 23:03
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I remember when D&D used to be lousy with unironic Chavez fanboys. Are there any of them left here?
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Nov 20, 2017 19:54
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sean10mm posted:I remember when D&D used to be lousy with unironic Chavez fanboys. Are there any of them left here? we've got a couple even the most dedicated aren't spending too much time in this thread these days though
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Nov 20, 2017 19:57
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GreyjoyBastard posted:we've got a couple The closest I've seen this week is the tankie idiot in the North Korea thread implying legitimacy w/r/t the last round of Venezuelan elections.
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Nov 20, 2017 20:21
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The official non-tankie defense of Maduro is just the version we saw in Jacobin a few months ago in which he's considered a failure who's thrown away the good work of Chavez but the opposition is painted as a bunch of violent reactionaries who would be even worse. Pretending PSUV continues to have more popular support than they actually do is definitely a part of it too though.
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Nov 20, 2017 20:28
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Also all the outward facing propaganda definitely plays a role in all that
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Nov 20, 2017 20:57
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Sinteres posted:The official non-tankie defense of Maduro is just the version we saw in Jacobin a few months ago in which he's considered a failure who's thrown away the good work of Chavez but the opposition is painted as a bunch of violent reactionaries who would be even worse. Pretending PSUV continues to have more popular support than they actually do is definitely a part of it too though. What's really funny is that some internet lefties started calling Jacobin a CIA front after that piece was published.
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Nov 20, 2017 22:56
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sean10mm posted:I remember when D&D used to be lousy with unironic Chavez fanboys. Are there any of them left here? The most annoying one can't post in this thread without being banned.
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Nov 21, 2017 01:13
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Attorney general Tarek William Saab announced yesterday that Venezuelan authorities had arrested six top-ranking Citgo officials in the country, including the company's president. Saab said that the arrests are related to a corruption investigation. The details aren't entirely clear to me, but Saab suggested that the arrests may be in connection to a June 15 meeting this year in which Citgo signed a $4 billion debt restructuring agreement with some foreign investors. Saab said that the deal had "unfairly" indebted Venezuela and that it had been motivated by "corruption". The Wall Street Journal is reporting today that four out of the six detained individuals are U.S. citizens. There arrests are almost certainly not related to any kind of legitimate police investigation. Instead, the arrests are probably motivated by squabbles within the Maduro regime for control over territory. We also found out yesterday that the regime is taking over Makro, which is a chain of wholesale stores similar to Costco, if I remember correctly. Anyway, the regime said Makro was engaging in all kinds of illegal practices including "hoarding, usury, speculation and boycotting". Of course, there isn't any kind of due process at play here, so the stores are now under regime control. The takeover of Makro is par for the course for Maduro, who has in previous years ordered the "intervention" [read: takeover] of private businesses around Christmas times so that he can gut them and give away things/sell them for cheap to try to keep people happy. Four years ago he ordered the takeover of the Daka home electronics chain right around the same time. Last year, also around this time, the regime "decommissioned" [read: stole] four million toys from the country's largest toy distributor and then sold them to people at discounted prices.
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Nov 22, 2017 16:42
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Does Daka still exist? What ever happened to all the bakeries that the government confiscated and then shut down? Also hard to feel sorry for those Citgo guys. It’s like finding out an arms dealer was illegally arrested by the Syrian government while selling them barrel bombs. Like even if the detention is illegally mandated, gently caress you. I will Grant there is a very slim chance the Citgo leaders arrested are not corrupt assholes, but it’s slim.
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Nov 22, 2017 19:13
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Wether they are either assholes, guilty, or both is irrelevant to the fact that they are not receiving due process under the rule of law. Guilt is stablished in court, not a priori. More importantly I have a hard time believing America's gonna be chill with American citizens being detained without due process.
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Nov 22, 2017 23:37
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Oh yeah, US is not gonna be happy, especially regarding the state of the prisons and legal system in venezuela itself making getting arrested a crime against humanity.
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Nov 23, 2017 02:12
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Pharohman777 posted:Oh yeah, US is not gonna be happy, especially regarding the state of the prisons and legal system in venezuela itself making getting arrested a crime against humanity. Given they are US citizens are they either going to get wrecked extra hard or get preferential treatment since the expectations is they can pay big time to be kept safe in the meantime?
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Nov 23, 2017 02:28
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Citgo got a new president yesterday to replace the one who was arrested two days ago. The new president of Citgo is Asdrubal Chavez, who just happens to be Hugo Chavez's cousin.Furia posted:More importantly I have a hard time believing America's gonna be chill with American citizens being detained without due process. It may be the case that because these individuals are oil executives they may have a better chance of making it out of Venezuela, but Trump is such a monumental imbecile that I'd be extremely surprised if these people saw daylight any time soon. There's at least one other U.S. citizen in a Venezuelan prison today who is there on fake charges. His name is Joshua Holt and he's been in prison for about a year and a half now. He traveled to Venezuela last year to marry his fiance. The story goes that police officers were going door-to-door in his apartment building, breaking into people's homes presumably to extort them for money. When they got to Holt and his wife's apartment, they started tearing up the place and noticed that Holt was recording them on his cell phone. They detained him and once they figured out he was a U.S. citizen, the police demanded $10,000 from his family for his release. Once it became clear to the police that they weren't getting their money, they "found" an AK-47, ammunition, a grenade and some maps in his home. pentyne posted:Given they are US citizens are they either going to get wrecked extra hard or get preferential treatment since the expectations is they can pay big time to be kept safe in the meantime? If you look up his name you'll find lots of articles about him. As of June he was doing very poorly. He's lost a lot of weight and he's not getting any kind of medical treatment, and I understand that he has some conditions that require care. Anyway, to answer your question, I think he's just wasting away like any other Venezuelan prisoner would. Saladman posted:Does Daka still exist? What ever happened to all the bakeries that the government confiscated and then shut down? Yes, Daka survived the intervention. I believe you're referring to the couple that were taken over by the government in March during the Bread War. I know for a fact that one of them was closed after being stripped empty by regime officials, and I would be extremely surprised if the other one did not meet the same fate. The regime never had any intention of running those bakeries.
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Nov 23, 2017 16:38
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Maduro's creating a new cryptocurrency for Venezuela.  http://www.elmundo.es/internacional/2017/12/03/5a24553922601d8a298b461b.html
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Dec 4, 2017 00:10
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 He unironically wants to call it the 'Petro' dollar. The hyperinflation will really take off without the limitation of physically printing notes. Forget big banknotes; Venezuela will get the record for most decimal places on the value of a cryptocurrency. 
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Dec 4, 2017 00:32
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Came here to post about it. I note that in addition to Venezuela's oil reserves, it'll also be backed by their gold and diamond reserves.
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Dec 4, 2017 04:29
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I don't think I have to tell you guys that this is clearly some criminal scheme. The real currency of Venezuela, which is too backed by Venezuela's oil, gold and diamond reserves, has collapsed and lost 96% of it's value this year alone, almost entirely due to mismanagement and corruption.
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Dec 4, 2017 09:26
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 It's going hyperbolic; This is hyperinflation territory. You're going to have to switch to a stable currency at some point. USD seems politically unrealistic, but is the most readily available. The "Petro" is just desperation.
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Dec 4, 2017 09:45
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It's usually said half joking half serious but everything really is possible
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Dec 4, 2017 10:23
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The whole Petro thing is getting a lot of traction in the news because crypto people tend to get excited whenever someone mentions anything about them. However, it's important to remember the Venezuelan government has a long track record of making poo poo up. My bet is they're just going to award a juicy contract to someone in their inner circle, who'll subcontract the whole development to someone else for pennies and then if it ever launches, people will forget all about it in 5 minutes.
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Dec 4, 2017 14:53
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much like bitcoin this is a crude way to get foreign currency in before the country collapses
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Dec 4, 2017 15:01
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so venezuelans are going into neighboring colombia to buy things and return home, but at some point whoever's selling the goods have got to realize their money isn't worth anything now is whatever little black market merchant on the boarder just not aware of the exchange rate??
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Dec 4, 2017 15:09
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wasn't it a thing that cryptocurrency was big in NK? Maybe they're trying to pull something like that?
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Dec 4, 2017 15:10
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Magius1337est posted:so venezuelans are going into neighboring colombia to buy things and return home, but at some point whoever's selling the goods have got to realize their money isn't worth anything now I'm not sure if you know this but the only place that takes bolivares is Cucuta and they have a floating exchange rate with pesos, that is pretty much decided on the day. That's what the DolarToday site is all about, it reports the exchange rate as it is daily on Cucuta. They're not losing any money at all, they may eventually stop accepting bolivares altogether but the reason why this exchange has stayed up for so long is clearly because someone's benefiting from it.
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Dec 4, 2017 15:26
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fnox posted:I'm not sure if you know this but the only place that takes bolivares is Cucuta and they have a floating exchange rate with pesos, that is pretty much decided on the day. That's what the DolarToday site is all about, it reports the exchange rate as it is daily on Cucuta. They're not losing any money at all, they may eventually stop accepting bolivares altogether but the reason why this exchange has stayed up for so long is clearly because someone's benefiting from it. i have no idea what you would buy with a currency that is inflating that much in value so quickly since it's going to end up worthless as soon as you buy it, and it's not like the venezuelan government has anything to offer at this point its basically a collection of worthless paper at this point
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Dec 4, 2017 15:47
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Magius1337est posted:i have no idea what you would buy with a currency that is inflating that much in value so quickly since it's going to end up worthless as soon as you buy it, and it's not like the venezuelan government has anything to offer at this point You trade until noon, then you take the bolivares you just made across the border and buy anything that is available for sale, bring it back, pay basically nothing on tax and then a little extra for bribes, sell it back on the Colombian side the next day. You're making a killing because you're setting the price of the bolivar, so you can trade on an ever climbing exchange rate before prices for goods have time to adjust. Venezuela is not completely barren of consumer goods, it's just that the prices are dollarized and are therefore completely beyond the purchasing power of any Venezuelan earning in bolivares.
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Dec 4, 2017 16:09
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There is virtually no chance that the government will successfully develop and implement its own cryptocurrency. What we heard from Maduro yesterday is the same thing that we always hear from Maduro: a pie-in-the-sky magic solution to all of the country's problems. The Petro announcement is no different than the dozens of times in the past that Maduro has announced some measure or another and sold it as something that (for sure this time!) will work properly. A quick reminder of how astronomically incompetent the government is in general, but specifically when it comes to economic policy. On December 11 of last year, Maduro announced in a speech that the Bs. 100 bill--the most commonly-used in the country--would become obsolete in 72 hours. At the time, Maduro claimed that the measure was necessary in order to eliminate corruption and currency devaluation. The announcement set off a wave of panic throughout the country. Desperate people flocked to banks in order to trade their Bs. 100 bills in before they became worthless. Desperation boiled over into chaos as looting gripped Maracaibo and other cities across the country. In Ciudad Bolivar, at least five people were killed as the looting went on for days. Maduro's 72-hour ultimatum came and went. The bills were still in circulation. By May of this year, the government had announced that [uel=http://www.el-nacional.com/noticias/economia/gobierno-prorrogo-vigencia-billetes-100-por-septima-vez_183277]the Bs. 100 bill would go out of circulation seven different times, pushing back the date each time[/url]. On November 21, the government announced for the 10th time that the Bs. 100 bill would go out of circulation, this time on January 10. I'm not saying that removing a bill from circulation is an easy thing for a government to do, but it seems to me that it's a lot easier than creating and implementing a cryptocurrency at a national level.
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Dec 4, 2017 17:37
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