The dramatic effects of hyperinflation…
Venezuela is on the verge of an economic collapse as the value of their currency, the bolivar, continues to fall at an alarming rate.
In a stark tweet last week, Bloomberg journalist Nathan Crooks pointed out the reality of the inflation facing the South American country: “On Monday, Venezuela’s biggest bill bought you four pennies. Today it will only buy three. The bolivar has lost 1/4th of its value in 4 days.”
The recent fall off in the value of the currency means that shop owners in the country have taken to weighing the notes rather than counting them out individually.
People are carrying around backpacks full of currency as standard wallets and purses are useless for transporting the huge quantity of notes necessary to make the smallest of purchases.
The Venezuelan economy has been in decline since 2014 with the drop of global oil prices. The decision by President Nicolás Maduro to fix the exchange rate and print more cash has added only added to the problem of the devaluing currency.
Venezuela is facing into a December of hyperinflation and ultimately an economic collapse .
“When they start weighing cash, it’s a sign of runaway inflation,” Jesus Casique, financial director of Capital Market Finance, a consulting firm told Bloomberg. “But Venezuelans don’t know just how bad it is because the government refuses to publish figures.”
Venezuela will soon be paying workers by the lb as the public frantically changes their, now dramatically devalued, savings to dollars which further adds to the depreciation of the currency.
Additional notes of 500, 1,000, 5,000, 10,000, and 20,000 bolivars are being brought into circulation over the coming weeks to allow purchases in a scene eerily similar to the hyperinflation of the Weimar Republic in 1921 to 1924.
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