Report From Venezuela: An Inside Look At A Country In Free Fall

[Artemis3]

Disclaimer: The author from the quoted article, is co-founder of the altcoin Reserve (RSV) (another USD pegged coin). That said i think its worth reading, as few articles correctly explain the Venezuelan's situation in English. I just stumbled on it while reading about their interest in introducing their coin to Venezuela.

Report From Venezuela: An Inside Look At A Country In Free Fall

Miguel Morel - Nicolás Maduro in Bolívars. Artwork by Cryptograffiti.

Venezuela is in a downward spiral. The Americans are involved. The Cubans are involved. The Russians are involved. Other countries you’ve probably never heard of are involved. The epistemic environment is poisoned by divergent geopolitical interests. Affairs in Venezuela are thus opaque.

American discourse on this issue unsurprisingly contextualizes the crisis in terms most relevant to domestic political battles, namely point-scoring in the tiresome capitalism vs. socialism ideological war. This is probably the least helpful framing for understanding what actually went wrong. And something has gone deeply wrong.

The only thing more interesting than analyzing a failed state from the comfort of one’s armchair is seeing it in person, so I packed my bags and bought a plane ticket to Latin America. The embassy wouldn’t give me a travel visa to Venezuela itself because I’m American, but many Venezuelans have fled to Colombia and Argentina. Everyone there has front row seats to the crisis, so I headed to Bogotá, the capital of Colombia. Conrad Weiss, a Palladium correspondent from Europe, didn’t even need a visa. He flew directly to Caracas.

...

Venezuelan grocery stores and petrol stations are drained wholesale within hours of new shipments. The government chooses to highly subsidize certain goods such as food and oil, which is the reason this dynamic exists. Goods owned by the state are for everyone, according to Chavismo, and when your country is in a downward spiral, the entrepreneurial thing to do is take as much of the free food and oil as you can, throw it in the back of a truck, and transport it to the border.

...

I said previously that the only feasible way for regular Venezuelans to leave the country is through the Cúcuta border. But there is another way, at least for mafiosos doing a lot of business. No vehicles are allowed to cross from Venezuela to Colombia, so the only way to move large amounts of supplies is through the jungle. The military has cut some ad-hoc pathways, but there’s a price. Smugglers have to give up 10–15% of their goods to the soldiers in exchange for their assistance.

Refugees don’t get the same deal from the Cúcuta border guards, probably because they’re not repeat customers.

...

In an effort to hold as few Bolívars as possible, citizens have resorted to trading with their compatriots with American or Colombian bank accounts via Facebook messenger, Instagram, or Whatsapp.

...

Taken together, one gets the impression of a militarily organized Venezuelan state with the capacity to mobilize large segments of the population. Maybe they can—but here’s the punchline: the Venezuelan Army itself only has 71,000 personnel.

...

No one really uses straight cash at this point. Instead, they prefer bank wires. To acquire cash, you have to pay a premium because there’s basically no physical paper left to print Bolívars. The physical paper shortage also applies to toilet paper. There isn’t much of it around. If you have some at your hotel, you may have to bring it with you. Food is also scarce, a subject which has been somewhat controversial. Nevertheless, Venezuelans are losing an average of 24 pounds a year. Currently, the reality is that if you’re not so well-off, you’re in trouble, though if you’re wealthy, you can find food in places normal people can’t afford.

...

Venezuela poured money into social programs designed to shore up political support. Even strategically useful ones, such as education, set up young Venezuelans to enter an economy in which non-oil exports had collapsed and the currency was moving from overvaluation into hyperinflation. Most importantly, the ongoing and entrenched problem of corruption undermined these ventures at every side. None of these problems were entirely original to the governments of Chavez and Maduro, but all were exacerbated by them.

I read the entire article and its very accurate. Americans are supposed to get a visa to enter now, which of course can't be obtained from within the USA anymore (it might be possible to obtain one from one of the Maduro's friendly countries, such as Bolivia).

Bogota is actually very pretty, ordered and clean compared to current Caracas. 30, maybe even 40 years ago Caracas looked as clean as Bogota, but not anymore (and just taking the pictures can be quite dangerous with the rampant crime).

His article is quite correct. Thankfully they sent another colleague to confirm certain details, and the testimonies from the people fleeing the destroyed economy are also accurate. Corruption and crime are the main results of the current regime. There was corruption before, but not as much crime.

He explains how merchants are starting to accept any money, informally (probably illegally, but that's the norm here). Just today i saw an imported product with a sign: $20 (as in USD). A few days ago i asked the price of a repaired chair and the shop owner told me $30, he didn't even bothered mentioning bolivares at all.

Petro was a waste of money to anyone who invested in it, it doesn't work like a crypto at all and nobody wants them. Obviously Maduro isn't going to join Swift right when Visa and Mastercard are leaving. But in the end the Russians didn't want Petros but actual gold as payment... Petro is backed in a promise made by a "government" nobody believes in, no matter how "friendly" a foreign power might look...

[1715266064]

1715266064

[Spendulus]

....
...

In an effort to hold as few Bolívars as possible, citizens have resorted to trading with their compatriots with American or Colombian bank accounts via Facebook messenger, Instagram, or Whatsapp.

....
I read the entire article and its very accurate. Americans are supposed to get a visa to enter now, which of course can't be obtained from within the USA anymore (it might be possible to obtain one from one of the Maduro's friendly countries, such as Bolivia).
....

He explains how merchants are starting to accept any money, informally (probably illegally, but that's the norm here). Just today i saw an imported product with a sign: $20 (as in USD). A few days ago i asked the price of a repaired chair and the shop owner told me $30, he didn't even bothered mentioning bolivares at all.

Petro was a waste of money to anyone who invested in it, it doesn't work like a crypto at all and nobody wants them. Obviously Maduro isn't going to join Swift right when Visa and Mastercard are leaving. But in the end the Russians didn't want Petros but actual gold as payment... Petro is backed in a promise made by a "government" nobody believes in, no matter how "friendly" a foreign power might look...

This is good, widespread acceptance of sound money means the end of the hyperinflation is near.

It's technically correct that the driving forces behind hyperinflation are not to be found in the classical "socialism is evil an capitalism is good." A hyperinflation can occur in a capitalist nation or a totalitarian nation or a communist nation.

[Artemis3]

....
...

In an effort to hold as few Bolívars as possible, citizens have resorted to trading with their compatriots with American or Colombian bank accounts via Facebook messenger, Instagram, or Whatsapp.

....
I read the entire article and its very accurate. Americans are supposed to get a visa to enter now, which of course can't be obtained from within the USA anymore (it might be possible to obtain one from one of the Maduro's friendly countries, such as Bolivia).
....

He explains how merchants are starting to accept any money, informally (probably illegally, but that's the norm here). Just today i saw an imported product with a sign: $20 (as in USD). A few days ago i asked the price of a repaired chair and the shop owner told me $30, he didn't even bothered mentioning bolivares at all.

Petro was a waste of money to anyone who invested in it, it doesn't work like a crypto at all and nobody wants them. Obviously Maduro isn't going to join Swift right when Visa and Mastercard are leaving. But in the end the Russians didn't want Petros but actual gold as payment... Petro is backed in a promise made by a "government" nobody believes in, no matter how "friendly" a foreign power might look...

This is good, widespread acceptance of sound money means the end of the hyperinflation is near.

It's technically correct that the driving forces behind hyperinflation are not to be found in the classical "socialism is evil an capitalism is good." A hyperinflation can occur in a capitalist nation or a totalitarian nation or a communist nation.

Of course. Technically regardless of who owns the means of production, if the government can print money whenever they want, the problem remains. Of course, this is more likely to happen in a giant police state, than in a small, "let people get on with their lives without us interfering" state, but regardless of ruler, if they can mess with the money, they will.

One problem with these autocratic governments is they can keep repeating this mistake, sacrifice the population and keep doing it unperturbed, because nobody has the power to make them change or leave anymore.

Venezuela is such an example. "In order to build socialism", former institutions were "in the way" of the commander. So he dismantled (or bypassed) them, and he was able to rule as he pleased, and things more or less worked by his own strong-will. Until he died, and the successor (appointed by him, who knows why) ended being an inept who talks a lot but delivers nothing but misery to the people, and its always "In the name of Socialism".

Perhaps the problem is that there is a State to begin with... But even in an anarchy, if a group is able to produce money whenever they wanted, it would reproduce the same problem again. With Bitcoin, at least, the coin and the State (or a group, or institutions, etc) are separate.

[Spendulus]

....

One problem with these autocratic governments is they can keep repeating this mistake, sacrifice the population and keep doing it unperturbed, because nobody has the power to make them change or leave anymore.

Venezuela is such an example. "In order to build socialism", former institutions were "in the way" of the commander. ...

This comes to a natural halt with time. In historical hyperinflation, using alternative currencies may have carried the death penalty. But when it became necessary for even the soldiers and police of the government to accept those alternative currencies, then the laws once feared became widely disregarded and a joke. Reference the Roman and Chinese hyperinflation of ancient times.

[TheCoinGrabber]

This is good, widespread acceptance of sound money means the end of the hyperinflation is near.

It's technically correct that the driving forces behind hyperinflation are not to be found in the classical "socialism is evil an capitalism is good." A hyperinflation can occur in a capitalist nation or a totalitarian nation or a communist nation.

I'm don't know much about economic concepts but I do agree with capitalist countries also being vulnerable to hyperinflation. Didn't Brazil had something similar. I remember reading somewhere that they had to introduce a "non-circulating" currency at the time and used that to price goods.. I believe this was when the BRL was introduced.

[Naida_BR]

It seems like Petro was another way for Maduro's people to get more money and enrich corruption.
They used the blockchain technology wrongly and they disrespect the cryptocurrency industry. The sad thing is that people in Venezuela trusted this system but they ended up losing more money.

[KingScorpio]

venezuela declaration from european colonialism is massively destroying it, they are becoming the savage wilderness they where before colonisation.

[tomahawk9]

It seems like Petro was another way for Maduro's people to get more money and enrich corruption.

Did they actually get money thanks to that coin? It's hard to believe that a smart investor would fall for such an obvious centralized shitcoin. Sites like Wired, and Bloomberg, have called it a 'scam'^[1][2], that should give investors enough reasons to stay away from Petro.

The sad thing is that people in Venezuela trusted this system but they ended up losing more money.

People in Venezuela aren't stupid. Those people know that the Petro wasn't created to help the economy, they know it was mainly created to circumvent the US and european sanctions and to try to attract fresh capital from foreign investors. Even the National Assembly said the Petro is illegal^[3], so even from the get-go, no one (except for pro-maduro people), trusted this scamcoin called Petro.

1. https://www.wired.co.uk/article/venezuela-petro-cryptocurrency-bolivar-scam
2. https://www.bloomberg.com/news/articles/2018-04-03/crypto-rating-sites-are-already-calling-venezuela-s-petro-a-scam
3. https://www.coindesk.com/venezuelas-national-assembly-declares-petro-cryptocurrency-illegal

[vit05]

This is good, widespread acceptance of sound money means the end of the hyperinflation is near.

It's technically correct that the driving forces behind hyperinflation are not to be found in the classical "socialism is evil an capitalism is good." A hyperinflation can occur in a capitalist nation or a totalitarian nation or a communist nation.

I'm don't know much about economic concepts but I do agree with capitalist countries also being vulnerable to hyperinflation. Didn't Brazil had something similar. I remember reading somewhere that they had to introduce a "non-circulating" currency at the time and used that to price goods.. I believe this was when the BRL was introduced.

Yep. You could real more on wikipedia: https://en.wikipedia.org/wiki/Unidade_real_de_valor

The Daily Unidade Real de Valor, or URV (Portuguese, Real Value Unit), was a non-monetary reference currency (i.e., non-fiat) created in March 1994, as part of the Plano Real in Brazil. It was the most theoretically sophisticated piece of the Plano Real and was based on a previous academic work by Pérsio Arida and André Lara Resende, the "Larida Plan", published in 1984.

Its main purpose was to establish a parallel currency to the cruzeiro real, free from the effects of inertial inflation on the latter, which exceeded 1,200% per year prior to the implementation of the new currency, the real.

It was conceived as a temporary instrument to break up the "psychological inertia" that had ingrained in the Brazilian mindset and which caused prices to keep rising as a consequence of subjective estimation of inflation or preemptive adjustment without cost assessment. These phenomena are among the chief characteristics of hyperinflation, resulting from the erosion of confidence on the legal tender. The idea was to let the old currency (the cruzeiro real) fully absorb the effects of hyperinflation while having a new currency to be stable (in nominal terms) by adjusting its exchange rate against the old one.

The Brazilian had what many call the memory of inflation. It was necessary for the government to be able to demonstrate that it was possible to have a stable currency. Thus, the fear of prices always rise, become more associated with the old currency.

[Artemis3]

I'm don't know much about economic concepts but I do agree with capitalist countries also being vulnerable to hyperinflation. Didn't Brazil had something similar. I remember reading somewhere that they had to introduce a "non-circulating" currency at the time and used that to price goods.. I believe this was when the BRL was introduced.

Yep. You could real more on wikipedia: https://en.wikipedia.org/wiki/Unidade_real_de_valor

The Daily Unidade Real de Valor, or URV (Portuguese, Real Value Unit), was a non-monetary reference currency (i.e., non-fiat) created in March 1994, as part of the Plano Real in Brazil. It was the most theoretically sophisticated piece of the Plano Real and was based on a previous academic work by Pérsio Arida and André Lara Resende, the "Larida Plan", published in 1984.

Its main purpose was to establish a parallel currency to the cruzeiro real, free from the effects of inertial inflation on the latter, which exceeded 1,200% per year prior to the implementation of the new currency, the real.

It was conceived as a temporary instrument to break up the "psychological inertia" that had ingrained in the Brazilian mindset and which caused prices to keep rising as a consequence of subjective estimation of inflation or preemptive adjustment without cost assessment. These phenomena are among the chief characteristics of hyperinflation, resulting from the erosion of confidence on the legal tender. The idea was to let the old currency (the cruzeiro real) fully absorb the effects of hyperinflation while having a new currency to be stable (in nominal terms) by adjusting its exchange rate against the old one.

The Brazilian had what many call the memory of inflation. It was necessary for the government to be able to demonstrate that it was possible to have a stable currency. Thus, the fear of prices always rise, become more associated with the old currency.

This "inflation memory" is living strong here, and i don't know if there is a chance to "cure it" short of switching to US dollars. But of course the main fueling for inflation remains unchanged. Fact is printing money makes inflation, and this is of course not limited to socialism, but socialism tends to make it worse, since they tie down the economy all over the place with fixed prices, wages, and interests rates. And of course, ownership of the "means of production" means state monopolies all over the place and few or zero chance of escaping the rules imposed by the state.

The way things are moving right know, we are bound to have a yearly inflation of 10 million %.

I have however seen cases where hyperinflation stopped almost immediately when taking appropriate economic measures. By dropping the exchange and price controls, countries like Germany and Perú quickly recovered. They also made new coins, perhaps to help aid with that "inflation memory".

Maduro foolishly made "a new coin" but nothing else, this new coin lost its entire value in less than 6 months. The new coin was meant to be 5 zeroes less the early coin, it was made in September, but a couple of months ago prices of everything were already 5 zeroes higher. Its only going to get worse.

And while that madness occurs, there is this:



30 years of taboo built the world's current most corrupt military caste. A country with people eating from garbage, but gives gasoline away for free.

There is no sense in keeping this gasoline free mentality unless it means losing military support. The military of course traffic (and or help traffic) this gasoline out of the country, where it becomes 40k USD.

People (especially foreigners) tend to blame it all in oil prices, but they fail to see 90% of the profits made by PDVSA are wasted in this idiocy. Venezuela's gasoline "subsidy" goes beyond any sanity anyone could possibly have.

[nutildah]

It seems like Petro was another way for Maduro's people to get more money and enrich corruption.
They used the blockchain technology wrongly and they disrespect the cryptocurrency industry. The sad thing is that people in Venezuela trusted this system but they ended up losing more money.

During their big NEM token sale they raised about $250,000 altogether if you add up the tokens moved from their main address and multiply it by $60, roughly the price of a barrel of oil at the time.

Of course, they ended up ditching the whole thing in favor of releasing their own super duper X11 Dash hybrid coin, which, by all estimates, probably never even existed and was just numbers on a database or spreadsheet. Only a handful of Venezuelans bought paper certificates representing Petro holdings, but yeah, they all got shafted.

[Artemis3]

It seems like Petro was another way for Maduro's people to get more money and enrich corruption.
They used the blockchain technology wrongly and they disrespect the cryptocurrency industry. The sad thing is that people in Venezuela trusted this system but they ended up losing more money.

During their big NEM token sale they raised about $250,000 altogether if you add up the tokens moved from their main address and multiply it by $60, roughly the price of a barrel of oil at the time.

Of course, they ended up ditching the whole thing in favor of releasing their own super duper X11 Dash hybrid coin, which, by all estimates, probably never even existed and was just numbers on a database or spreadsheet. Only a handful of Venezuelans bought paper certificates representing Petro holdings, but yeah, they all got shafted.

Dash is considered centralized by some members of this forum, but I don't know the details surrounding its change from the Darkcoin era. Now take Dash, change its name into Petro, change it enough so that nobody else can participate (node, wallets, etc), put said nodes in a single data center, do not release wallets but force everyone to use the single online wallet in a single server (hosted in the same data center), pre-mine an abitrary number of coins, peg said coins to some other arbitrary value in the world's worst coin; back it all in promises and you get a close picture of what Petro is.

Naida_BR is not too far of, it all appears to be a State backed ICO scam operation. Good luck suing Maduro...

[tomahawk9]

So, I was going through social media to see how things are going in Venezuela and...Man, that country is so fucked.

Jorge Arreaza, (Minister of Foreign Affairs) said in a recent tweet that another venezuelan kid died waiting for bone marrow transplant because, according to them (pro-maduro gang), the US is blocking the funds for health programs. Tweet here in spanish.

But then you have Maduro talking in national television about approving 7 million dollars to manufacture submachineguns^[1]...So, there are funds for weapons but not for health programs that are in critical conditions...Interesting. But, here's the most disturbing part:

"I see the machine gun in the hands of the militia. In the neighborhood, on the street, "said Maduro.

What the fuck?

1. https://www.tellerreport.com/life/2019-05-24---maduro-says-he-approved-almost-7-million-euros-to-manufacture-a-submachine-gun-.Sknqp0VpN.html

[TheHas]

Pretty good read. I would have liked it if they had more detail about the individual interviews they did with refugees.

What a tough situation for these people. I have no idea how it will end but it can't go forever.

[Artemis3]

Its like North Korea. We can't have working hospitals, with actual medicine or even cleaning tools in them, or food for the people, but (Maduro and his people) gets weapons and money for "defense", against "imperialism", which is the root of all evil, but they will "defeat it" because they are almighty and Socialism triumphs Capitalism. Yeah, just watch something from the State media, maybe you'll end like Homer Simpson in that Cuba episode...

It is the same sad story, only those who survived the eastern bloc would understand...

Of course the only reason to arm the militias is to suppress those "dangerous" demonstrations (unarmed civilians demanding electricity and water) seen during the blackouts of March. Their forces have already plenty of Kalashnikovs (and license to manufacture them, thanks to a previous agreement with Russia) so the reason to add another caliber makes little sense unless there is a plan to export sale...

Only now you get to learn about the patients deaths, this has been occurring for the last 6 years, children as well. A few managed to flee the country, many simply died waiting, but make only a note in digital media, as the entirety of the traditional paper/radio/tv media is under their control and censorship with internet constantly suffering censorship we have had to learn methods used by Iranian and Chinese dissidents to circumvent.

[uneng]

This is what happens when the military forces of a country are corrupt. This country wouldn't reach so deep in this tragedy if their militaries were really patriot. And actually, Maduro just hasn't fall yet because he has the national bolivarian army on his hands.
It's a shame soldiers are killing their own people to defend socialism and a miserable tyrant, furthermore, turning a blind eye to drug trafficking and militias mainly composed by criminals of all sorts, especially drugs dealers.

[tvbcof]

...

"I see the machine gun in the hands of the militia. In the neighborhood, on the street, "said Maduro.

What the fuck?
...

Wow!  A leader who trusts his own people enough to give them the tools they need to fight off invaders and treasonous sell-outs.  I like Maduro better now.  He ain't no Hugo Chavez, but an effective Nationalist all-to-same by the looks of things.

Looks like Venezuela has pretty well beaten back the Zio-con attack on his country.  Viva Venezuela!

[tomahawk9]

...

"I see the machine gun in the hands of the militia. In the neighborhood, on the street, "said Maduro.

What the fuck?
...

Wow!  A leader who trusts his own people enough to give them the tools they need to fight off invaders and treasonous sell-outs.  I like Maduro better now.  He ain't no Hugo Chavez, but an effective Nationalist all-to-same by the looks of things.

Looks like Venezuela has pretty well beaten back the Zio-con attack on his country.  Viva Venezuela!

Hmm, interesting how you decided to snip this part from my post:

So, there are funds for weapons but not for health programs that are in critical conditions...

I guess you have nothing to say about that since you're probably on the same wavelength as Maduro and his gang thinking that weapons and military uniform are far more important than providing funds to health programs and the national electrical system which is a complete disaster.

[KingScorpio]

without the impulse of a european christian power a latin american society crushes down.

without christian nathalism and communism, a latin american economy and society is doomed

[tvbcof]

...

"I see the machine gun in the hands of the militia. In the neighborhood, on the street, "said Maduro.

What the fuck?
...

Wow!  A leader who trusts his own people enough to give them the tools they need to fight off invaders and treasonous sell-outs.  I like Maduro better now.  He ain't no Hugo Chavez, but an effective Nationalist all-to-same by the looks of things.

Looks like Venezuela has pretty well beaten back the Zio-con attack on his country.  Viva Venezuela!

Hmm, interesting how you decided to snip this part from my post:

So, there are funds for weapons but not for health programs that are in critical conditions...

I guess you have nothing to say about that since you're probably on the same wavelength as Maduro and his gang thinking that weapons and military uniform are far more important than providing funds to health programs and the national electrical system which is a complete disaster.

I snipped because I only wanted to comment about a leader trusting his citizens with weaponry.  It's very rare, and it is almost always a good sign.  It is, of course, anathema to the Talmudics (except for a small class of rabid Zionists in the criminal state of Israel) since it will be a lot harder to control a people without having a monopoly on the use of force.

Maduro has to keep his country independent from the international bankers as a top priority.  To the extent that the population is suffering, and the design of international sanctions is to starve out the people, it's a balancing act and not one which Maduro or the people of Venezuela wish to be playing.  It's a Zio-con game that they are forced to play.

All the boo-hoo'ing about 'providing health care' from the very same people who are trying their best to starve the Venezuelan people out is a laughable charade to anyone paying any attention at all.  Really it is.  You should be embarrassed.

Unfortunately for the Zio-cons, the people of Venezuela remember life while the international corporations were running the show and stealing all the resources from the nation.  It was hardly peaches and cream at that point either except for a few 'elite'.  When Chavez started using some of the country's oil wealth for health care, housing, etc, life got a lot better for a lot of the population.  I suspect that they remember that well, and I suspect it is why you guys are failing so hard.