Venezuela Planning New 100,000-Bolivar Bills Worth Just $0.23

[LUCKMCFLY]

$.65 for the new 1,000,000 Bolivar Bill

I don't understand the point in printing banknotes that don't have any value. If the 1 million Bolivar banknote is worth just $0.65, what is the point in printing it? I guess it will cost the government more than $0.65 to print and distribute these banknotes. And going by the inflation rate, the value of this banknote may become $0.10 or $0.05 in a couple of weeks. Why can't they just use the US Dollar or Colombian Peso?

The point of printing those bills is that they are intented to people who do not have a stable income in USD or Cryptocurrency, so they only have their min wage, which is about 1$ montly.

Besides, there is something that is not commoinly mentioned in media: prices of food are lower is Cash (bolivars) in comparison to bank transferences, so people who earn Bolivars are encouraged to spend 2-3 hours in a line at the bank in order to get their 1$-2$ in cash (these new bills) in order to save 20%-50% when buying food. This something I have had to do in the past with my mother in order to save money.

This demand is theorized to come from the fact that our bills are used to counterfeit USD bills in countries like Colombia and other fishy things, because at this point our paper is free raw material for illegal things like that.

The main reason why the new flow of banknotes of that value becomes evident is because they do not reach the lowest denomination and there are not, they cannot print so many banknotes to reach the value of the dollar, which is the reference for the government, if If you make a banknote with a very high denomination, you can avoid so much paper for the best handling, but even so this is not enough, inflation will reach the value of the banknote in less than 1 month, which would cause much more inflation.

The government has dollarization only for them, not for the people, they only pay the people in Bs but everything, goods and services are in dollars, and the worst thing is that inflation is added to the dollar or any foreign currency, that is why the economy is impossible to control, actually as I see it, it has no solution in the traditional economy.

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1714833863

[Sithara007]

It used to be de jure illegal, but it was made legal back in 2018 again, (many people of the political left did not like that), since then the usage has only increased and prices are not longer tagged in local currency. So it is not an underground thing as some may expect.

The police is corrupt in general, it is not a cash thing. If you are carrying something they like, they shall give you the stop and ask you for proof you own whatever you are carrying, in order to have an excuse to seize it: Cash, A new TV, Electronic instruments, you name it.

It has only happened to me once, stole a collectible german coin of mine 

Cops are corrupt in most of the third world nations, and here in India things were much worse two decades ago. Even now we hear about isolated incidents once in a while, but in general the situation seems to have improved a little. A lot of things are in the grey area (neither legal, nor illegal) and the cops always make use of this loophole to loot the ordinary citizens. Arguing with them is a waste of time, and can be harmful to your health.

[Hispo]

I did not know the dollar was made legal for all, that is something at least.    Shame the dollar itself has quite severe inflation for anyone abroad and outside QE programs and so not close to the source; dollar also is constant money printing but its on a far lower rate.

then the extrapolated inflation rate is currently 32%. Compared to previous years, this is low, but still extremely high, and no one really knows if the data is not manipulated in some way.

Thats extreme inflation but its not hyper inflation.  This is a similar rate of inflation to the UK during the 1970's widely seen as a time of failure, closed industry, failing electric supply and striking labour forces; the IMF in that case had to assist in some kind of rescue to the country in order to avoid a collapse.

it will cost the government more than $0.65 to print and distribute these banknotes.

They can print a note for less then a cent probably, no other business can rival that kind of easy return.   Its the US 1 dollar which is made from cotton and has all kinds of costs that might exceed its face value

there are things that can't be blamed to oil prices...

The global oil price is lower then it should be, its a reflection of lower global growth and Im speaking of a decade view not recent upsets especially.   Obviously alternative energy sources will become more apparent but thats not the greatest explanation, oil is hard to beat on a calorific value just like coal is still useful a hundred years after its peak.   OPEC will continue to have a hard time keeping oil prices towards where they want them, its an ongoing challenge for every oil producer.

Oil prices will likely to increse after the virus gets under control, however the situation of my country as oil producer is fragile.
Our infrastructure is not prepared and our production has descended much, so private participation by companies like Shell, Chevron, and the Russian ones ect will increase.
We dont have the money to repair this ourselves.

[Hispo]

$.65 for the new 1,000,000 Bolivar Bill

I don't understand the point in printing banknotes that don't have any value. If the 1 million Bolivar banknote is worth just $0.65, what is the point in printing it? I guess it will cost the government more than $0.65 to print and distribute these banknotes. And going by the inflation rate, the value of this banknote may become $0.10 or $0.05 in a couple of weeks. Why can't they just use the US Dollar or Colombian Peso?

The point of printing those bills is that they are intented to people who do not have a stable income in USD or Cryptocurrency, so they only have their min wage, which is about 1$ montly.

Besides, there is something that is not commoinly mentioned in media: prices of food are lower is Cash (bolivars) in comparison to bank transferences, so people who earn Bolivars are encouraged to spend 2-3 hours in a line at the bank in order to get their 1$-2$ in cash (these new bills) in order to save 20%-50% when buying food. This something I have had to do in the past with my mother in order to save money.

This demand is theorized to come from the fact that our bills are used to counterfeit USD bills in countries like Colombia and other fishy things, because at this point our paper is free raw material for illegal things like that.

The government has dollarization only for them, not for the people, they only pay the people in Bs but everything, goods and services are in dollars, and the worst thing is that inflation is added to the dollar or any foreign currency, that is why the economy is impossible to control, actually as I see it, it has no solution in the traditional economy.

There is a detail that it is worth mentioning: Private business (specially franchises and nationwide companies) are paying their employers a wage in USD. It is no much (20$-200$ / month depending on the job) and it is paid in Bolivars at the day's rate in most of the cases.

However, the biggest employer within the country is the government, and they do not do this and simply pay the min wage plus some survival bonus and a bag of food in the best case scenario.

What you said is true, that is why people in general have a rough time when comes to trust their few dollars to the brand new USD bank accounts approved by the government.

[Hispo]

It used to be de jure illegal, but it was made legal back in 2018 again, (many people of the political left did not like that), since then the usage has only increased and prices are not longer tagged in local currency. So it is not an underground thing as some may expect.

The police is corrupt in general, it is not a cash thing. If you are carrying something they like, they shall give you the stop and ask you for proof you own whatever you are carrying, in order to have an excuse to seize it: Cash, A new TV, Electronic instruments, you name it.

It has only happened to me once, stole a collectible german coin of mine 

Cops are corrupt in most of the third world nations, and here in India things were much worse two decades ago. Even now we hear about isolated incidents once in a while, but in general the situation seems to have improved a little. A lot of things are in the grey area (neither legal, nor illegal) and the cops always make use of this loophole to loot the ordinary citizens. Arguing with them is a waste of time, and can be harmful to your health.

I thought India had this kind of moral problems under control, to be honest.
Through severe punishments to offenders in uniform.

[LUCKMCFLY]

$.65 for the new 1,000,000 Bolivar Bill

I don't understand the point in printing banknotes that don't have any value. If the 1 million Bolivar banknote is worth just $0.65, what is the point in printing it? I guess it will cost the government more than $0.65 to print and distribute these banknotes. And going by the inflation rate, the value of this banknote may become $0.10 or $0.05 in a couple of weeks. Why can't they just use the US Dollar or Colombian Peso?

The point of printing those bills is that they are intented to people who do not have a stable income in USD or Cryptocurrency, so they only have their min wage, which is about 1$ montly.

Besides, there is something that is not commoinly mentioned in media: prices of food are lower is Cash (bolivars) in comparison to bank transferences, so people who earn Bolivars are encouraged to spend 2-3 hours in a line at the bank in order to get their 1$-2$ in cash (these new bills) in order to save 20%-50% when buying food. This something I have had to do in the past with my mother in order to save money.

This demand is theorized to come from the fact that our bills are used to counterfeit USD bills in countries like Colombia and other fishy things, because at this point our paper is free raw material for illegal things like that.

The government has dollarization only for them, not for the people, they only pay the people in Bs but everything, goods and services are in dollars, and the worst thing is that inflation is added to the dollar or any foreign currency, that is why the economy is impossible to control, actually as I see it, it has no solution in the traditional economy.

There is a detail that it is worth mentioning: Private business (specially franchises and nationwide companies) are paying their employers a wage in USD. It is no much (20$-200$ / month depending on the job) and it is paid in Bolivars at the day's rate in most of the cases.

However, the biggest employer within the country is the government, and they do not do this and simply pay the min wage plus some survival bonus and a bag of food in the best case scenario.

What you said is true, that is why people in general have a rough time when comes to trust their few dollars to the brand new USD bank accounts approved by the government.

You're right, but that happens more than everything in the country's capital in Caracas, but internally the economy is clearly dollarized, that is, if you win 100 USD or 200 USD, you can not buy all items, foods in general, if it is a Family of 3 Yes, but an older family of 3, here is so uncontrolled the economy that includes inflation to foreign currency, is how I say, it is crazy, however, if there is a population that is very rich. .

Another part of the population depends on the remittances that send them from other countries, is an economy that the solution in traditional ecomonia does not have it, and without mentioning the medications that there are only, many people die due to lack of treatment.

[verita1]

You are totally right. The Venezuelan tries to survive to buy food and not all the basic items for a balanced diet. It is sad but it is true, also when there are health problems it is difficult for some to buy their medicines as one might suppose.
I still do not see a solution how the country can improve its economy. Venezuela has a potential in natural wealth, fertile land and others so that it alone can overcome its crisis.

[Vishnu.Reang]

Oil prices will likely to increse after the virus gets under control, however the situation of my country as oil producer is fragile.
Our infrastructure is not prepared and our production has descended much, so private participation by companies like Shell, Chevron, and the Russian ones ect will increase.
We dont have the money to repair this ourselves.

I believe that the only option left for the Venezuelan government is to again go for privatizing the oil fields. The national oil producer is in bad condition and it is unable to operate in a profitable and effective manner. At least the government should allow investment from friendly countries such as Russia and China, so that they will repair the infrastructure and boost the oil production. The government will also benefit, in the form of increased tax revenue. But I don't know whether the socialist government will take a favorable view about privatization.

[Hispo]

Yesterday, had to stay in a line for two hours for 4 bills of 500k Bolivars.
Barely any social distancing and the line was easily more than 600 people, outside the bank.

I believe I will have to go today as well..

[Hispo]

Oil prices will likely to increse after the virus gets under control, however the situation of my country as oil producer is fragile.
Our infrastructure is not prepared and our production has descended much, so private participation by companies like Shell, Chevron, and the Russian ones ect will increase.
We dont have the money to repair this ourselves.

I believe that the only option left for the Venezuelan government is to again go for privatizing the oil fields. The national oil producer is in bad condition and it is unable to operate in a profitable and effective manner. At least the government should allow investment from friendly countries such as Russia and China, so that they will repair the infrastructure and boost the oil production. The government will also benefit, in the form of increased tax revenue. But I don't know whether the socialist government will take a favorable view about privatization.

We already have private oil companies operating here, even Chevron.

https://www.chevron.com/worldwide/venezuela

Also, there is a low process of privatization people speculate how far it will get, though

[Leonardo7]

I thought the country wanted to go digital in their currency to fight inflammation. If Petrodollar has failed, why not the country adopt bitcoin as a major currency alongside their dead fiat to fight inflammation?. I understand the country has a major political crisis and riddled with corruption. Printing more fiat won't help the nation move forward.

[Sithara007]

I thought the country wanted to go digital in their currency to fight inflammation. If Petrodollar has failed, why not the country adopt bitcoin as a major currency alongside their dead fiat to fight inflammation?. I understand the country has a major political crisis and riddled with corruption. Printing more fiat won't help the nation move forward.

I don't think any country in the foreseeable future will make Bitcoin as the national currency. Why should they? With fiat currency, the government can print unlimited amounts of money and use it for various expenses. It suits bankrupt countries such as Venezuela. If they go for Bitcoin, then due to the principle of controlled supply, it is not possible to do that. I don't think that the Venezuelan government can afford to give any sort of legality on the usage of Bitcoin as a legal tender.

[awik p]

I thought the country wanted to go digital in their currency to fight inflammation. If Petrodollar has failed, why not the country adopt bitcoin as a major currency alongside their dead fiat to fight inflammation?. I understand the country has a major political crisis and riddled with corruption. Printing more fiat won't help the nation move forward.

In the past, their fiat currency had no value, so Venezuela uses cryptocurrency. Apart from the political crisis, Venezuela is slumped by the fall in oil prices that has occurred, so with the current advancement of bitcoin, hopefully their country will continue to grow.

[tyz]

I thought the country wanted to go digital in their currency to fight inflammation. If Petrodollar has failed, why not the country adopt bitcoin as a major currency alongside their dead fiat to fight inflammation?. I understand the country has a major political crisis and riddled with corruption. Printing more fiat won't help the nation move forward.

I don't think any country in the foreseeable future will make Bitcoin as the national currency. Why should they? With fiat currency, the government can print unlimited amounts of money and use it for various expenses. It suits bankrupt countries such as Venezuela. If they go for Bitcoin, then due to the principle of controlled supply, it is not possible to do that. I don't think that the Venezuelan government can afford to give any sort of legality on the usage of Bitcoin as a legal tender.

There won't be any because Bitcoin is not at all suitable as a currency for everyday use. There is no country in the world where you go to the bakery in the morning and pay with gold. Moreover, a country would give up its sovereignty over money. No politician would do that.

[sunsilk]

I thought the country wanted to go digital in their currency to fight inflammation. If Petrodollar has failed, why not the country adopt bitcoin as a major currency alongside their dead fiat to fight inflammation?. I understand the country has a major political crisis and riddled with corruption.

What they've adopted as an alternative currency is USD. And you cannot expect a country to adopt bitcoin that quickly, the government cannot rely on it because it is decentralized.

But the citizens, many of them have found survival on bitcoin because it's convertible to the dollar and it's easier for them to buy and sell through it.

Printing more fiat won't help the nation move forward.

That's why they are in hyper inflation.

[LUCKMCFLY]

I thought the country wanted to go digital in their currency to fight inflammation. If Petrodollar has failed, why not the country adopt bitcoin as a major currency alongside their dead fiat to fight inflammation?. I understand the country has a major political crisis and riddled with corruption.

What they've adopted as an alternative currency is USD. And you cannot expect a country to adopt bitcoin that quickly, the government cannot rely on it because it is decentralized.

But the citizens, many of them have found survival on bitcoin because it's convertible to the dollar and it's easier for them to buy and sell through it.

Printing more fiat won't help the nation move forward.

That's why they are in hyper inflation.

In Venezuela, the levels that were released according to the Caracol Noticias(TV) (Colombia) was that inflation is around 3800%, but to be more honest this amount exceeds 5000%, what happens is that the Central Bank of Venezuela does not Publish the true figure, because the Government prohibits it, obviously the country is dollarized, but it is a dollarization of another Universe, since the government does not pay wages and salaries in dollars but in local currency (Bs.S), for the province The country handles Dollars and Colombian Pesos (COP) this because of its proximity to the neighboring country, which in fact the border between Colombia and Venezuela through San Antonio del Táchira was the most active in the world, now people go through the "Trochas" in rafts improvised passing through a dangerous river, in search of their articles, food and basic articles, since in Colombia the prices are not so high and they are of good quality.

[Sithara007]

There won't be any because Bitcoin is not at all suitable as a currency for everyday use. There is no country in the world where you go to the bakery in the morning and pay with gold. Moreover, a country would give up its sovereignty over money. No politician would do that.

You are absolutely spot on. Bitcoin can be used as a payment, but it is not suitable for making day to day payments. The confirmation tome can vary from 5 minutes to 1 hour. Who is going to wait for this much time, to get his payment confirmed? Another issue is with the extremely high transaction fee. It's on the rise once again, and yesterday everyone was paying an average fee of around $20. Imagine paying this much as the fee for a coffee or burger, which itself costs just $3.

[jaysabi]

There won't be any because Bitcoin is not at all suitable as a currency for everyday use. There is no country in the world where you go to the bakery in the morning and pay with gold. Moreover, a country would give up its sovereignty over money. No politician would do that.

You are absolutely spot on. Bitcoin can be used as a payment, but it is not suitable for making day to day payments. The confirmation tome can vary from 5 minutes to 1 hour. Who is going to wait for this much time, to get his payment confirmed? Another issue is with the extremely high transaction fee. It's on the rise once again, and yesterday everyone was paying an average fee of around $20. Imagine paying this much as the fee for a coffee or burger, which itself costs just $3.

It’s efficient for transferring large values but not at all suitable for small transactions, which is why it isn’t suitable as a currency. Cross border transactions are are good use for speed and cost, but that doesn’t make it a good currency.

[Gyfts]

I always found Venezuela so interesting, because it can act as almost a "case study" as to how badly and quickly socialism can derail a country. The moment means of production were ran by government, the country's economy crashed (due to oil prices as well, but Venezuela put all of its eggs in one basket thanks to government control). Then what was left was citizens fighting with each other to eat stray dogs or competing for government sponsored rations of food.

[sunsilk]

~snip~

In Venezuela, the levels that were released according to the Caracol Noticias(TV) (Colombia) was that inflation is around 3800%, but to be more honest this amount exceeds 5000%, what happens is that the Central Bank of Venezuela does not Publish the true figure, because the Government prohibits it, obviously the country is dollarized, but it is a dollarization of another Universe, since the government does not pay wages and salaries in dollars but in local currency (Bs.S), for the province The country handles Dollars and Colombian Pesos (COP) this because of its proximity to the neighboring country, which in fact the border between Colombia and Venezuela through San Antonio del Táchira was the most active in the world, now people go through the "Trochas" in rafts improvised passing through a dangerous river, in search of their articles, food and basic articles, since in Colombia the prices are not so high and they are of good quality.

That means that the numbers that they're showing isn't the actual yet it's already high. But in actuality, it's even higher than what they're showing to the public and if that information from Caracol is for real, that's surprising although it's really hyperinflation.

I've watched a video about the citizens crossing borders and Colombia is where most of them are going because life and economy are better than their mainland.