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

[DrBeer]

It looks like the situation in Venezuela continues to deteriorate. Yesterday I heard information on the news channels that a bill of one million bolivars is already being printed in Venezuela. Thus, inflation in this country continues to rise sharply.
As long as the power crisis continues in Venezuela, the economic situation will only get worse. President Maduro needs to step down and call democratic elections. However, everything is not so simple. Russia alone has invested tens of billions of dollars in the Maduro regime.

BS. First of all, Russia doesn't have that sort of money to invest in Venezuela (tens of billions of $$$  ). And secondly, if they had invested that much, then the situation would have been far better. The truth is that the Venezuelan society is deeply divided in to two camps. One camp supports Maduro and the socialists and they have managed to defeat the other camp led by Juan Guaidó, who is supported by the United States. It is up to the Venezuelans to elect their leaders, and we can't do anything about it.

Russia has a lot of money. And the joke is that they have money for any idiotic projects, including the support of absolutely idiotic rulers, or even criminal regimes. But there is no money for its citizens! For them (the population of Russia) the retirement age is increasing, incomes, the level of social services, medicine, and education are decreasing. But they will allocate billions of dollars to support the inadequate Maduro. Such is the strange form of idiocy in Russia

[Vishnu.Reang]

Russia has a lot of money. And the joke is that they have money for any idiotic projects, including the support of absolutely idiotic rulers, or even criminal regimes. But there is no money for its citizens! For them (the population of Russia) the retirement age is increasing, incomes, the level of social services, medicine, and education are decreasing. But they will allocate billions of dollars to support the inadequate Maduro. Such is the strange form of idiocy in Russia

They undertake "idiotic" projects so that they will receive returns from it in the future. I am talking about projects such as Nord Stream 2 and Power of Siberia pipeline. These projects cost a lot of money, but ultimately they are going to benefit them. On the other hand, what are they going to gain from a bankrupt country such as Venezuela, where the currency notes are valued less than toilet paper? No one will be stupid enough to spend their money in such a country.

[mrquackquack]

Anybody know where to get Venezuelan Bolivars in the U.S.?

[bryant.coleman]

Anybody know where to get Venezuelan Bolivars in the U.S.?

You have a hobby of collecting banknotes and coins? In that case you can easily purchase Bolivar banknotes from Ebay. Else you can go for sites that are more specific, such as www.banknoteworld.com. I don't think that you will be able to purchase Bolivar banknotes from forex services (Western Union.etc), as Venezuela is currently under sanctions and embargoes imposed by the United States.

[Hispo]

As Venezuelan, I call tell you that people don't even use local currecy banknote here anymore. 

[Hispo]

Anybody know where to get Venezuelan Bolivars in the U.S.?

If I could, I would sell some I have to you.
I have got like half cabinet full of them. 

[Hispo]

Well.. just one small question here. Why can't they just re-denominate their currency? Not saying that it is going to slow down the inflation rate, or keep more money in the treasury.. but having bills of 100,000 or 250,000 sound really weird. If I was the finance minister, then I would re-denominate the currency by a factor of 1 million. So the rate becomes 1 New Bolivar = $2.30. It is not going to last long.. but still, it is worth giving a try.

We have already done that two times.

Back in 2007 (Removed three zeros)
And back in ... 2018, I think. (Removed five zeros)

So, in reality 1.000.000 Bs today is in fact 100.000.000.000.000 Bs

[bryant.coleman]

As Venezuelan, I call tell you that people don't even use local currecy banknote here anymore. 

So do you guys use US Dollar or Brazilian Real? A few months back I read that ordinary citizens are not allowed to keep their wealth in the form of foreign currency. Also, gold is very difficult to purchase. This can be disastrous for common people, when the currency is devaluing at a rate of 1000 times in a year. $1,000 worth of savings can be worth $1 after 12 months. So how do you guys get around these restrictions?

[Kittygalore]

As Venezuelan, I call tell you that people don't even use local currecy banknote here anymore.  

Is the inflation there still that bad? I looked at the Internet and saw that it is slowly stabilizing or is it just a fake story. Venezuela was a prosperous country back when the prices of oil were still good and I thought that they were ready when the oil prices were to go down.

[STT]

They have a military dictatorship for government and an economy, nothing is stabilising under that load.  All that can be said is the oil price rose a bit, as I understand it the military is involved in drug trafficking and benefits personally from that.   If you know rich people you might survive but the economy outside of that corruption is a failure.
  Venezuela has the largest proven oil reserves in the world, greater then the middle eastern countries but crucially its sour crude oil which needs refinement before use.   At best they would have efficient innovative industry but as the country is ruled by the gun its a failure getting worse because no investment can be made.

So how do you guys get around these restrictions?

The only way to deal in a country with failed currency is via barter, it becomes an agrarian economy probably and they transport raw goods across a border to trade elsewhere.  I dont suppose they survive very well otherwise.

[Hispo]

As Venezuelan, I call tell you that people don't even use local currecy banknote here anymore. 

So do you guys use US Dollar or Brazilian Real? A few months back I read that ordinary citizens are not allowed to keep their wealth in the form of foreign currency. Also, gold is very difficult to purchase. This can be disastrous for common people, when the currency is devaluing at a rate of 1000 times in a year. $1,000 worth of savings can be worth $1 after 12 months. So how do you guys get around these restrictions?

People in general has adopted the United State Dollar as a de facto currency co-existing with the Bolivar, we are allowed to hold foreign currency so that is what people use very often (businesses don't tag their products in Bolivars anymore, but in USD), people also use Bolivars but only digitally (debit accounts) to buy things, when one needs to use cash one uses Dollars, Colombian Pesos or Brazilian Reales in the case of the cities close to the borders.

The youth has also learnt how to use services like exchanges or providers of pre-paid cards in order to safe in USD and crypto-currency.

In general, we are allowed to carry USD (I have seen people paying for much food with 50$ and 100$ bills) but still there is a small chance to encounter a corrupt police officer/military which may seize the cash you carry with you, it happens but it is not a general problem yet.

[Hispo]

As Venezuelan, I call tell you that people don't even use local currecy banknote here anymore.  

Is the inflation there still that bad? I looked at the Internet and saw that it is slowly stabilizing or is it just a fake story. Venezuela was a prosperous country back when the prices of oil were still good and I thought that they were ready when the oil prices were to go down.

It has slowed down indeed, it was very wild back in 2016-2017. The prices of everything could easily double in a few days.
But now the inflation (even though still exists) is not going so fast as before, it is still devastating, though.

I personally believe our current political administration is quite bad, there are things that can't be blamed to oil prices...

[Sithara007]

People in general has adopted the United State Dollar as a de facto currency co-existing with the Bolivar, we are allowed to hold foreign currency so that is what people use very often (businesses don't tag their products in Bolivars anymore, but in USD), people also use Bolivars but only digitally (debit accounts) to buy things, when one needs to use cash one uses Dollars, Colombian Pesos or Brazilian Reales in the case of the cities close to the borders.

The youth has also learnt how to use services like exchanges or providers of pre-paid cards in order to safe in USD and crypto-currency.

In general, we are allowed to carry USD (I have seen people paying for much food with 50$ and 100$ bills) but still there is a small chance to encounter a corrupt police officer/military which may seize the cash you carry with you, it happens but it is not a general problem yet.

So the feeling I get is that owning US Dollar banknotes is de jure illegal, but not de facto. But this is grey area and issues can arise for ordinary people. As Hispo mentions, it makes them vulnerable to harassment from corrupt police officials (seizing the cash seems like daylight robbery). And this is also one of the reasons to store your wealth in digital assets such as cryptocurrency, rather than carrying around banknotes or bullion.

[tyz]

As Venezuelan, I call tell you that people don't even use local currecy banknote here anymore.  

Is the inflation there still that bad? I looked at the Internet and saw that it is slowly stabilizing or is it just a fake story. Venezuela was a prosperous country back when the prices of oil were still good and I thought that they were ready when the oil prices were to go down.

The country recently introduced the 1 million Bolivar bank note worth around $0.52. According to Reuters, the inflation rate was 2.7% in January, so if you consider a stable monthly inflation 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.

[mrquackquack]

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

[Vishnu.Reang]

$.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?

[ivankoh]

Symptoms of inflation and debt in Venezuela were warned of failure in 2019. At the same time, epidemic covid 19 also made the economy worse.  This situation lasted until now.  Their central bank announced the issuance of new currency denominations of 200,000, 500,000 and 1 million Bolivars.  In fact, when looking at the par value fairly in developing countries is still at a "balanced" and acceptable price.  But when the embargo and escalation of evils are high, the request is not met and even 1 million Bolivars is equivalent to $ 50.  Unfortunately, foreign policies involving many specific issues have pushed this "oil-rich country" ship into a black hole.

[Hispo]

People in general has adopted the United State Dollar as a de facto currency co-existing with the Bolivar, we are allowed to hold foreign currency so that is what people use very often (businesses don't tag their products in Bolivars anymore, but in USD), people also use Bolivars but only digitally (debit accounts) to buy things, when one needs to use cash one uses Dollars, Colombian Pesos or Brazilian Reales in the case of the cities close to the borders.

The youth has also learnt how to use services like exchanges or providers of pre-paid cards in order to safe in USD and crypto-currency.

In general, we are allowed to carry USD (I have seen people paying for much food with 50$ and 100$ bills) but still there is a small chance to encounter a corrupt police officer/military which may seize the cash you carry with you, it happens but it is not a general problem yet.

So the feeling I get is that owning US Dollar banknotes is de jure illegal, but not de facto. But this is grey area and issues can arise for ordinary people. As Hispo mentions, it makes them vulnerable to harassment from corrupt police officials (seizing the cash seems like daylight robbery). And this is also one of the reasons to store your wealth in digital assets such as cryptocurrency, rather than carrying around banknotes or bullion.

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 

[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.

[STT]

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.