Enjoy communism (II): Venezuela to cut 6 zeros from its currency

[Sithara007]

The bad part of the situation in Venezuela does not seem to have a solution in the short term. It does not appear that Biden is willing to invade the country. Not for a humanitarian issue and not for oil. And the little opposition left in the country is too weakened by hunger to mount a revolution. .

Biden will consider invasion once the oil prices are back to $120 per barrel level. At current prices, the oil deposits in Venezuela doesn't make much of a profit. But Biden/Kamala regime has been moving closer to Venezuela, in terms of economic policies. The first thing Biden did after coming to power was to increase the taxes, left, right and the center. And the second thing was to sabotage various shale oil and pipeline projects. This has ensured sky high profits for the OPEC and higher inflation levels in the United States. I hope Biden will soon be able to push crude oil to $100-$120 level. Then Kamala will congratulate him by saying "we did it Joe!".

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[Poker Player]

The title may be misleading.
In my country the "raging inflation" has started after "communism has died and got replaced by democracy"(*).
After some years, when the inflation was not that bad any longer they've cut 4 zeros from our currency.

So it may not be related that much to communism. I don't want (by any mean) to say that communism would be good, just democracies, especially the not 100% working ones, should also be afraid of this kind of scenarios (unless using bitcoin, obviously )

Actually the post is a continuation of the other one, in which I think you also commented, and how communism ends up being a disaster, although it is very nice in theory, what I wanted to reflect are the consequences of applying it as it is. In the fall of the USSR there was also a hyperinflationary collapse, which is not to say that hyperinflationary scenarios are exclusive to communism. I think fillippone specifies it well:

Let's put this way:

Enjoying power groups interfering indebtedly with free markets.

When they do this by design, as in communism, or by "accident" (let's be gentle and put it this way") as in broken democracies, this is recipe for disaster.

I guess you know well what you are talking about, as I remember that Italy before joining the Euro was also famous for inflation.

Say what?  Why would the US invade Venezuela?  Why should we?  I don't know about you or anyone else, but I'm tired of the US trying to be the world's moral police.  We're in no position to do that anymore, if we ever were.  Nor am I confident that the US could afford to render aid to Venezuela--we've got our own crises forming here, and it's going to get a hell of a lot worse before it gets better.

I mentioned that because in the previous thread it was said that the USA does not intervene in Cuba because there are only poor people there and they have nothing to take out, unlike Iraq where there was oil. If that is the reason, it is not understood why it does not invade Venezuela.

Oh, common, the US has a lot of oil, it has thousands of wells that are stopped because there was simply no demand, there are enormous reserves, why would they invade a country to get the costliest oil in the world?

I didn't know that. But is it the hardest to extract because of the way it is managed in Venezuela or is there something in the reserves that makes it especially difficult to extract the oil?

[NeuroticFish]

Actually the post is a continuation of the other one, in which I think you also commented

I guessed that  , but I am sure that you got my point. And yes, fillippone has found pretty much the best way to express it in words.

[dkbit98]

Due some acquittances, I have quite decent information about what is up in Venezuela. One of the things that is happening is that obviously people are ignoring as much as possible the local currency. Whether bitcoin our USD, they are definitely  not getting to use the local coin regularly. The main exception are employees with salaries denominated in bolivars, in which case they have to undertake extra activities to make sure they  get to eat everyday or every other day anyway.

I heard that they have official and unofficial-real rate for exchanging their worthless bolivar paper money for other fiat currencies, but I bet there are many people on streets who are doing this exchanges just to survive.
It's crazy that something like this can happen to a country with such rich natural resources and position in world but greed and corruption knows no limits, and similar thing is not far away from US and other western countries.

The problem is that this country is going to swing from communist to a ferocious if not dictatorial regime which may solve some issues and create newer ones.

Isn't communism by it's definition already dictatorial system of governance, and we saw how that ended up in other countries.
China is moving to new age communism with complete totalitarian system of control, every segment of society is controlled and tracked, problem is that this ''virus'' is now spreading globally.

[Hydrogen]

Cubans were recently revolting against the government in cuba. Venezuela and north korea may try to improve economic conditions for citizens, to prevent them from revolting as well.

Venezuela was once one of the wealthiest nations in south america. In the present day I do not believe they have the start up capital or technical sophistication to rollout a CBDC. Their failing infrastructure, such as the caracas dam which once supplied free electricity that venezuelans used to mine bitcoin appears to have fallen into disrepair. With no real campaign or movement devoted towards improving matters. A venezuelan CBDC rollout would require additional infrastructure and support which venezuela appears unable to supply or maintain.

If venezuela was serious about improving their economy, they would focus on crude production and refinement. To create jobs and give the local economy a big push.

[Sithara007]

Cubans were recently revolting against the government in cuba. Venezuela and north korea may try to improve economic conditions for citizens, to prevent them from revolting as well.

Venezuela was once one of the wealthiest nations in south america. In the present day I do not believe they have the start up capital or technical sophistication to rollout a CBDC. Their failing infrastructure, such as the caracas dam which once supplied free electricity that venezuelans used to mine bitcoin appears to have fallen into disrepair. With no real campaign or movement devoted towards improving matters. A venezuelan CBDC rollout would require additional infrastructure and support which venezuela appears unable to supply or maintain.

If venezuela was serious about improving their economy, they would focus on crude production and refinement. To create jobs and give the local economy a big push.

The Venezuelan CBDC was rolled out in 2018 (₽, Petro). On paper, it was claimed that the value of 1 Petro is equal to the price of 1 barrel of crude oil. But the Venezuelan government failed to show how the prices can be linked to the crude prices and very soon this coin became defunct. The Washington Post called Petro as the "most obviously horrible investment ever", and this can be said about most of the other CBDCs as well. In the end, Petro turned out to be just another sham from the Venezuelan regime.

[bitmover]

As a continuation of the previous thread: Enjoy comunism: Venezuela raises monthly minimum wage to $2.40 today we can continue to see that because communists consider wealth as a cake, rather than as something dynamic that you can create, what they end up doing is distributing misery with simplistic measures:

The Central Bank of Venezuela will launch a CBDC in October alongside a monetary redenomination that will cut six zeros from the currency due to raging inflation.
...
This the second time in three years that Venezuela has readjusted the bolivar after Maduro cut five zeros from the currency in 2018 as inflation hit its peak of 1.8 million percent. In 2020, the annual inflation rate was estimated to be around 2,300%.

Luis Vicente Leon, economist and president of Caracas-based Datanalisis, criticized the move, telling Bloomberg on Aug. 5 that another redenomination of the currency will do nothing to address the underlying issues that are debasing its value:

“Removing those zeros does not solve, at all, the reason that originated the problem. Without resolving the root of the issue, we will have the same problem in months.”

source: https://cointelegraph.com/news/venezuela-to-launch-cbdc-in-october-and-cut-six-zeros-from-its-currency

Removing zeroes is a common "solution" for latin america countries

We lived that in Brazil when I was a kid. I will show you some pictures:


Do you see the value of 100000 in the banknote? You can also see the stamp of 100. The government just cut off 3 zeroes from our money in the 80s and 90s

One more example here. Original 10000 banknote became 10:


Brazil managed to take care of the inflation later on after a few decades... if we only had bitcoin back then, certainly a lot of people would have a better life here.

[Vishnu.Reang]

Brazil managed to take care of the inflation later on after a few decades... if we only had bitcoin back then, certainly a lot of people would have a better life here.

Inflation is a big issue all over Latin America. Apart from Venezuela, Argentina is one country that was very famous for hyperinflation until recently. Actually this is a problem with all the economies, which are overdependent on any one sector. In case of Brazil, the dependence is on agrobusiness and whenever the ethanol or soya prices drop, it puts the economy under enormous pressure. Same was seen in Russia recently. Their economy is overdependent on oil, and RUR lost almost 60% of its value when crude prices plummeted.

[stompix]

Another country Zimbabwe is also facing same issues but communism has never taken a step in that country.

Let's see
- an armed paramilitary group with help of NK and other Communist countries soldiers takes control
- a president dictator  for 30 years with clear marxist Leninist doctrine
- a party that identifies itself as socialist
- confiscation of land, house and businesses
- redistribution of wealth to the "workers" and the "poor"
 30 years later
-famine and poverty all over

If this ain't communism then what happened in the USSR is not communism either.

[bryant.coleman]

Another country Zimbabwe is also facing same issues but communism has never taken a step in that country.

Let's see
- an armed paramilitary group with help of NK and other Communist countries soldiers takes control
- a president dictator  for 30 years with clear marxist Leninist doctrine
- a party that identifies itself as socialist
- confiscation of land, house and businesses
- redistribution of wealth to the "workers" and the "poor"
 30 years later
-famine and poverty all over

If this ain't communism then what happened in the USSR is not communism either.  

Robert Mugabe allied with the Soviet bloc during the cold war. And ironically this meant that even the left-wing US politicians had to support minority white governments in the three southern African nations (Zimbabwe, South Africa and Namibia). Botswana, Swaziland and Lesotho were like buffer states under the influence of South Africa, while the other two countries (Mozambique, Angola) had communist regimes in power and the rebels (UNITA/RENAMO) were supported by South Africa and the NATO bloc nations.

[Poker Player]

Do you see the value of 100000 in the banknote? You can also see the stamp of 100. The government just cut off 3 zeroes from our money in the 80s and 90s

One more example here. Original 10000 banknote became 10:


Brazil managed to take care of the inflation later on after a few decades... if we only had bitcoin back then, certainly a lot of people would have a better life here.

Inflation is a big issue all over Latin America. Apart from Venezuela, Argentina is one country that was very famous for hyperinflation until recently.

My use of the term "communism" is perhaps a bit broad. In general I mean:

fillippone has found pretty much the best way to express it in words.

Let's put this way:

Enjoying power groups interfering indebtedly with free markets.

When they do this by design, as in communism, or by "accident" (let's be gentle and put it this way") as in broken democracies, this is recipe for disaster.

Countries that end up in hyperinflation are not typically countries with low taxes, low regulations, ease of business creation, etc. They tend to be the opposite, countries with a lot of intervention in the economy, with rampant and growing public spending, in a headlong rush that stifles private initiative as the engine of economic activity. In general, I would call the latter "communist", although some of them, if we are to speak precisely, are not technically so.

[Argoo]

I do not think that the issue is related to communism, because there are many economically successful communist regimes, but the issue is related to mismanagement, corruption and the failed government that did not succeed in solving the basic economic problems and instead resorts to temporary solutions instead of searching for a solution to the problem from its roots.
Removing 6 zeros from the currency is a ridiculous game that will not solve the intractable economic problems in Venezuela. It is already a farce. Inflation will continue because they pump more worthless paper currency and they think that this will solve the problem, but the truth is that this will complicate the problem so that it becomes impossible to solve and the economy collapses .

Now there are no purely socialist or communist states as they were before. Venezuela is now just an economically backward state. Of course, removing the six zeros on your bolivar banknotes is necessary at least to simplify the calculations. However, this will absolutely not affect the economic state of the country. Here we need to systematically raise the economy. Changing money to circulate for euro, pound or bitcoin will hardly give anything if there is no economic growth.

[Kyraishi]

This gives the impression of "we have an economic crisis, still instead of doing anything productive to solve it, we are simply going to cover our eyes and ignore the root problem". Indeed, what exactly are they trying to achieve by cutting the 6 zeros?

The only reason that I can think of is to psychologically comfort the citizens that there is no inflation problem, and that everything is in order.

Hopefully the citizens do wake up to this ploy and realise that they are getting duped still. But it's encouraging that a lot of Venezuelans are turning to decentralised cryptos already.

[Sithara007]

Now there are no purely socialist or communist states as they were before. Venezuela is now just an economically backward state. Of course, removing the six zeros on your bolivar banknotes is necessary at least to simplify the calculations. However, this will absolutely not affect the economic state of the country. Here we need to systematically raise the economy. Changing money to circulate for euro, pound or bitcoin will hardly give anything if there is no economic growth.

Don't try to defend something that can never be defended. Pure socialist/communist states do exist, and examples are Venezuela, Cuba and North Korea. Venezuela was a relatively prosperous country, before the socialists came to power in 1999. Venezuela was not economically backward, at least when compared to its neighbors. When Hugo Chavez came to power in 1999, he nationalized almost all the businesses and the economy collapsed as a result. It will take many decades for them to recover, even if they go back to capitalism.

[Xinarae*]

The Venezuelan government is studying the mathematical renaming of its currency the sovereign bolivar to make it easier for large corporations to pay. This redirection will reduce to six zeros, making it easier to calculate payments that have now reached higher levels although no official announcement has been made yet. Economically they are very weak venezuela's problem is no longer a matter of their internal politics this crisis has now become a threat to peace on the whole continent this will take time to change.

[SquallLeonhart]

The bad part of the situation in Venezuela does not seem to have a solution in the short term. It does not appear that Biden is willing to invade the country. Not for a humanitarian issue and not for oil. And the little opposition left in the country is too weakened by hunger to mount a revolution. .

That’s really bad, their government keeps making everything worse for the people in that country. Most of the times the problem that a country is having can be caused by the leaders. Although I do know some people may doubt this and maybe find other irrelevant opinions to point at as the cause of their problems, but I do say it starts with the government. Most of those in power are usually corrupt and due to it, it affects the country because of how these corrupt leaders runs it. And it’s very bad when there is no one that can stand against them and speak for the people, they always have to do whatever these bad leaders say. If the government is fixed, then they can fix their economy.

[LUCKMCFLY]

The elimination of the zeros is something that no longer makes sense, at an economic level in a country with a "normal" economy it is equivalent to valuing its currency, its value, but in Venezuela no, in Venezuela removing the 6 zeros is so that the amounts can fit in a document, be it a purchase or a sale, because in the same way the zeros will begin to appear on the right and very quickly.

This will not improve inflation, this will bring comfort to handle figures, in Venezuela what is handled is the dollar or any foreign currency, be it EURO, Colombian pesos, among others, the problem will continue. The communism of Venezuela is the one that really ended everything, and they are exploiting gold reserves, the debt that it maintains with China, Russia practically gave those lands to those countries so that they would exploit it and from there the payment would come out, what happens is that that does not appear in the news, because it is what is really happening, so removing the zeros, it really is nothing, the economic situation has no solution, unless all the rulers leave and that is something impossible, at less so now.

[Sithara007]

The Venezuelan government is studying the mathematical renaming of its currency the sovereign bolivar to make it easier for large corporations to pay. This redirection will reduce to six zeros, making it easier to calculate payments that have now reached higher levels although no official announcement has been made yet. Economically they are very weak venezuela's problem is no longer a matter of their internal politics this crisis has now become a threat to peace on the whole continent this will take time to change.

Removing zeroes will not work, as it was tried manytimes before. The original Venezuelan Bolivar was introduced in 1879. The first time they did redenomination was in 2008, when Bolívar Fuerte replaced the original Bolivar at a rate of 1 to 1000. Then in 2018, Bolívar Soberano replaced Bolívar Fuerte at a rate of 1 to 100,000. The government needs to understand that by removing zeroes, they can't control the inflation rate. I am glad that in my country we have a sensible government, at least in this regard.

[Poker Player]

Bump.

I am going to update this thread, so that it is not forgotten, because a parallel thread has appeared wanting to deny the obvious, and saying that hyperinflation in Venezuela has nothing to do with Communism.

This is obviously affirmed by a communist CM and has nothing to do with reality, since hyperinflation is characteristic of communist countries:

Hyperinflation in early Soviet Russia

The Soviet Hyperinflation: Its Origins and Impact throughout the Former Republics

The (attempted) price control, which has been repeatedly proven historically to be a disaster since the Edict of Diocletian.

The central planning of the economy that is a disaster from which the saying came out: "They pretend to pay us, we pretend to work"

Let it not be forgotten that the Venezuelan regime is communist, no matter how much they want to deny it:

"In more recent times a Bolivarian communism has developed in Latin America supported by the old communist dictatorship of Cuba. The greatest exponent has been Venezuela's Chavez and Maduro, a tyranny admired by Leninist-Communist Spanish party Podemos, that in just twenty years has completely destroyed a rich country, which owns the largest oil reserves on the planet (larger than Saudi Arabia!), making 15% of its population flee into exile and provoking the same result Communism has always had: repression, torture, enormous corruption,
destruction of freedom and death; hunger and misery for the people and luxury for its leaders."

Source: The massive failure of Communism

It is also worth quoting the principle, which is a good summary:

"I keep engraved in my memory memories of my trip to the Soviet Union in 1983: the fear of the people, the oppressive police presence, the empty shelves in the shops, the desperate black street market and the central lanes of some Moscow avenues reserved for the ZiL limousines of the leaders of the Communist Party. I also remember the fall of the Iron Curtain a few years later and the indelible images of a family fleeing from East Germany and coming out of their ramshackle Trabant car, just across the border from Czechoslovakia, to embrace each other in tears celebrating their recovered freedom.
 
In the long history of humanity there has never been an ideology more tyrannical or more criminal than Communism, which imprisoned a billion people in its own countries and murdered more than 100 million human beings, five times more than Hitler's and his National Socialism's horrible genocide (Rummel, 1987; Courtois et al, 1997). In absolute terms most of the Communist murders were committed by Lenin and Stalin in the Soviet Union and Mao in China. In relative terms the greatest communist atrocity corresponds to the Khmer Rouge in Cambodia, who executed a quarter of their country's population (two million people). In fact, after a century of communist experiments in dozens of countries on four continents we do not find a single example, not one, in which communism has not been synonymous with the destruction of freedom, repression, torture and death, corruption, poverty for the people and luxurious lifestyles for the Party's leaders. Communism was so hellish that the Communist states had to erect walls and wire fences at the borders not to prevent foreigners from entering, but to prevent their own citizens from leaving, eager to flee. It was the first time in
history that borders became the walls of a prison for the citizens of the country."

So that it is not forgotten.

[dkbit98]

Removing zeroes is a common "solution" for latin america countries

This is the ''solution'' they use in all countries with hyperinflation, and you can find similar example in ex Yugoslavia who in 1992, 1993 and 1994 had paper bills with up to eleven zeros, 10 billion 50 billion and even 500 billion, than they cut zeroes and printed new bills in next few years.
Below is posted one of them that is more famous with face of Nikola Tesla, that can be purchased online even today as collectibles item.
In years after that they printed bunch of paper bills reducing zeros every time, and there was no Bitcoin or other alternative for people at that time.
This was one more example of what communism and socialism results are.


Vice article talking about country with world's poorest billionaires