The economy has gotten so bad in socialist-ruled Venezuela, that people are simply throwing their money away because it has become so worthless due to rampant inflation.
A column Wednesday in The Washington Post details the desperate conditions millions of Venezuelans face on a daily basis. Things are so bad, according to columnist and executive editor of the Caracas Chronicles Francisco Toro, that “small-denomination currency [is] now so worthless” that even “looters…[don’t] think [it is] worth their time to stop and pick them up” in garbage cans.
Each of 20-bolivar bills, according to analysts, is worth about $0.0001 at the current exchange rate, requiring Venezuelans to have 100 of the bills to even have a penny.
Of course, you wouldn’t know this from the government’s official exchange rate, which puts each of these bills at $2.
“Hyperinflation is disorienting. Five or six years ago, the 500 bolivars on the floor would’ve bought you a meal for two with wine at the best restaurant in Caracas,” wrote Toro. “As late as early last year, they would’ve bought you at least a cup of coffee. At the end of 2016, they still bought you a cup of café con leche, at least. Today, they buy you essentially nothing … well, except for 132 gallons of the world’s most extravagantly subsidized gasoline.”
Even if you’re lucky enough to grab a few hundred of those bills, don’t count on them keeping their value very long. “Prices [in Venezuela] are now rising more than 80 percent per month,” Toro wrote, meaning that “prices double every 34 days or so.”
Toro added:
Rule No. 1 of surviving hyperinflation is simple: Get rid of your money. Given the speed with which money is shedding its value, holding on to it means you’re losing out. The second you’re paid you run out as fast as you can to buy something – anything – while you can still afford it. It’s better to hold almost any asset than money, because assets hold their value and money doesn’t.
Find a can of tuna? Buy it. Even if you hate tuna. Even if you have no intention of eating tuna. You can always trade it for something else later. Tuna holds its value. Money doesn’t.
Unfortunately, barring an overthrow of President Nicolás Maduro’s government, don’t expect a change any time soon. The government, in fear of looking weak, barely even acknowledges its country’s crumbling economy.
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