Pardon the mess, I was in a hurry so I laid them in such a way that it would make it easy for the viewer to count and notice the sheer amount of bills in there as fast as I could. If memory does not fail what you're seeing is close to 800.000 Venezuelan Bolívares, maybe a bit more. A stack that once put all together would look like a brick of some 2 inches thick - not small by any means. All of these bills have been recently added to the economy, and they're special for several reasons, including: They represent the government not being able to hide the sheer volume of the hyperinflation. Before them the biggest bill was 100 Bolívares, which made paying for things a difficult task considering everything costs thousands. From that bill the bubble grew so big that they had no choice but to finally print all these, from 1.000 to, as you can see, to 100.000 Bolívares. That’s going from 100 to 100.000, immediately. The gap is huge, and even these new bills don't cut it, and we'll talk why in a bit. These bills are hard to find. The problem is too complex to explain with just one bullet point, but know that cash is scarce in Venezuela, so that makes these bills hard to come by. Money is smuggled to Colombia where brokers pay more than it's worth with electronic transactions for reasons nobody really understands, and this added to the fact credit cards and debit cards are hard to use these days has turned cash into a precious product. That stack of money represents about one minimum wage in Venezuela at the time of this picture, which could have been a month ago or so. I've been told as of today the minimum wage was ~1.200.000 Bolívares, so understand the point but take this info cautiously as numbers are so volatile there. That stack of money contained not one, but three bills of 100.000 Bolívares which by the aforementioned points represent the biggest bill today, and also a gigantic (and instantaneous) leap from the previous one; 100 Bolívares. Yet, three of them plus an obnoxious amount of other not-so-small new bills barely made it to one minimum wage. I think this goes to show just how complicated handling money is. So at this you must be wondering; “Ok, what do all of those bills amount to in a currency I can understand?”. Very well, let's go with US dollars: They say an image says more than a thousand words, but how about 215.000? At the time this picture was taken, a month or so ago, 215.000 Bolívares were equivalent to 1 US dollar. The price has since gone up. The Venezuelan government doesn't recognize Dolar Today as an official source of foreign currency exchange rate… but the economy and Venezuelans do, ironic. If you'd like to be up to date about black market exchange rates visit DolarToday | Noticias de Venezuela y Dolar paralelo. In doing so you'll be flipping your finger at Maduro, so yay for that. Now, with those numbers in mind you'll be asking yourself then, how much is a Venezuelan minimum wage in hard currency? Around 3,50 US dollars, when I took this picture. Please, do notice the two 25 cents by the bills. At this point I would expect to have made things very evident: $3,50 amount to a two-inch thick stack of Venezuelan money, which includes big bills, which represent an entire month's work. And this is the least of our problems. I bet you think this was the end of it, right? There's never an end to it… You must be wondering what could be worse than scarce cash and $3,50 a month? Well, no body is doing anything to stop it, evidently, and they managed to find a way to ratify it and make it worse. Because see, there's one thing I didn't mention earlier, and that is hyperinflation on steroids. It's the how and how fast we got here. Originally there were the first Bolívares which we used from around 1940 until the late 1980’s. They ranged from 1 Bolivar to 100 Bolívares. As economic hardships hit Venezuela during the 80’s inflation grew and inevitably devalued the currency, so some of these early bills fell out of use, and extensions were added to make up for the bigger amounts. This is where the 1.000, 2.000, 5.000, 10.000 and 20.000 Bolívares bills come into play during my childhood. These were the bills I grew up with, and they were worth something, for a change. When I was a child I was given 1.000 Bolívares to go to school to have lunch or a snack. My mother realized it was so much money that she cut it in half and made it 500 Bolívares instead. I was still loaded. When Chavez came to power the economy quickly deteriorated, and inflation started soaring again. Within a few years 500 Bolívares wasn't enough to get food at school, but 1.000 were needed, then 2.000, then 5.000. At some point during ‘04, maybe ‘05 we started hearing rumors about a new currency, and that involved removing three zeros from all transactions, prices and bills. In this way 1.000 Bolívares would become 1 Bolivar [Fuerte], 2.000 would become 2 Bolívares [Fuertes], 10.000 would be 10 Bolívares [Fuertes], and so on and so forth. These became a reality around '08, and they became the bills Venezuelans have come to use for the last 10 years, and of which I've spoken in the early paragraphs. 100 Bolívares [Fuertes] was the biggest bill, and it would remain so for almost a decade even though inflation has gone into the thousand percentage, and the price of a US dollar went from 6.3 Bolívares [Fuertes] to 215.000 Bolívares [Fuertes] at the time of these pictures, and probably higher now. A few months back the government added the extensions of which I've spoken; those “new” bills you saw in the pictures. Inflation became so high and the need for bills such that they had no alternative but to go again into the thousands, as it once was during my childhood, before three zeros were omitted. So what could the Chavist Regime do now that would make this already collapsing economy worse? Who knows. But what they've chosen to do this time around is proof that we're screwed beyond saving. If you've paid attention you should have noticed that numbers in the Venezuelan economy have grown humongously, and others have been artificially shrunk. It happened once already with the Bolivar Fuerte, and with its extension. The Chavist Regime has now chosen to -again- dispose of three zeros. A new currency will be introduced soon, the Bolivar Soberano, which translates to Sovereign Bolivar. The irony is baffling… This “new, new” currency is proof that the inflation has gone hyper, and then started doing horse steroids, and I'll show you why later. It's also proof that the regime has lost absolutely all control of it; as they were faced with the alternative, which would have been a society where people would carry 100 pounds worth of cash (comparatively small bills) to pay for a deficient trip to the store. And last, it's also proof that Venezuelans have lost all freedom and whatever remaining power they could have had - the decision to yet again switch to a new currency was taken arbitrarily by Maduro and his con men with no checks and balances, that's not supposed to happen in a real democracy. Only in a dictatorship where all the power is in the hands of a few can such a drastic change such as this one be adopted with the lightness and easiness with which one decides to switch cable provider. With the Bolivar Soberano three zeros will be discarded, so that the huge new 100.000 Bolívares [Fuertes] will become 100 Bolívares [Soberanos]. A few other bills will be cleverly added, such as the 500 Bolívares [Soberanos] -The equivalent of 500.000 Bolívares [Fuertes]- and this will serve the purpose of allowing them to print more and more money under the disguise of small numbers, and without having to openly admit inflation is eating us alive. It will make it seem like inflation has been tackled, when in reality it's only been fed more fuel. 500 certainly sounds a lot easier to handle and a lot less dangerous than 500.000, wouldn't you agree? To the -added- disgrace of Venezuelans, not even this artificially adjusted currency will be enough to tackle the incredible trouble it is to do the simplest of things like finding cash, for instance. As of right now 1 kilogram of cheese costs over 700.000 Bolívares… if you think about it, the future “new new” biggest bill won't be enough to pay for that. While I browsed the internet I found a picture that perfectly describes this insane and infructuous change in currency, but it happens to be in Spanish. Nevertheless, I think numbers talk for themselves: -Original currency since 1940 -Extension, year 1991 -Converting (new bills), year 2007 -Extension, year 2016 -Converting (new bills), year 2018 -Old 500.000.000 Bolívares I don't know who the author is, but credit goes to him/her, whoever that may be. Evidently 500 (old) Bolívares aren't worth the same as as 500 Bolívares Soberanos, but it goes to show that even after doing away with three zeros -twice- we're back on the same numbers. That's some serious math right there. Now, I bet you're think “this is it, right?”. Not really. But my point has been made, everything from this point on is speculation. Presumably you're aware of just how cheap gasoline is in Venezuela. It's a huge problem that we've been dragging since the 90’s, but considering how the simplest of products cost thousands while gasoline remains frozen you'll understand how this has become ingrained is the economy, dirt-cheap gas, that is. The price of gasoline has led some of the biggest protests that democratic Venezuela ever saw. As it has remained artificially cheap it has also become something everyone has come to depend on, and it is a major factor in dictating prices in the country. Back in the day gasoline went up, and the next day prices could dramatically increase. Now, a gallon of gasoline is Venezuela goes for about 22,71 Bolívares, or 6 Bolívares pero litter (95 Octanes), if my estimates don't fail, and I don't think they do. No, it isn't a typo, and No, I'm not missing zeros. That means less than 200 Bolívares will fill most tanks, but buy a pound of cheese and it will cost you 350.000 Bolívares. That is 0,000096 US dollars per gallon. Here comes the problem, in my opinion: removing three zeros from 350.000 leaves it at 350 Bolivares. Now removing three zeros from 22.71 leaves at…0,02271 Bolívares Soberanos, or less than a 1 cent [per litter]. How are people going to pay for this if the physical currency won't even exist? There are only two options: A slight increase to round it to 1 cent, which would represent a ~2 time increase in price. Factor the fact that Venezuelans don't use gallons, but litters, then you would have to make 1 litter be worth at least 1 cent so people can actually pay for it. The government won't do anything at all, and gasoline will continue to cost 22.71 Bolívares per gallon (6 per litter) in a world where a pound of cheese costs now 350 Bolívares. This would allow the regime to do what they've feared for so long; increase gas prices to the real international pricetag in such a way that will make it seem justified. This will represent a gigantic leap, percentage-wise. Realistically gas will go up, no matter what, and whatever the number it will represent a huge increase that will impact the already dying economy, whether that's 2 times or 1.000. At the end of the day this new currency is a disguise, so it wouldn't surprise me if they used it to keep exploiting people.
On the contrary, I think the fear of depression would be greater than the fear of hyperinflation. With the rise of AI, everything will become automated, driving prices lower, but this will most likely have a seismic impact on consumer spending.
In modern times? People will use paper money instead of wood to be burned in the fireplace. And for some Eastern cultures, people will burn real paper money instead of ghost hell paper money to chase away the ghost.
Analogy drawn between the very popular Julius Caesar (who was usurping the power structure in Rome) with Donald Trump (versus the Uniparty in Washington). An Interesting read if you like history: And maybe timely today, with oil in bullish breakout. "A nation dragged across the Rubicon" By Glenn Spitzer
Who benefits? No F/n-body benefits.... at least not financially*. Asset price will soar in nominal terms, but when adjusted for currency devaluation... EVERYBODY LOSES. Those with "lots" lose a lot also but end up with more because they started with more. RE: Weimar Germany... Zimbabwe, Venezuela today, Turkey and Argentina multiple times... historically 100s of examples. The LAST thing any trader should want if for the markets to soar because of high-hyper inflation... it means bankruptcy for nearly everybody!! *In the end, "whatever is left" is concentrated in the hands of the few... mostly power-hungry and greedy politicians. Referencing from memory... you can look it up if you want more precision and detail... but I point to Turkey, 1982-2005. Their stock market soared >$2,000,000%! But with the coming currency devaluation... even those who were onboard the stock market for the entire run-up... those who made $2Million Percent on their stock investments... still lost 98% of their buying power in the revaluation of the Turkish Lira. (A cup of coffee cost $3 Million Lira in the old currency... but $3 Lira in the "rest currency".. a 1,000,000:1 devaluation.) How wealthy would you feel if your assets were devalued to be 1/Million-th of its former value and buying power?
There's currently close to zero (let's say <5%) chance of the US experiencing hyperinflation in the next 10 years. The economy is too big, diversified, and productive, and institutional safeguards against it are too strong. To achieve actual hyperinflation takes quite a bit of work, usually a combination of: massive government spending and deficits; a weak starting economy; major structural problems e.g. lots of zombie/state-owned firms, overmighty unions creating a wage-price spiral, heavy dependance on foreign capital or critical imports, reliance on volatile commodity revenues with no shock absorbers; and then finally some kind of supply-side shock catalyst to set off the crisis. Just creating lots of bank reserves and keeping interest rates low, as Japan and the USA have done in recent decades, isn't enough. That say, an elevated 'new normal' of say 4-10% inflation, maybe averaging 5% over the decade is certainly possible.
Prolonged high inflation is like a cancer... one that kills almost everybody... just takes a little longer than hyper-inflation. It's to be avoided at all costs. (It's NOT OK if inflation is "only" 4-10%/yr!)