Wednesday, February 25, 2015

The bicentenial bolivar

On January 16 I wrote that the Bolivar at 175 for a single dollar may sound expensive but if the regime were not to take REAL measures (it has not) within weeks that 175 would be cheap. There it is today, the black market value has crossed the 200 line even though the SIMADI was claimed to be the way in which the regime would kill black market. This one, it seems, is alive and well.  Apparently no one inside the regime seems to understand that no matter what gimmicks they invent the value of a currency depends upon which solid currency it can rest (gold, dollars or euros, same difference). It does not rest on revolutionary "values". (note that even the limited cash exchange value at Cucuta, the one to avoid bank commissions and delays, is at 179 and thus higher than SIMADI!)

9 comments:

  1. The implicíto is unchanged at 90. This indicates to me that the M2 number is false (i.e., too low).

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    Replies
    1. M2 = La liquidez monetaria

      Delete
    2. Charles Lemos4:03 PM

      M1 is the amount of currency in supply. M2 is a broader value that includes M1 and other assets that are highly liquid but not actually cash such as gold, specie, time deposits, money market accounts, stock and mutual funds.

      Delete
    3. Anonymous12:37 PM

      I actually think perhaps the reserves number is off or is not as available.

      In particular, the definition was changed to include all sorts of other valuables like gems which may be less liquid. So there simply may not be the actual funds available to service the exchange needs (even legal) of the country. I'd be curious when the last time someone not connected even got the 6.3 rate etc... These seem all frozen up, or folks traveling, has that been sorted out yet? Even the marginal system will have some pressure because you can take 171 bolivers through marginal system -> USD, then take USD through parallel back to 200 bolivars so it's pure profit (but much smaller than the connected). This suggests that even marginal system may not be able to find enough dollars to meet demand - who wants to give up their dollars for 6.3 bolivars or even 171?

      Delete
  2. Charly2:37 PM

    Great victory for the Libertarian Movement at large. Rumbo a los cuatrocientos!

    ReplyDelete
  3. otro jamoncito mas 'pa los que esten pilas! chavismo con gusto pa los panas!

    ReplyDelete
    Replies
    1. Compro a 12 y vendo a 220: Fino!

      Delete
  4. Great blog, very informative, i must say these type of information may help people in such quiz sites a lot.

    ReplyDelete

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