Today's bomb shell is the demonetization of the 100 tender in Venezuela. Why, oh why?
The governor of Aragua, famed drug trafficker suspect cum links to Hezbollah and what not says it is a conspiracy from the US treasury to steal all of our 100 Bs, bills to provoke economic chaos.
Presidente @NicolasMaduro denuncia operación mafiosa dirigida por el departamento del tesoro de EEUU para robarnos los billetes de 100bs.— Tareck El Aissami (@TareckPSUV) 11 de diciembre de 2016
I, for one, think that the US has much easier ways to achieve this. Actually, the US does not need to do anything, just sitting and watching is enough to implode the regime.
This being said, it is quite possible that there are hoards of 100 bills here and there. After all, not all drug traffic receipts can be stored in USD crisp greenbacks. Black market also takes its share of the 100 notes. But in both cases any hoarding is temporal: drug traffickers, black marketers and Colombian mafias are business people, admittedly in their own sick way. For them it makes no sense to hoard a currency that loses a couple of % value points A DAY!
And then there is that:
Remember the $100s of millions #Venezuela spent importing 100-bolo bills? They're all being taken outa circulation. https://t.co/0p1Ji4xUHp— Kejal પ્રવીણ Vyas (@kejalvyas) 11 de diciembre de 2016
With the amounts of bills the regime has printed how many tons of paper money do you need to hoard to shoot a hit at the Venezuelan economy? Corruption and mafia traffic cannot be an excuse. Unless.... this is being used for some inside chavismo to hit others inside chavismo since chavismo is by itself now no more than a mafia.
Since there is no logical explanation and that the truth will eventually emerge, let's focus on the consequences, dires according to serious economists already on record.
As of tomorrow and as long as the replacing currency is not provided these are the things that will be very difficult to do, because there is not enough low denomination bills (2, 5, 10, 20 and 50 which itself is worth barely a penny) to pay for routine cash stuff. You will need to carry wads of bills, if you can find them, for the following:
- Gas for your car, newspaper, candies, anything that is not attached to a ATM or cash point or whatever accepts your debit card (never mind that these devices have been collapsing recently due to the lack of paper money, by the way).
- Services like the grocery bag boy, your cleaning lady, parking, small tips, etc. are not possible as of tomorrow. Note that the recipients of these cash payments are in the lower economical ranks of the population and are taking a direct hit in their ability to purchase their food....
- You cannot buy in the informal market food items that you cannot buy at the store because either it is out of such sundries, or you were at work and could not take the time for the 1 to 2 hours requirement of standing on line at the grocery store. "bachaqueros" or small time black marketeers sell for cash.
- Never mind that the re-sellers, who make a living out of it, will not be making a living. They will simply hoard whatever they have until the new banknotes arrive. More scarcity, and of course higher prices to compensate their losses when they start selling again.
- You cannot buy bread if you do not have an ATM card, for whatever reason you do not have it. Then again bread is getting scarce these days so the problem may actually be worse than the lack of cash.
- Some businesses will take a direct hit, the more so we are in the holidays season. Folks like the newsstand guy will see sales near zero for days.
- Whole classes of people will be affected and stand to lose money outright. The most vulnerable are retirees that only hold a savings account and who work on cash withdrawals from the bank. Many do not have or cannot operate or are afraid of debit cards that in some case only work for their bank ATM machines I understand (mine works for all but I understand that this is not the case for everyone).
- Never mind the ill informed that will not think about exchanging their 100 bills on time. Outright robbery by the state out of the most vulnerable people.
- Purchasing cheap medicine will become difficult for many people.
- Etc. you get the picture.
In short, the measure to suppress the 100 bill without a mechanism for speedy exchange in an impossible to fulfill timetable is, well, a truly inhumane measure, a gross attack on the human rights of the Venezuelan people. Of course, boligarchs may be somewhat inconvenienced but not affected. El Pueblo? Fuck El Pueblo!
Yours truly is not one for conspiracy theories, but I am starting to think that maybe the regime is seeding chaos on purpose. Let's count: the killing of the recall election, the killing of the dialogue, the inability to replenish shelves for the holiday season, the removal of cash from the hand of people, etc.... The combination of all of this is already turning the country into an administrative chaos. Can this be truly done on purpose? After all chaos is a good excuse for people not to talk about the real issues, and then if they do talk about that chaos may justify repression.