Tuesday, July 24, 2007

Ripley's believe or not bad currencies

This short post courtesy of reader M.G.

Foreign Policy has a cute little article about the countries with the worst 5 currencies in the world today.

You have, for obvious reasons North Korea, with the quaint note that "The minor role played by money in the North Korean economy mitigates the effects of hyperinflation to some extent". Thanks for juche!

You have for even more obvious reason Somalia: "traders make up the rules and prices as they go along, and counterfeiting is rampant". What? They do also have buhoneros in Somalia and the locals make their own money?

Iraq I need not to comment on so we can move to the next one.

Zimbabwe where the editor added a proof reading note: "Editor's note: Zimbabwe's unofficial exchange rate is even higher than we originally thought, and it's changing by the minute"

And finally, yes, you guessed it, VENEZUELA!!!! Since it is a holiday and I am feeling kind of lazy I will lift up the whole paragraph on Venezuela. You will notice, if you are a long time reader of this blog (and Miguel or Quico) that there is nothing in it that you already did not know about the Venezuelan Bolivar, VEB.
With massive public spending fueling inflation and President Hugo Chávez’s nationalization campaign triggering a massive outflow of capital, it’s been a bad year for the bolívar. Thanks mainly to the high price of oil, many of Venezuela’s economic fundamentals look sound. But Venezuela’s currency has lost 21 percent of its value since January 2007, the worst performance of all 72 currencies tracked by Bloomberg News. Seeking to staunch the bleeding, Chávez has announced a bizarre series of measures, including imprisonment for those who violate price caps, removing three zeroes from the bolívar and renaming it the “strong bolívar” and—most bizarre of all—the reintroduction of 12.5-cent coin that Chávez promises will help whip inflation. When introducing the coin in March, he boasted, “We’re going to end monetary instability in Venezuela.”

-The end-

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