Hasta el 2021!— daniel duquenal (@danielduquenal) 21 de noviembre de 2016
Chávez lo había prometido!
Cumplió! #DolarToday2021 @DolarToday pic.twitter.com/Es06uFZRy3
(word play on Chavez promising that his revolution would last with him at the helm until the year 2012, his version of the thousand years Reich).
Thy end neareth! Hear thee trumpets blaringth! Apocalypse cometh to thy stomach! pic.twitter.com/ZzPPqqgIX2— daniel duquenal (@danielduquenal) 30 de noviembre de 2016
The Venezuelan currency on the black market lost 50% of its value in not even ten days. Note that in October it was hovering at 1100 and this afternoon it has already crossed the 4200 barrier. Thus we can say that the depreciation over a month is around 75%. I do not think that historically Venezuela's currency has experienced such a drop in such a short time.
Economist will have all sorts of fancy explanations to give you. The regime will speak of a terrorist attack on Venezuela by the imperialism, refusing to consider that the Fidel Castro, finally croaked, model is the guilty party. What I am going to tell you is what this means at ground zero, the one of yours truly.
It means that with the hyperinflation setting in with our two paycheck combined we may not be able to cover food and medical expenses of my SO, even with insurance.
It means that assuming that I can find and purchase raw material to keep producing it would be so expensive to produce that no one will be able to afford me (or no one else for that matter).
It means that considering that national food is insufficient we will not be able to purchase imported food.
It means that come February, when the full effect of this is felt, I may be out of a job, out of food, out of medicine for the SO. And it will not be a question of price and money in the bank. Simply, the shelves will be barren.
Why o why?
Well, it all started when the regime decided to pass a national budget without approbation by the National Assembly. As expected, once creditors were told that nothing outside of a National Assembly vote would be recognized as debt, then loans stopped. Oil prices did not go up. Plus other well known factors of a dysfunctional economy. Conclusion? Bankruptcy and a dollar that goes from 1000 to a USD to 4000 in about a month time.
It is just that simple folks, truly. An absolute lack of confidence in the regime.
The worst thing of all is that there is little that can be done at this point, the damage is too deep. A mere relaxation on price controls or currency exchange will not do. We are like in Eastern Europe circa Berlin Wall collapse. The regime tried for so long to avoid an economy bang that it created the conditions for a nuclear economic bang. Now we need to do, SIMULTANEOUSLY, removing currency control, removing price controls, negotiate with the IMF some sort of bridge loan to help the poorest people to eat.
And all of this is only possible with a change of government. It is not even a matter of sharing responsibilities with the opposition, it is too late for that (and I have my doubts about the opposition wanting to reach office now, but that is matter for a future post).