schiffgold.com / BY SCHIFFGOLD / NOVEMBER 1, 2016
The people of Venezuela are currently suffering from triple-digit inflation and their bolívar fuerte (“strong bolívar”) currency isn’t worth 0.10 US cents at the moment, according to Bloomberg. As the country approaches hyperinflation levels, buying everyday items (when available) takes so many bank notes businesses have abandoned counting and starting weighing money instead. Boxes and bags of bills are becoming a nuisance to shop owners who have to find places to store the currency.
Venezuela’s real inflation rate is shrouded in mystery, given that the government rarely releases any official numbers. Some estimates have it between 200% to 1,500%.
The Venezuelan government is scrambling to find a practical solution, asking private currency companies to expedite orders for larger denominations before the Christmas season brings employee bonuses, ATM withdrawals, and increased commerce.
Exacerbating the situation is that 40% of Venezuelans have no bank accounts and a third of workers are paid in cash. With so much currency being stirred about the country, it would seem like getting cash would be fairly easy, but that’s not the situation. In fact, the Venezuela’s central bank released a study showing a decrease in overall ATMs available. The bank machines that once were stocked every few days are now being replenished with replacement bolívars every few hours to meet demand.