Enjoy communism (II): Venezuela to cut 6 zeros from its currency - page 3.

bitmover

legendary

Activity: 2352

Merit: 6089

bitcoindata.science

Quote from: Poker Player on August 05, 2021, 11:17:05 PM

As a continuation of the previous thread: Enjoy comunism: Venezuela raises monthly minimum wage to $2.40 today we can continue to see that because communists consider wealth as a cake, rather than as something dynamic that you can create, what they end up doing is distributing misery with simplistic measures:

Quote

The Central Bank of Venezuela will launch a CBDC in October alongside a monetary redenomination that will cut six zeros from the currency due to raging inflation.
...
This the second time in three years that Venezuela has readjusted the bolivar after Maduro cut five zeros from the currency in 2018 as inflation hit its peak of 1.8 million percent. In 2020, the annual inflation rate was estimated to be around 2,300%.

Luis Vicente Leon, economist and president of Caracas-based Datanalisis, criticized the move, telling Bloomberg on Aug. 5 that another redenomination of the currency will do nothing to address the underlying issues that are debasing its value:

“Removing those zeros does not solve, at all, the reason that originated the problem. Without resolving the root of the issue, we will have the same problem in months.”

source: https://cointelegraph.com/news/venezuela-to-launch-cbdc-in-october-and-cut-six-zeros-from-its-currency

Removing zeroes is a common "solution" for latin america countries

We lived that in Brazil when I was a kid. I will show you some pictures:

Do you see the value of 100000 in the banknote? You can also see the stamp of 100. The government just cut off 3 zeroes from our money in the 80s and 90s

One more example here. Original 10000 banknote became 10:

Brazil managed to take care of the inflation later on after a few decades... if we only had bitcoin back then, certainly a lot of people would have a better life here.

Sithara007

legendary

Activity: 3346

Merit: 1352

Leading Crypto Sports Betting & Casino Platform

Quote from: Hydrogen on August 08, 2021, 06:25:03 PM

Cubans were recently revolting against the government in cuba. Venezuela and north korea may try to improve economic conditions for citizens, to prevent them from revolting as well.

Venezuela was once one of the wealthiest nations in south america. In the present day I do not believe they have the start up capital or technical sophistication to rollout a CBDC. Their failing infrastructure, such as the caracas dam which once supplied free electricity that venezuelans used to mine bitcoin appears to have fallen into disrepair. With no real campaign or movement devoted towards improving matters. A venezuelan CBDC rollout would require additional infrastructure and support which venezuela appears unable to supply or maintain.

If venezuela was serious about improving their economy, they would focus on crude production and refinement. To create jobs and give the local economy a big push.

The Venezuelan CBDC was rolled out in 2018 (₽, Petro). On paper, it was claimed that the value of 1 Petro is equal to the price of 1 barrel of crude oil. But the Venezuelan government failed to show how the prices can be linked to the crude prices and very soon this coin became defunct. The Washington Post called Petro as the "most obviously horrible investment ever", and this can be said about most of the other CBDCs as well. In the end, Petro turned out to be just another sham from the Venezuelan regime.

Hydrogen

legendary

Activity: 2562

Merit: 1441

Cubans were recently revolting against the government in cuba. Venezuela and north korea may try to improve economic conditions for citizens, to prevent them from revolting as well.

Venezuela was once one of the wealthiest nations in south america. In the present day I do not believe they have the start up capital or technical sophistication to rollout a CBDC. Their failing infrastructure, such as the caracas dam which once supplied free electricity that venezuelans used to mine bitcoin appears to have fallen into disrepair. With no real campaign or movement devoted towards improving matters. A venezuelan CBDC rollout would require additional infrastructure and support which venezuela appears unable to supply or maintain.

If venezuela was serious about improving their economy, they would focus on crude production and refinement. To create jobs and give the local economy a big push.

dkbit98

legendary

Activity: 2212

Merit: 7064

Quote from: paxmao on August 06, 2021, 11:06:42 AM

Due some acquittances, I have quite decent information about what is up in Venezuela. One of the things that is happening is that obviously people are ignoring as much as possible the local currency. Whether bitcoin our USD, they are definitely not getting to use the local coin regularly. The main exception are employees with salaries denominated in bolivars, in which case they have to undertake extra activities to make sure they get to eat everyday or every other day anyway.

I heard that they have official and unofficial-real rate for exchanging their worthless bolivar paper money for other fiat currencies, but I bet there are many people on streets who are doing this exchanges just to survive.
It's crazy that something like this can happen to a country with such rich natural resources and position in world but greed and corruption knows no limits, and similar thing is not far away from US and other western countries.

Quote from: paxmao on August 06, 2021, 11:06:42 AM

The problem is that this country is going to swing from communist to a ferocious if not dictatorial regime which may solve some issues and create newer ones.

Isn't communism by it's definition already dictatorial system of governance, and we saw how that ended up in other countries.
China is moving to new age communism with complete totalitarian system of control, every segment of society is controlled and tracked, problem is that this ''virus'' is now spreading globally.

NeuroticFish

legendary

Activity: 3668

Merit: 6382

Looking for campaign manager? Contact icopress!

Quote from: Poker Player on August 07, 2021, 12:31:01 AM

Actually the post is a continuation of the other one, in which I think you also commented

I guessed that Wink

, but I am sure that you got my point. And yes, fillippone has found pretty much the best way to express it in words.

Poker Player

legendary

Activity: 1372

Merit: 2017

Quote from: NeuroticFish on August 06, 2021, 02:52:09 AM

The title may be misleading.
In my country the "raging inflation" has started after "communism has died and got replaced by democracy"(*).
After some years, when the inflation was not that bad any longer they've cut 4 zeros from our currency.

So it may not be related that much to communism. I don't want (by any mean) to say that communism would be good, just democracies, especially the not 100% working ones, should also be afraid of this kind of scenarios (unless using bitcoin, obviously Grin

)

Actually the post is a continuation of the other one, in which I think you also commented, and how communism ends up being a disaster, although it is very nice in theory, what I wanted to reflect are the consequences of applying it as it is. In the fall of the USSR there was also a hyperinflationary collapse, which is not to say that hyperinflationary scenarios are exclusive to communism. I think fillippone specifies it well:

Quote from: fillippone on August 06, 2021, 04:51:17 AM

Let's put this way:

Enjoying power groups interfering indebtedly with free markets.

When they do this by design, as in communism, or by "accident" (let's be gentle and put it this way") as in broken democracies, this is recipe for disaster.

I guess you know well what you are talking about, as I remember that Italy before joining the Euro was also famous for inflation.

Quote from: The Sceptical Chymist on August 06, 2021, 05:42:52 AM

Say what? Why would the US invade Venezuela? Why should we? I don't know about you or anyone else, but I'm tired of the US trying to be the world's moral police. We're in no position to do that anymore, if we ever were. Nor am I confident that the US could afford to render aid to Venezuela--we've got our own crises forming here, and it's going to get a hell of a lot worse before it gets better.

I mentioned that because in the previous thread it was said that the USA does not intervene in Cuba because there are only poor people there and they have nothing to take out, unlike Iraq where there was oil. If that is the reason, it is not understood why it does not invade Venezuela.

Quote from: stompix on August 06, 2021, 06:12:27 AM

Oh, common, the US has a lot of oil, it has thousands of wells that are stopped because there was simply no demand, there are enormous reserves, why would they invade a country to get the costliest oil in the world?

I didn't know that. But is it the hardest to extract because of the way it is managed in Venezuela or is there something in the reserves that makes it especially difficult to extract the oil?

Sithara007

legendary

Activity: 3346

Merit: 1352

Leading Crypto Sports Betting & Casino Platform

Quote from: Poker Player on August 05, 2021, 11:17:05 PM

The bad part of the situation in Venezuela does not seem to have a solution in the short term. It does not appear that Biden is willing to invade the country. Not for a humanitarian issue and not for oil. And the little opposition left in the country is too weakened by hunger to mount a revolution. .

Biden will consider invasion once the oil prices are back to $120 per barrel level. At current prices, the oil deposits in Venezuela doesn't make much of a profit. But Biden/Kamala regime has been moving closer to Venezuela, in terms of economic policies. The first thing Biden did after coming to power was to increase the taxes, left, right and the center. And the second thing was to sabotage various shale oil and pipeline projects. This has ensured sky high profits for the OPEC and higher inflation levels in the United States. I hope Biden will soon be able to push crude oil to $100-$120 level. Then Kamala will congratulate him by saying "we did it Joe!".

yhiaali3

legendary

Activity: 1848

Merit: 1982

Fully Regulated Crypto Casino

I do not think that the issue is related to communism, because there are many economically successful communist regimes, but the issue is related to mismanagement, corruption and the failed government that did not succeed in solving the basic economic problems and instead resorts to temporary solutions instead of searching for a solution to the problem from its roots.
Removing 6 zeros from the currency is a ridiculous game that will not solve the intractable economic problems in Venezuela. It is already a farce. Inflation will continue because they pump more worthless paper currency and they think that this will solve the problem, but the truth is that this will complicate the problem so that it becomes impossible to solve and the economy collapses .

paxmao

legendary

Activity: 2366

Merit: 1624

Do not die for Putin

Quote from: Poker Player on August 05, 2021, 11:17:05 PM

As a continuation of the previous thread: Enjoy comunism: Venezuela raises monthly minimum wage to $2.40 today we can continue to see that because communists consider wealth as a cake, rather than as something dynamic that you can create, what they end up doing is distributing misery with simplistic measures:

Quote

The Central Bank of Venezuela will launch a CBDC in October alongside a monetary redenomination that will cut six zeros from the currency due to raging inflation.
...
This the second time in three years that Venezuela has readjusted the bolivar after Maduro cut five zeros from the currency in 2018 as inflation hit its peak of 1.8 million percent. In 2020, the annual inflation rate was estimated to be around 2,300%.

Luis Vicente Leon, economist and president of Caracas-based Datanalisis, criticized the move, telling Bloomberg on Aug. 5 that another redenomination of the currency will do nothing to address the underlying issues that are debasing its value:

“Removing those zeros does not solve, at all, the reason that originated the problem. Without resolving the root of the issue, we will have the same problem in months.”

source: https://cointelegraph.com/news/venezuela-to-launch-cbdc-in-october-and-cut-six-zeros-from-its-currency

The bad part of the situation in Venezuela does not seem to have a solution in the short term. It does not appear that Biden is willing to invade the country. Not for a humanitarian issue and not for oil. And the little opposition left in the country is too weakened by hunger to mount a revolution. .

Due some acquittances, I have quite decent information about what is up in Venezuela. One of the things that is happening is that obviously people are ignoring as much as possible the local currency. Whether bitcoin our USD, they are definitely not getting to use the local coin regularly. The main exception are employees with salaries denominated in bolivars, in which case they have to undertake extra activities to make sure they get to eat everyday or every other day anyway.

The problem is that this country is going to swing from communist to a ferocious if not dictatorial regime which may solve some issues and create newer ones.

Darker45

legendary

Activity: 2576

Merit: 1860

With all of what Venezuela has gone through for the past several years, Maduro and his economic team should have already learned a lot of lessons. But it seems they haven't. On the contrary, things seem to become worse. In 2018, Maduro only cut 5 zeros. In 2021, instead of improving, they're now cutting 6 zeros.

It looks as if they miss the whole point. Cutting zeros won't improve the economy. Even shifting to the use of cryptocurrency won't matter much to their crumbling economy. They failed with Petro; there's not enough reason why they won't with a CBDC or a digital bolivar.

Modernizing the monetary system by going digital does not actually revitalize the economy. As a matter of fact, it might only make things worse. Hyperinflation is not addressed by shifting into mobile banking and online payment system. In the first place, substituting hard cash with CBDC is misplaced in a country where smart phone and internet penetrations are rather low. Internet services are not affordable either.

avikz

legendary

Activity: 3080

Merit: 1500

Lol! It seems op has issue with communism only, rather than the actual reasons of hyper inflation in Venezuela. The problem of Hyperinflation started since the current president came to the power in 2013. It took him only 3 years to push the country into Hyperinflation and he was forced to declare an emergency. I frankly don't see any hand of communism in here!

Communism actually ruined former Soviet union and currently ruining North Korea and China to some extent. Another country Zimbabwe is also facing same issues but communism has never taken a step in that country. So honestly I don't see how communism is ruining Venezuela. It's the democratic government that is ruining the country even after sitting on the biggest oil reserve in the whole world.

Leviathan.007

hero member

Activity: 1778

Merit: 722

Leading Crypto Sports Betting & Casino Platform

I know-how is the inflection rising on Venezuela and some people are even using money as a useless piece of paper, in order to buy a chicken to eat you have to pay too much money and some criminals kill people only for 100 bucks or even less. That's what's know from Venezuela, but removing 6 zeros and even 60 zeros won't change anything. So basically, if people were working for 1000000(1m) Bolivar per month and they had to pay 10000000(10m) for food, now they will work for 1 bolivar and they have to pay 10 Bolivar for food. Nothing changes and people's purchasing power is still the same and also the inflection is still rising. Their government just will pay too much funds and resources to print new money papers and this will make everything even worst for them.

dkbit98

legendary

Activity: 2212

Merit: 7064

There is a lot of communism and fascism today (that are not much different at all) even in so called democratic countries, and only difference is in stages.
When people realize they live in communism and dictatorial state it will be too late to change something and blood will be spilled already.
Cutting zeroes from their Venezuelan currency won't help them, and they can check history of all other countries that tried that strategy before, but imagine if they introduce Bitcoin as a legal tender (unlikely to ever happen).

magneto

hero member

Activity: 1666

Merit: 753

Are they delusional?

Removing zeroes does not cure the underlying economic malaise. The best it's going to do is make transacting a bit easier in day to day life, but that's pretty much it.

The same thing happened with Zimbabwe, they revalued their currency multiple times and caused absolutely no change in the fundamentals of their country's economy. Riduculous stuff if you ask me.

kryptqnick

legendary

Activity: 3248

Merit: 1402

Join the world-leading crypto sportsbook NOW!

I remember they already issued a crypto back in 2018 (petro coin). I couldn't even find it listed on coinmarketcap or coingecko, so I guess it went that badly. It didn't seem to help the country's economy in the slightest. After all, the GDP per capita is still dropping year after year, and it's hard to imagine a country that's in a worse state than Venezuela. Another crypto launch is definitely not going to cut it. What they need is a totally different government, a lot of help from other countries and readiness to fight corruption strongly.

Gozie51

hero member

Activity: 2660

Merit: 630

Vave.com - Crypto Casino

Quote from: Findingnemo on August 06, 2021, 03:25:01 AM

Inflation exists on both democratic and communist nations, and these hyper inflation happened due to the utter rate of corruption by the government and poor monetary policies, cutting down the zeros may not bring any effect in the valuation of their currency and introduction of CBDC also is similar to the shit as their fiat. Better if they move to a decentralized asset like bitcoin and accept it as legal tender.

Venezuela has to know that cutting down on zeros in there currency would not bring any positive change because that is not the solution. Venezuela is rich in oil just like Nigeria but these two countries are facing heavy corrupt practices. To leave corrupt ways is the solution and not CBDC but to fix corruption. Digital currency has no effect with Fiat and if officials have a way of being manipulative with it, the corruption will increase but I don't see digital currency having any major contribution to the GDP of a country but only for convenience of financial activities but no major effect to the economy.

NeuroticFish

legendary

Activity: 3668

Merit: 6382

Looking for campaign manager? Contact icopress!

Quote from: stompix on August 06, 2021, 06:12:27 AM

If you suffer from a disease for 30 years do you expect both the operation and the recuperation to be painless?
Every time somebody tells me how hard some countries are trying to narrow the gap to the western world and I look at the map I always have a feeling that the closer you were to Moscow the harder it gets. Hungary>Romania>Moldova>Belarus.

Well, after 40 years of disease and quite a surgery, I didn't expect that after more 30 years the healing is far from complete...
The map thing is a very good point though. Sadly.

Quote from: stompix on August 06, 2021, 06:12:27 AM

But, back to Venezuela, the first thing that popped into my mind was hearing about denomination, do they afford to print the new notes? Of course, it will be a lot cheaper due to the quantity but they will have to print all the notes, not just a new batch and with the coffers even "emptier" if that is even a word, who is going to do it for them at the risk of never getting paid?

And, what about the Petro???
The currency that could rival Bitcoin? Backed by true oil reserves?

While Venezuela should not spend extra money on printing new bills, it should not be a big problem, since most probably the process will take years and both currencies will go in parallel for quite a while. So they only have to print a little bit bigger batches, that's all. And Petro... well... LOL...

Quote from: stompix on August 06, 2021, 06:12:27 AM

Oh, common, the US has a lot of oil, it has thousands of wells that are stopped because there was simply no demand, there are enormous reserves

I tend to believe that they keep that oil for later deliberately. And not necessarily for cars and electricity. Keep in mind that half of the fibers in your clothes is probably coming from oil and gas.

stompix

legendary

Activity: 2912

Merit: 6403

Blackjack.fun

Quote from: Poker Player on August 05, 2021, 11:17:05 PM

The bad part of the situation in Venezuela does not seem to have a solution in the short term. It does not appear that Biden is willing to invade the country. Not for a humanitarian issue and not for oil.

Oh, common, the US has a lot of oil, it has thousands of wells that are stopped because there was simply no demand, there are enormous reserves, why would they invade a country to get the costliest oil in the world? And don't even mention Iraq, the largest fields there, as well as a lot of smaller ones, are usually explored by the Iraq government in partnership with China Petroleum.
The first deal Iraq signed after the fall of Saddam was with China, not the US.

Quote from: NeuroticFish on August 06, 2021, 02:52:09 AM

The title may be misleading.
In my country the "raging inflation" has started after "communism has died and got replaced by democracy"(*).
After some years, when the inflation was not that bad any longer they've cut 4 zeros from our currency.

If you suffer from a disease for 30 years do you expect both the operation and the recuperation to be painless?
Every time somebody tells me how hard some countries are trying to narrow the gap to the western world and I look at the map I always have a feeling that the closer you were to Moscow the harder it gets. Hungary>Romania>Moldova>Belarus.

But, back to Venezuela, the first thing that popped into my mind was hearing about denomination, do they afford to print the new notes? Of course, it will be a lot cheaper due to the quantity but they will have to print all the notes, not just a new batch and with the coffers even "emptier" if that is even a word, who is going to do it for them at the risk of never getting paid?

And, what about the Petro???
The currency that could rival Bitcoin? Backed by true oil reserves?

The Sceptical Chymist

legendary

Activity: 3528

Merit: 7005

Top Crypto Casino

I'm pretty sure the Venezuelan government knows cutting zeros from their currency isn't a fix for anything other than convenience, i.e, so that people don't have to cart around their cash in wheelbarrows. So that's kind of a stupid argument by the media, but not a surprising one, since the media is as bad or worse than any government known to man (in my very humble opinion).

Quote from: Poker Player on August 05, 2021, 11:17:05 PM

The bad part of the situation in Venezuela does not seem to have a solution in the short term.

The cutting of zeros is a short-term "solution", though it's just a Band Aid that doesn't treat the actual problem. I don't follow Venezuelan politics or even keep up to date on their pitiful situation, but I'd imagine that they'll eventually get help from another country in the form of a loan or some other deal--but that depends on who's in charge in Venezuela, and it doesn't appear that the current leadership is competent or willing to ask for help (or to work on a fix themselves).

Quote from: Poker Player on August 05, 2021, 11:17:05 PM

It does not appear that Biden is willing to invade the country.

Say what? Why would the US invade Venezuela? Why should we? I don't know about you or anyone else, but I'm tired of the US trying to be the world's moral police. We're in no position to do that anymore, if we ever were. Nor am I confident that the US could afford to render aid to Venezuela--we've got our own crises forming here, and it's going to get a hell of a lot worse before it gets better.

DrBeer

legendary

Activity: 3752

Merit: 1864

Show for narrow-minded people, nothing more ... Removed 6 zeros in order to get another 9 zeros ... Stupidity and nonsense, instead of real steps to diversify the economy and solve current problems. They still do not understand that living only on oil is stupid and risky, and freedom, legality, equality, high-quality interaction within the country and with external partners is the way to change the situation. True, now they will have to come to terms with the fact that it is always easier and faster to destroy than to create. That 1 year of destruction = 3 years of restoration, and the more years they destroy, the further away from them restoration and normal life will be. And "reducing" zeros is not a solution to problems, it is just a reduction in the number of zeros, nothing more!

Topic: Enjoy communism (II): Venezuela to cut 6 zeros from its currency - page 3. (Read 532 times)