Enjoy communism (II): Venezuela to cut 6 zeros from its currency - page 4.

fillippone

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

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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.

The title may be misleading.
In my country the "raging inflation" has started after "communism has died and got replaced by democracy"(*).

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.

Ucy

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Things are designed for us to be productive. If you are not productive and solving very useful problems, then don't eat... If you eat without contributing anything, price will definitely rise because there will more demand (and less supply/production), and you are adding to the demand . Some think poor productivity can be solved by involving/enslaving robots to do the job for us... That can't happen without serious consequences.

So, we need to work really hard to produce more so that there will be enough to drive down prices of things and increase the value of our currencies.

Obito

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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.

If everything is state owned, how can it exactly inflate though especially if they have a lot of resources and they don't rely too much on exports? Of course the value of goods increases overtime, I mean that's normal for any economy that has money in it's circulation. If they move to bitcoin, they won't have any control over their people that's why they pursue CBDC.

Findingnemo

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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.

Rainbow-queen

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Venezuela is a famous energy country, and its oil reserves rank first in the world.

However, the Venezuelan government puts its own economy on oil, and a series of events triggered by the plunge in oil prices eventually became the fuse for Venezuelan inflation. At present. , Venezuela’s inflation is very serious, and the main reasons for its increasing inflation are: the government's excessive dependence on the oil economy, the implementation of foreign exchange controls, the government’s excessive currency issuance, and the influence of international factors.

The government’s corruption and incompetence and wrong economic policies make The Venezuelan economy collapsed.

The best way to deal with inflation is to control the money supply, and this is what Bitcoin can do.

NeuroticFish

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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.

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

)

(*) Clarification needed:
Although officially communism has died here (together with Ceausescu), unofficially it still lives even after 30+ years. The democracy is still unbelievably fragile because the important people from the old regime or their descendants are infiltrated directly or indirectly in all the levels of power, from parts and parliament to intelligence and justice, also obviously media and businesses. So yeah, between 1989 and 2005 the democracy was only on paper, the economy was ~~struggling~~ collapsing and so on. Bad times. And in 2005 we got 4 zeros removed from our currency.

Poker Player

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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:

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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. .

Topic: Enjoy communism (II): Venezuela to cut 6 zeros from its currency - page 4. (Read 532 times)