Topic: Report From Venezuela: An Inside Look At A Country In Free Fall - page 2. (Read 433 times)

This is good, widespread acceptance of sound money means the end of the hyperinflation is near.

It's technically correct that the driving forces behind hyperinflation are not to be found in the classical "socialism is evil an capitalism is good." A hyperinflation can occur in a capitalist nation or a totalitarian nation or a communist nation.

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In an effort to hold as few Bolívars as possible, citizens have resorted to trading with their compatriots with American or Colombian bank accounts via Facebook messenger, Instagram, or Whatsapp.

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I read the entire article and its very accurate. Americans are supposed to get a visa to enter now, which of course can't be obtained from within the USA anymore (it might be possible to obtain one from one of the Maduro's friendly countries, such as Bolivia).
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He explains how merchants are starting to accept any money, informally (probably illegally, but that's the norm here). Just today i saw an imported product with a sign: $20 (as in USD). A few days ago i asked the price of a repaired chair and the shop owner told me $30, he didn't even bothered mentioning bolivares at all.

Petro was a waste of money to anyone who invested in it, it doesn't work like a crypto at all and nobody wants them. Obviously Maduro isn't going to join Swift right when Visa and Mastercard are leaving. But in the end the Russians didn't want Petros but actual gold as payment... Petro is backed in a promise made by a "government" nobody believes in, no matter how "friendly" a foreign power might look...

Report From Venezuela: An Inside Look At A Country In Free Fall

Miguel Morel - Nicolás Maduro in Bolívars. Artwork by Cryptograffiti.

Venezuela is in a downward spiral. The Americans are involved. The Cubans are involved. The Russians are involved. Other countries you’ve probably never heard of are involved. The epistemic environment is poisoned by divergent geopolitical interests. Affairs in Venezuela are thus opaque.

American discourse on this issue unsurprisingly contextualizes the crisis in terms most relevant to domestic political battles, namely point-scoring in the tiresome capitalism vs. socialism ideological war. This is probably the least helpful framing for understanding what actually went wrong. And something has gone deeply wrong.

The only thing more interesting than analyzing a failed state from the comfort of one’s armchair is seeing it in person, so I packed my bags and bought a plane ticket to Latin America. The embassy wouldn’t give me a travel visa to Venezuela itself because I’m American, but many Venezuelans have fled to Colombia and Argentina. Everyone there has front row seats to the crisis, so I headed to Bogotá, the capital of Colombia. Conrad Weiss, a Palladium correspondent from Europe, didn’t even need a visa. He flew directly to Caracas.

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Venezuelan grocery stores and petrol stations are drained wholesale within hours of new shipments. The government chooses to highly subsidize certain goods such as food and oil, which is the reason this dynamic exists. Goods owned by the state are for everyone, according to Chavismo, and when your country is in a downward spiral, the entrepreneurial thing to do is take as much of the free food and oil as you can, throw it in the back of a truck, and transport it to the border.

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I said previously that the only feasible way for regular Venezuelans to leave the country is through the Cúcuta border. But there is another way, at least for mafiosos doing a lot of business. No vehicles are allowed to cross from Venezuela to Colombia, so the only way to move large amounts of supplies is through the jungle. The military has cut some ad-hoc pathways, but there’s a price. Smugglers have to give up 10–15% of their goods to the soldiers in exchange for their assistance.

Refugees don’t get the same deal from the Cúcuta border guards, probably because they’re not repeat customers.

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In an effort to hold as few Bolívars as possible, citizens have resorted to trading with their compatriots with American or Colombian bank accounts via Facebook messenger, Instagram, or Whatsapp.

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Taken together, one gets the impression of a militarily organized Venezuelan state with the capacity to mobilize large segments of the population. Maybe they can—but here’s the punchline: the Venezuelan Army itself only has 71,000 personnel.

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No one really uses straight cash at this point. Instead, they prefer bank wires. To acquire cash, you have to pay a premium because there’s basically no physical paper left to print Bolívars. The physical paper shortage also applies to toilet paper. There isn’t much of it around. If you have some at your hotel, you may have to bring it with you. Food is also scarce, a subject which has been somewhat controversial. Nevertheless, Venezuelans are losing an average of 24 pounds a year. Currently, the reality is that if you’re not so well-off, you’re in trouble, though if you’re wealthy, you can find food in places normal people can’t afford.

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Venezuela poured money into social programs designed to shore up political support. Even strategically useful ones, such as education, set up young Venezuelans to enter an economy in which non-oil exports had collapsed and the currency was moving from overvaluation into hyperinflation. Most importantly, the ongoing and entrenched problem of corruption undermined these ventures at every side. None of these problems were entirely original to the governments of Chavez and Maduro, but all were exacerbated by them.