Hyperinflation Destroying Venezuela
We hear words like “inflation” all the time, but what does that word really mean for the people of Venezuela?
Venezuela is currently ranked as the worst economy in the world. The country struggles with severe food and medicine shortages, political turmoil, violence, and drug trafficking.
As we have argued in several past articles, the crisis in Venezuela is the direct result of years of corrupt socialist rule combined with the crash in oil prices.
Venezuela’s inflation rate hit an all-time high of 800% in December 2016, and the value of the bolivar continues to drop day by day:
• In 2013, 1 USD equaled 31.45 bolivars
• In 2014, 1 USD equaled 76.05 bolivars
• In 2015, 1 USD equaled 682.40 bolivars
• In 2016, 1 USD equaled 1,010.80 bolivars
• In January 2017, 1 USD equaled 9,787.75 bolivars
Today, 1 USD is worth 10,389 bolivars – which means that a single bolivar is worth less than .0001 USD.
To put this into perspective, a person earning the equivalent of $20 per hour in Venezuela in 2013 is now making 6 cents per hour. Your savings of $10,000 is now worth $30.
On the flipside, a loaf of bread that cost $2 in 2013 now costs more than $600. Customers literally carry their money in sacks when they go to the store.
Many parents are choosing to go hungry in order to keep their children fed. Others loot garbage bins or attack food trucks before they get to the supermarket.
In more recent news, Venezuela has voted to approve changes to its constitution that will give socialist President Nicolas Maduro even more power. As I wrote in a previous article, the vote was heavily manipulated by Maduro’s government.
Editor’s note: I happened to be in Beirut when the Lebanese pound fell from 30 pounds to the dollar, to 600 pounds to the dollar within a 30 day period. The tension in the air was palpable as the people started to realize their jobs no longer paid a living wage, and their families no longer had any means of support. The country quickly fell into further chaos from there. This is what we are witnessing with Venezuela.