With inflation in Venezuela at 1,743 percent per year, socialist government just chopped SIX ZEROES off the currency

I started writing this blog because I wanted to predict the future--not with some mystical prescience, but by simply analyzing information that was in the public domain (so available to everyone), and seeing how government policies would be affected.  If it seemed obvious that those policies would cause disaster, I'd say so.

I wrote the piece below almost a year ago, and just stumbled on it while looking for something else.  I think it was right on the nose.  Take a look:

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The "news service" Reuters isn't a fan of capitalism or free markets, so their coverage is harsh on free-market nations, and gushing for socialist ones.  For the past decade or so they've treated the ghastly socialist regime ruling Venezuela very gently, with few critical articles.  

But even Reuters occasionally lets the truth slip out a bit, as in this story from a year ago:

CARACAS, Oct 1 [2021] (Reuters) - On Friday Venezuela launched its second monetary overhaul in three years, by cutting six zeros from the bolivar currency in response to hyperinflation, simplifying accounting but doing little to ease the South American nation's ]economic crisis.

U.S. low-info Democrat voter: "Wait...what?  Hyperinflation?  Whut dat?"  

Ah, glad you asked.  Read on.

The move is designed to make accounting more straightforward at businesses and banks, where systems can no longer handle the huge figures.

"Designed to make accounting more straightforward," eh?  Really?  Bullshit.  It's designed to make the ghastly socialist government not look so astonishingly stupid--because before the "chop six zeroes off the currency" a cup of regular coffee cost 100,000 "bolivars."  Fifteen years ago a bolivar was worth about 20 cents.  Before the government cut off six zeroes it was worth much less than one-one-thousandth of a penny.

Low-info Dem voter: "Geez, BOR-ing!  Why would I care about simplifying accounting at businesses and banks?"

Good point!  Cuz that wasn't the reason.  Instead the real reason is that the incompetent socialist government was trying to cure "hyperinflation," which has utterly destroyed the economy of a country that just 20 years ago had the jhighest per-capita income in all of Latin America.  Reuters wrote the part about "simplifying accounting" to throw readers off the REAL story.

Venezuela's inflation rate this year is 1,743%, according to the Venezuelan Finance Observatory. A minimum wage salary is barely $2.50 per month.

Low-info Dem voter: "I'm not really a numbers person.  What does that mean to the average elite voter/ consumer like me?"  

What it means is this:  Suppose that after ten years of hard work you've managed to save $10,000, and have it in the bank on January 1st.  Because hyperinflation vastly raises the price of everything every day, an inflation rate of 1,743 percent per year means that after one year the entire $10,000 of your hard-earned savings, from your decade of hard work, would only be able to buy what would have cost TEN CENTS at the beginning of the year.

Low-info Dem voter: "Wait, dat not possible!  Dat just a right-wing scare-story!  Yew cahn't fool me!  I went to Hahvahd!"

Ah, I see you know as much about history as you do about math.  Do you by any chance work for the biden administration?

Hyperinflation makes everything so vastly more expensive so fast--in extreme cases over 100,000 times more expensive than at the beginning of the year!--that cash registers and banks weren't programmed to handle numbers that big.  So the socialist gruberment said Hey, starting next week you bring us one Million bolivars and we'll give you a brand-new, just printed, One bolivar banknote.  Is that a great deal or what?

And astonishingly, this isn't the first time the socialist gruberment has done this: Just three years earlier the socialist government did the same thing to supposedly "solve" the hyperinflation caused by socialist policies--except then they only cut FIVE zeros from the currency.  Meaning you exchanged 100,000 "old" bolivars for one New bolivar.  Such a deal!  And it worked SO well!

And even THAT wasn't the first time:  ten years before that the faaabulous socialist president Hugo Chavez chopped three zeros off the currency.  He promised that brilliant move would cut inflation back to single-digits.  And every "news" outlet in Venezuela positively gushed at the brilliance of this move.

So did that work, eh?  Well, ten years later the government was forced to cut FIVE zeroes off the currency, so what do you think?

Wait, I forgot:  You're not really a numbers person, so we should stop asking you hard questions and let you get back to making economic policy for the biden regime.

So what caused the socialist gruberment to chop a total of 14 zeroes off the currency (6+5+3)?  Here's how the communists at Reuters explain it:

The once-prosperous OPEC nation is suffering a years-long economic crisis that has led millions of Venezuelans to emigrate.  Maduro's socialist government blames U.S. sanctions for the country's woes, while critics assign responsibility to interventionist macroeconomic policies.

Note well the FIRST reason the liberal "news" outlet cites for the "years-long economic crisis:"  "U.S. sanctions."  Really?  So is there a U.S. "embargo" on selling things to Venezuela, as Democrat propagandists claim is the cause of Cuba's woes?  If there had ever been such a policy, do ya think the biden regime would have let such a U.S. policy continue? 

The U.S. has never imposed trade sanctions on Venezuela.  Never.  The socialist regime bleats that lie because it keeps Venezuelans from blaming their socialist government for the shortages and hyperinflation.  "Blame anything other than our own policies, so the people won't revolt."

But with the second "explanation" Reuters reveals a kind of truth.  The problem is that the "reporter" uses the phrase "interventionist macroeconomic policies," precisely because it's totally vague.  It lets them avoid naming the real cause of the hyperinflation and poverty that have made oil-rich Venezuela so miserable for the last 20 years:  Socialism, and a command economy--meaning the dictator says "You will do X" and you do it, or they throw you in jail.  

"Wait, is that like our brilliant preznit ordering Americans 'Take the vax or be fired!' "?

Pretty close. Going to jail is worse, but either way your family starves and likely loses their home.

The government of Venezuela quickly assured citizens that this "correction" would force inflation back to single digits in a matter of weeks.

Yep yep yep.  Just like when they did it three years earlier, or another seven years before that, eh?  Oh wait...it didn't work those times either.

Now for young Americans let me explain the REAL cause of hyperinflation:  To get elected, the socialist government promised to "subsidize" the price of gasoline, cooking oil, corn meal and other basic needs.  That meant the government was spending vast amounts of money--money it didn't have--to pay the difference between what those goods really cost, and what the socialists had promised their supporters the price of those goods would be.

For example, in the U.S  gas now costs around $4 per gallon.  But thanks to the supposed miracle of socialism, Venezuelans only pay roughly a dime per gallon!  This proves socialism is a far better system, comrade!

"Wow, that's fantastic!  We Democrats always knew the oil companies were conspiring to make us pay more for gas!  Yay socialism!"

Except it's not a miracle at all.  Instead the socialist government is spending billions--that it doesn't have--to pay the difference between the REAL cost of a gallon of gas and the dime Venezuelans pay.  And because the government is spending far, far more than it takes in in taxes, they simply print whatever amount they need in banknotes--which is the direct cause of...wait for it...hyperinflation.  

So the alleged "socialist miracle" isn't.  Instead the low price of basic goods it due to the gruberment printing what economists call "fiat currency," which is the term for paper money that has no connection to the real world.

Now:  Hyperinflation--caused by a government printing unlimited amounts of paper money--totally destroys the value of savings.  And when the value of savings is destroyed, people don't save anything. Which means there's no source of capital to fuel investments.

Low-info Dem voter say "RIGHT ON, comrade!  Da People have suffered for too long while duh capitalists have gotten rich from our labor!  Destroy capital and the workers will take their rightful place at the top of the social order!"

Oh, absolutely, comrade.  And if you run out of, say, toilet paper (which Venezuela did for two years not long ago) your brilliant socialist rulers will order plants to be built to provide it!  That way things will not only be more efficient, they'll be more FAIR!

Say, how's that working out for duh People of Venezuela, comrade?

[crickets]

Ah, suddenly silent?  Hmmm.... So let's tell readers:  In Venezuela hospitals (at least for "non-elites") don't have basic disinfectants, let alone antibiotics.  They don't even have sheets and pillowcases--you have to bring your own.  Old antibiotics are available, but only on the black market, and cost a month's salary.

In the middle of one of the biggest coffee-growing nations on Earth, a couple of years ago Venezuela was forced to import...coffee!

Gettin' the picture yet, comrade?  Government printing money to stay in power wipes out the value of savings, without which there's no source of investment capital, which sends the economy into the toilet.

Finally this:  A federal reserve branch recently issued a report saying U.S inflation was at a 30-year high.  

Low-info Dem voter: "I'm not really a numbers person.  Usually when economic things are "high" that's good, right?  So is this number good or bad?"

[sighs]  Never mind.  Go in ignorant peace, citizen.  You'll keep voting Democrat, and gushing over stories in the Atlantic or NY Times calling biden "the Great Uniter," as they did for Obozo.  You won't notice prices rising, and the Media will do everything they can to get you to believe any inflation is NOT due to Dems voting to spend $5 TRILLION on two bills--one allegedly paying for "real" infrastructure (roads, bridges etc) while the Dems have cunningly disguised a second bill--three times larger than the "real" infrastructure bill--as "social infrastructure," which they won't allow to be filibustered, and which they've said must be passed before the "real" infrastructure bill.

Venezuela here we come.  With the full support of Democrats.

Source.

https://www.reuters.com/world/americas/venezuela-subtract-six-zeros-currency-second-overhaul-three-years-2021-10-01/