If you want to find a country where there are many millionaires, take a trip to Venezuela. You will find that Venezuelans seem to be very rich because of the huge amount of money that the citizens carry. However, this may not look like good news at all.
Because of the country’s overwhelming inflation, money seems to have no value. Their bank notes contain huge value but in the black market, they cost much less. As the inflation rate rises, shortage also worsens. There has also been a shortage in the supplies of every necessity like medicines, food and even toilet paper. Because of that, the government of Venezuela felt the need to release new bank notes, and there are three of them that range between 500 and 20,000 bolivars.
Venezuelan people can carry as much as a million bolivars. But that much money is actually worth less than expected. Those million bolivar bank notes are actually worth just 300 USD and every bill costs six dollars less. Chris Sabatini, one of Columbia University’s professors in their School of International and Public Affairs, told FoxNews.com that, the said amount is barely enough. The government has been adding zeros to their bills yet they are still worth nothing. At some point, they will have to stop adding zeros because they will just ran out of space and yet the bill still won’t mean a thing.
The President of Venezuela, Nicolas Maduro, said that the new bills will aid in fighting the rampant smuggling at the outskirts of the country bordering Colombia. President Maduro further stated that there are warehouses located in several Colombian cities like Maicao, Cucuta, Buaramanga and Cartagena, which are filled with bills that contain 100-bolivar notes. The Venezuelan government is also confident that shopping will be easier with the use of these new bills. At present, people usually have to carry huge bundles of bills to buy even the simplest and most basic necessity. Venezuela’s highest bill before the new bank notes were released was 100 bolivars which is equivalent to just three cents in the black market.
In 2016, Venezuela’s inflation rate went up to a maximum big of triple digits. It has been predicted that it will continue to rise to 1,600% in the present year. Because of this, many Venezuelan citizens are not convinced that the new bank notes are just to fight smuggling. They feel like there are other reasons for this. A Venezuelan citizen even believe that the Venezuellan government is just attracting further inflation by doing so.
In 2015, oil prices sank, but Venezuela did not have enough funds to import commodities like medicines and food. This resulted to the shortage that they are now facing. And now, President Maduro is also facing angry Venezuelans who are dissatisfied with what has been going on with the economy. They have also grown unhappy about the decisions that the government is making. In addition to the crisis that the country is facing, crimes are also becoming rampant most especially in Caracas, the country’s capital city. There have also been several blackouts as well as violent protests that often leave casualties and fatalities. People are running amock showing disagreement to the government’s move.
The change or transition to the use of the new bank notes has stirred up more difficulties because of several reasons. First of all, fifty percent of the bank notes circulating in the country are 100 bolivar bills. There are no less than 6.1 billion of these bank notes that are circulating out there. Secondly, the government has obliged the people to change their 100 bolivar bills to the new, higher bank notes in 72 hours. This move, however, stirred up more chaos. It caused long lines at the bank which were irritating most especially to the impatient ones. Some areas did not just have long lines. There were even riots.
The country has been in chaos for the past few weeks. People have been protesting and there have been looting everywhere. Just recently, there was also a looting incident in Maracaibo which police officials had to put down. In some places, crowds of people had to sack some businesses. There was also a situation or a scene where young people showed 100 bolivar bills and waved them in the air while shouting, “useless”, referring to the bank notes. In that said incident, police had to release tear gas canisters to be able to control the situation. Many people were caught and apprehended.
The government has extended the deadline for exchanging and removing 100 bolivar bills several times already, though. The previous bank notes have been used only until February 20.Venezuela is in chaos and there seems to be no way out. And the only strategy left for the country to survive is surrender.
How important is money to you?
How about in your own country, how well do you know the condition of the economy of your country?
Is there a way to save Venezuela?