Venezuela Issues New Bank Notes Because of Hyperinflation

Venezuela Issues New Bank Notes Because of Hyperinflation
So apparently Venezuela is having some dire economic issues. Namely hyperinflation. This is actually news to me. I wasn't aware that their economy was in run-away status. The government released new notes to try to curb this. Apparently people were carrying around bags of money. Well just look at the picture in the article (posted below). That guy has a STACK of bills he is trading in.

President Nicolás Maduro announced early last month that new notes would be issued to replace the old ones, a measure that promised to lighten the load for many Venezuelans, who must carry around bags of cash for even the simplest transactions.

The 100-bolívar note is worth about 2.8 American cents at Monday’s black market rate.

The new notes range from 500 to 20,000 bolívars, and the largest of the bills is worth about $5.60 on the black market. But they were not available everywhere on Monday. One bank received only the 500-bolívar bills and had run out by 2 p.m.

But that's not all. Apparently criminal organizations and cartels had been hording the 100-bolivar bills for reasons which prompted the government to try to decirculate that bill. Though do some poor communication that didn't work and it ended up shaking people's confidence in this new money issuance. So the government has to relent and keep the bill in circulation.

Although the move was intended to make life simpler, there was chaos in mid-December when Mr. Maduro abruptly announced that the 100-bolívar notes would be removed from circulation. The reason, he said, was that organized crime groups were hoarding the 100-bolívar bills.

Venezuelans rushed to exchange their bills, only to find that banks refused to accept them because they had no larger bills to offer in exchange. There were outbreaks of looting, and some people even burned the 100-bolívar notes, believing they were nothing more than paper after Mr. Maduro’s announcement.

Mr. Maduro was forced to relent and allowed the 100-bolívar notes to remain in place. He blamed his political opponents for the delay, as well as the United States, which, he said, had prevented cargo planes carrying the new bills from reaching Venezuela.

Finally, on Sunday, Mr. Maduro said the new bank notes would be phased in beginning on Monday. The 100-bolívar note is to remain in circulation until Feb 20.

Fortunately it looks like this plan is working out for the time being and I hope that Venezuela gets its economy back on track in short order. Though I'm not sure how likely that is.

“Venezuela needed new bills and coins two years ago,” he added. “It is a measure that has been delayed for a long time. The technical decision was in some way conditioned to a political decision.”

a reply to: Krazysh0t

Their real problem is Maduro trying to hold on to Chavez's failed socialist Government. Trashing oil prices further will finally end it and a real capitalist Government can take its place.

a reply to: Bramble Iceshimmer

I'm not entirely keyed up on the situation in Venezuela, but I'd venture a guess that the issues affecting the country are a BIT more complicated than just what you said.

Maduro should be jailed for what he did, he said a friday people would have Monday and Tuesday to change all 100 bills and after that until Friday in the central bank, the new bills would circulate inmidietly, he ordered the border with colombia and brazil closed so none could bring the stacks of bills from there.

After he realized that Monday was a non working day for banks he changed the time to exchange the bills to the whole week, only in government banks. The lines where huge and many could not exchange their bills, even so the new bill were not ready, after that week people with huge stacks of now useless paper started to burn the bills and riots began mostly in the state of Bolivar, around 20 people died beside the material loss.

Then after a few days the 100 bill was no longer working and no new bills, if you went to a ATM it would give all your withdrawn in 100 bills that no one would accept. Now maduro said the 100 bills would still be good until the 30 of dicember and the new bills would be on the street the 19.

Fast forward to a few extensions more of the 100 bill, now it's that the new bills are being delivered to the banks, 19% of the money that was circulating in 100 bills.

Improvisation of maduro got people killed.

a reply to: Indigent

I dunno. It sounds like from what you are saying there that there were some mistakes made. I really don't see that as a jailable offense. I can't speak much for Venezuela's laws, but incompetence isn't exactly illegal. Though I agree, that mistake was a rather dire one. Not to mention costly since they are already trying to rebuild their economy. Missteps like that can hinder or break everything they've done to get back on track.

a reply to: Krazysh0t

yes I was aware of this going on. They've been on the brink of civil war for a few years.
I don't know everything about the money situation but it is true a large part of the problem is it's socialism.
Also the petro dollar comes into this..

but think about it, socialism... Printing too much money to fill said obligations...
Then the money isn't worth the same..

that's what's happening in the US, but our economy is so huge we somehow absorbed the "quantatative easing"

then oil prices went down.. what was it 50 $ a barrel?


I have no clue how they could get out of this mess now.

and they are NOT getting back on track, printing that new money just makes it so you don't have to carry giant bags of cash, it does nothing to change inflation..

see

Over the summer, the government was increasing the number of bolivars by 100% a month. But since then, the rate has accelerated: by mid-November, the amount of bolivars in circulation had increased by 130% compared to a year ago, according to central bank statistics.

One dollar fetched 1,567 bolivars on November 1. On November 28, a dollar was worth 3,480 bolivars on the widely-used unofficial exchange rate monitored by Dolartoday.com.

Doubling the money supply EVERY month!!

like hello that's a runaway train.. That's doomed.

a reply to: Krazysh0t

They only try to remain in power, Leopoldo Lopez is in jail for causing civil unrest like Maduro did.

Frankly your attempt to put maduro government in good light makes my blood boil, stop smoking so much it's not good for you.

originally posted by: Indigent
a reply to: Krazysh0t

They only try to remain in power, Leopoldo Lopez is in jail for causing sivil unres like Maduro did.

Frankly your attempt to put maduro government in good light makes my blood boil, stop smoking so much it's not good for you.

for real...

people want that man dead.. The entire country is basically in protest..

these people are killing zoo animals and presumably pets to eat.. IT's not going well.

originally posted by: Krazysh0t
... but I'd venture a guess that the issues affecting the country are a BIT more complicated than just what you said.

No. What Bramble said is correct. Venezuela is a basket case economy, driven by political interference and ideology. Venezuela should be reasonably well-off.

a reply to: Indigent

Sorry. I thought I was clear in the OP about me not knowing much about what was going on down there. I'm just basing my reasoning off of what I just read in that article. I don't know much about the current President. From what I read there it doesn't look like he did anything wrong. Though if you believe he should be in jail, I would certainly enjoy you posting some examples of his jailable offenses.

a reply to: Krazysh0t

From Venezuela penal code

Article 203, 206, 293, 296-A, 316, 322, 372, 531

Artículo 296-A.— Todo individuo que por medio de informaciones falsas difundidas por cualquier medio impreso, radial, televisivo, telefónico, correos electrónicos o escritos panfletarios, cause pánico en la colectividad o la mantenga en zozobra, será castigado con prisión de dos a cinco años.

372.— El que propagando falsas noticias o valiéndose de otros medios fraudulentos, haya producido la escasez y encarecimiento de los artículos alimenticios, será penado con prisión de seis a treinta meses. Si el culpable es algún corredor público, se aumentará dicha pena en la mitad.

529.— El que por negligencia o impericia hubiere creado, de alguna manera, el peligro de un daño contra las
personas o de un grave daño contra las cosas, será penado hasta con doscientas unidades tributarias (200 U.T.) de multa
o con arresto hasta por veinte días.

indiley.com...

Without taking into consideration the lost of life and the legal repercussions of it, just the unrest and hardship caused by the way the change was handle is a crime in Venezuela, and the article 539 says lack of skill, inexperience or negligence is no excuse when their act cause public safety risks.

Here is a thread from Michiganswampbuck in August of 2016.... ATS Thread
It is a quick primer on the dire straits that Venezuela has been in for some time now.

a reply to: Indigent

Well I'll have to keep a better eye on things. I understand that Venezuela is going through some hard times, I just find it counter productive to kick out the current government every time it makes a mistake, but if he should be impeached then those are the articles to do it with.

a reply to: Krazysh0t

Impeachment?

Do you know that in early dec 2015 opositors won supermajority in the congress what prompted the outgoing congress to designate in an illegal way supreme court judges that had to be selected by the new congress.

Then this judges ruled their designation was lawful, there was fraud in one state during the new congress election and proceeded to remove 3 congressman so the opositors could not have the supermajority, then gave special power to maduro to legislate, suspended elections and void the congress...

What impeachment?

a reply to: Indigent

No. I didn't know that. How many times do I have to tell you before it sinks in that I don't know much about the situation down there? Though without impeachment, the only way to remove someone from office like that is through armed revolt. If you can't get him impeached, you certainly aren't going to get him jailed.