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Venezuela is getting a new currency

It's basically the same as the old currency, but with less zeroes.

It costs two million bolivars to buy a cup of coffee in Venezuela. The government's slashing five zeroes off the currency to try and bring things back to earth – but people aren't sure it'll work.

What it means: Prices in Venezuela have multiplied to a completely absurd level in the last few years.

The economy relies almost entirely on oil, but the government hasn't sold anywhere near enough, and sanctions from foreign countries haven't helped in terms of bringing in money – so instead, they've been printing new money to make ends meet.

That's led to a huge 'devaluation' in the currency: each bolivar is worth a lot less than it once was, because the government has printed so many of them. It's what economists call 'the wheelbarrow problem' – each unit of currency is so worthless, you need to bring a whole wheelbarrow of them to the shop to buy anything decent.

As of today, the government has brought in a new currency, called the 'sovereign bolivar', which slashes five zeroes off the last one (so that two million bolivar coffee is now just 20). They've also set a minimum wage 34 times above the previous.

It's all supposed to signal a new start of 'fiscal responsibility': but people are sceptical as to whether anything will change if this move isn't accompanied by some more structural changes in how Venezuela's economy is managed.

Read the full story: Sky News

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Reader Comments

  • WhereAreTheVikings

    What a terrible, terrible shame. Western Civilization nurtured capitalism, and now capitalism is destroying it. And these young people seem to welcome the invasion of their homeland. The media and schools have been very efficient in wiping out all traces of blood and soil.

    • prollawalllynotahumanoid

      Capitalism isn’t the problem. It’s corrupt politicians taking bribes and kickbacks from Globalists and the Chinese.

      • WhereAreTheVikings

        Maybe I should have said crony capitalism. Although Italians importing Chinese to make “Italian leather” shoes is not crony capitalism. It is capitalism, pure and simple.

        • prollawalllynotahumanoid

          That would be crony capitalism and globalism combined. They aren’t concerned with the affect their policies have upon their citizens, the health and welfare of their society and culture or their economy. What it isn’t is fair-free trade to further national interests.

          • WhereAreTheVikings

            I’ve always seen them as one and the same, but perhaps they need to be named individually, just to bring home the point.

      • WhereAreTheVikings

        But now that travel is so easy and borders are virtually down through H1bs and the like, theoretically you can’t blame capitalists for the pursuit of cheaper labor, although I do heartily blame them not being more patriotic than that. Perhaps the emerging nationalism will force them to voluntarily do what they should have morally been doing all along, and that is employing business practices that preserve their countries and nationalities. The government should be doing everything it can to encourage that, to the extent that small government should do anything but guard the borders and strictly, drastically, limit immigration.

      • Henry Lam

        It is China with its corrupted mindset affecting the world.

        • prollawalllynotahumanoid

          No it is not. Capitalism is the fairest and least corrupt system of all.

          Socialism and communism is based on authoritarianism, coercion and police intimidation. It has and always will be rife with criminality, bribes and kickbacks.

          Corruption can be anywhere but it is the very basis of socialism and communism.

    • Henry Lam

      The government is too weak. They do not understand the mindset of communists and how they educate their people. Those communist people are only loyal to their country and could be dangerous. The immigration law should only accept those who accepted multiculturalism and taught from a democratic education system. This virus events clearly has shown how stupid to take China as a friend.

      • WhereAreTheVikings

        The government is not too weak. Just weak-minded about some things.

  • Gabi Rodrigues

    For how many days can a country maximum close their borders to foreigners maximum? Like now, with the virus, everyone is using 30 days. Can it be more?