We’ve all been to the deli and requested a pound of this or that lunch meat for making sandwiches during the week. The price per pound is usually on a little sign next to the meat, then the person working the deli counter slices the meat and weighs it on a scale that computes the actual cost of the amount we’re buying and prints a label for the bag. Things used to work exactly the same way in Venezuela, albeit in kilograms instead of pounds and bolivars instead of dollars. But thanks to hyperinflation, the cost of a kilo of meat is so high that most deli scales can’t handle it. From Bloomberg:
The store’s deli scales run to only six digits. And ham, my Whatsapp food-hunting community tells me, is retailing nowadays for about 1,480,000 bolivars per kilogram. It didn’t matter that I wanted only a few hundred milligrams. The cost was, at this market at least, incalculable.
A similar dynamic is impeding the use of credit and debit cards. The price of a set of sheets (33,541,963), a pair of Adidas sneakers (10,500,000) or even a slice of lasagna (401,450) can’t fit on the screens of older card machines; the solution is to split one purchase into several transactions. Even the invoice printers that many businesses use for reports to tax authorities are running out of space.
The story suggests the likely solution will be for the Marduro regime to announce that 1 new bolivar is now equal to 1,000 old bolivars. That will solve the problem with the number of digits on a deli scale but it won’t solve the ongoing hyperinflation.
Current estimates put Venezuelan inflation at 4,300 percent but some estimates are twice that high. Last December, Bloomberg reported that the currency had become so worthless that some people were turning to virtual currencies from video games as a source of revenue.
People spend hours a day playing dated online games such as Tibia and RuneScape to acquire virtual gold, game points or special characters that they can sell to other players for real money or crypto-currencies such as bitcoin. The practice, which has previously cropped up in other basket-case economies such as North Korea’s, has become so popular with Venezuelans that they’re now spreading inflation inside the virtual worlds.
“We’ve never made this much before,” says Efrain Peña, 29, who plays seven days a week at the Mona Pizza cybercafe to support his wife and child. Most Venezuelan gold farmers make the equivalent of a couple of dollars a day, but in many ways they’re better off than salaried workers, because their earnings are indexed to Venezuela’s black-market dollar exchange rate. “What job can match what we’re making now?” says the onetime graphic designer.
Bolivar notes are so worthless now that some people simply toss them in the street. Others collect them to weave them into handbags and other items which are sold to people in neighboring Colombia.
Venezuela’s currency has lost so much value that people simply throw away their small bills — they are virtually worthless anyway.
Enter Wilmer Rojas, 25, who scoops them up off the street, uses an origami-like folding technique, a needle and thread to make handbags with an eye to selling them — maybe even abroad, where people have real money…
“People throw them away because they are no good to buy anything. No one even accepts them anymore,” Rojas told AFP outside a subway station, where he also sells coffee and cigarettes in addition to his unusual bag-weaving work.
I’ll close with this statement from a British MP turned leader of the Liberal Democrat party named Sir Vince Cable who says a lot of people on the left are embarrassed about their past support for Venezuela: