It has been a while since we have checked in on the socialist disaster of Venezuela. For a while it looked as though Maduro’s criminal gang might be driven from office, but the threat has passed and instead, millions of Venezuelans have simply left. Now that country’s socialist government has announced that it is devaluing its currency by (if my arithmetic is correct) one million times:
Venezuela on Friday 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.
Yes, this is what we call hyperinflation:
Venezuela’s year-on-year inflation is 1,743%, according to the Venezuelan Finance Observatory. A minimum wage salary is barely $2.50 per month.
So basically, you might as well burn bolivars in the fireplace, as some Germans did during the Weimar hyperinflation. This is a remarkable fact:
President Nicolas Maduro’s government in 2018 removed five zeros from the currency due to high prices. That came a decade after the late President Hugo Chavez subtracted three zeros from the bolivar with the promise of single-digit inflation, which was not achieved.
That last is what we call dry humor. So the socialists have devalued the bolivar by 14 decimal places in recent years. Another victory for socialism. And, one might add, for the Modern Monetary Theory that is now all the rage in the Democratic Party.
On the bright side, it sounds like most Venezuelans have already stopped using the bolivar, preferring to carry dollars rather than a wheelbarrow full of worthless paper:
The widespread adoption of the U.S. dollar for commercial transactions in Venezuela will further dilute the relevance of the new scheme. Bolivars in cash in Venezuela are rarely used for routine purchases.
How could they be? How much for that pack of cigarettes? Forty-seven billion bolivars.
Many people on Friday were using dollars in cash for purchases in supermarkets, pharmacies, and stores selling school supplies and uniforms, Reuters witnesses said. Bank systems were functioning normally after an hours-long planned outage early on Friday morning as they converted to the new currency scheme.
Will this latest devaluation make any difference? Of course not.
“The economic imbalances in the country are very acute and the zeros that are being removed today will soon return,” said economist Jose Manuel Puente. “The reconversion will have no impact in macroeconomic terms.”
In macroeconomic terms, socialism is hopeless.
The Democrats’ current multi-trillion dollar spending binge will not, by itself, produce hyperinflation like that which has devastated Venezuela and other countries through history. But it is certainly a step in that direction. And Venezuela’s experience should be a warning to leftists like Bernie Sanders, a longtime fan of Venezuelan socialism who stuck with Chavez and Maduro nearly until the bitter end. Socialism is a catastrophe, always and everywhere, and it is shocking that much of the Democratic Party wants to bring poverty, chaos and ultimately Chavez/Maduro style dictatorship to the United States.
Speaking of Sanders, he might have set the all-time record for Twitter abuse for this unbelievably stupid tweet:
2 senators cannot be allowed to defeat what 48 senators and 210 House members want. We must stand with the working families of our country. We must combat climate change. We must delay passing the Infrastructure Bill until we pass a strong Reconciliation Bill.
— Bernie Sanders (@SenSanders) October 1, 2021
Normally I would suspect that something this dumb is an instance of drunk tweeting, but I’ve never heard that Sanders is prone to overindulgence. So maybe it is just a moment of revelation in which the totalitarian emerges from behind the mask: We socialists don’t have the votes! Unacceptable! From the perverted perspective of socialists like Sanders–although, to be fair, the same attitude prevails through most of the Democratic Party–it is only democracy when they win.