Zero Hedge recently wrote:
“Back in February, we commented on the unprecedented hyperinflation about to be unleashed in the Venezuela whose president had just announced that he would expand the “weekend” for public workers to 5 days.
“About the same time, the WSJ announced that, ‘millions of pounds of provisions, stuffed into three-dozen 747 cargo planes, arrived in Venezuela from countries around the world to service Venezuela’s crippled economy. But, instead of food and medicine, the planes carried another resource that often runs scarce there: bills of Venezuela’s currency, the bolivar.’”
“The 747 cargo shipments were part of the import of at least five billion bank notes as the government boosts the supply of the country’s increasingly worthless currency.”
“More planes were coming: in December, the Venezuelan central bank began secret negotiations to order 10 billion more bills which would effectively double the amount of cash in circulation [and thereby also reduce the real value (purchasing power) of Venezuela’s national debt by 50%]. That order alone is well above the eight billion notes the U.S. Federal Reserve and the European Central Bank each print annually—dollars and euros that, unlike bolivars, are used world-wide.“
Yes, it’s true that the U.S. dollar and the EU’s euro are different from the Venezuelan bolivar in that dollars and euros are “world reserve currencies” that are recognized and “used world-wide”. The bolivar, on the other hand, is primarily a “local” currency used and recognized almost exclusively within Venezuela.
However, it’s also true that dollars and euros are also virtually identical to Venezuela’s bolivar in that all three currencies are fiat, debt-based and intrinsically worthless. That equivalence is nothing to sneer at.
Why? Because dollars and euros might do better than bolivars today, but that won’t always be so. Venezuela is giving the world yet another lesson on the inevitable fate of fiat currencies: hyperinflation and national ruin.