Friday, November 8th 2013 - 06:00 UTC

Venezuela joins the hyperinflation club: 54.3% in last twelve months and climbing

Venezuela's consumer prices rose 5.1% in October, pushing the 12-month inflation rate to 54.3%, the highest mark since the late President Hugo Chávez took power in 1999. The news was released by the central bank on Thursday which also revealed that the scarcity index had reached its highest level since 2009.

Maduro and his fantasies attribute inflation to conspirators

Hyperinflation is attributed to two main factors: one is ramped-up public spending from President Nicolás Maduro, Chávez's successor. The central bank said the country's money supply grew 70% in the past 12 months, much of it to underwrite a big increase in government spending.

Likewise currency controls Chávez implemented in 2003 have made access to dollars difficult, causing widespread shortages in an economy that depends on imports for roughly 70% of everything it consumes. The central bank's scarcity index, a measure of basic items missing from the market, edged up to 22.4% in October from 21.2% in September, the highest since at least 2009.

It all adds up to more local money chasing fewer goods—a recipe for price increases, economists said. To this must be added rampant corruption and mismanagement of the oil dependent economy.

The current rate is quite a bit higher than the average inflation rate during the Chávez/Maduro era of 23.6%, according to a presentation Oil Minister Rafael Ramírez made to investors on Thursday.

However President Maduro has alleged that Venezuela's mounting economic woes have been caused by right wing conservatives that want to see him and the Bolivarian revolution out of office, and are hoarding products in order to drive up prices. Earlier Thursday, Mr. Maduro said 1,000 inspectors had been sent out as part of a recently launched task force to root out businesses that seek inflated profit or hoard products.

“We are not going to accept speculation under any circumstances,” said Mr. Maduro, during an appearance televised on state television. “If I have to confiscate an entire warehouse, I will every day beginning now.”

The crackdown was part of a host of economic measures Maduro announced late Wednesday aimed to “stabilize” the economy. The moves included a reorganization of the government's foreign-currency exchange channels, which would be housed in a new centralized agency dubbed the National Center for Exterior Commerce.

Strict controls make dollars available only through government channels in Venezuela. The lack of dollars has resulted in a flood of Bolívares on the black market, where a dollar fetches nearly 60 Bolívares, according to websites that track the rate. That is more than nine times the official peg of 6.3 Bolívares per dollar.

The government has made it a crime to even mention the black-market rate, punishable by as many as seven years of prison time. But Mr. Maduro openly presented details on the currency market during his comments Wednesday night, even mentioning the names of underground websites locals use to track the illegal rate.

20 comments Feed

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1 Anglotino (#) Nov 08th, 2013 - 07:23 am Report abuse
Congratulations Venezuela!

You have successfully joined the following clubs:
* the hyperinflation club
--- 54.3%
* the spying club
--- 1,000 inspectors looking for hidden warehouses of hoarded goods
* the fascist club
--- don't mention the market exchange rate-7 years jail!
--- but what is la lechuga verde today?
* Mercosur
--- as if the country wasn't already stuffed enough LOL
2 willi1 (#) Nov 08th, 2013 - 08:59 am Report abuse
BUT: he doesn´t lie about the inflation rate as the ck-gang in arg! that is remarkable.
“The news was released by the central bank on Thursday which also revealed that the scarcity index had reached its highest level since 2009.”
3 Anglotino (#) Nov 08th, 2013 - 09:22 am Report abuse

It is puzzling though because Maduro lies about so many other things.

Mind you it is difficult to hide 54% inflation or the fact that most people have to visit 5 different shops to find all the products they need.

I'm betting another assassination “attempt” with no concrete details before year's end.
4 agent999 (#) Nov 08th, 2013 - 10:18 am Report abuse
He does lie however about the cause of the inflation, it is the fault of the evil USA , the right wing conservatives and nothing to do with his policies.
5 Rufus (#) Nov 08th, 2013 - 12:45 pm Report abuse
I'd be a bit nervous if I lived in Guyana, given that of the three countries that border Venezuela they have the least ability to defend against a population-unifying border dispute (aka invasion).

I don't think that Maduro and his merry band of lunatics are quite insane enough to pick a fight with Columbia or Brazil.
6 Captain Poppy (#) Nov 08th, 2013 - 12:47 pm Report abuse
You see that flash of light in the corner of your eye? That's your career dissipation light. It just went into high gear.

Hear those little foot steps in your brain? That's the the Army getting ready to terminate your job.

You should have stayed on the bus. Perhaps you can drive el Commandante around......if you are still breathing or not in jail for squandering Venezuela's resources. Seems like a reasonable charge from the military. Stock up on toilet paper while you can. Just a suggestion.
7 Casper (#) Nov 08th, 2013 - 02:13 pm Report abuse
Meanwhile...Maduro has just announced a plan to install A.A. artillery in the Caracas hills to fight the inevitable 'imperialistic invasion'. If this actually comes to fruition I will eat a bug.

He has announced a public holiday in honour of Chavez on Dec 8. It happens to coincide with a nationwide Mayoral election.

Brazil has sent a delegation led by their Commerce and Industry Minister - Brazilian companies haven't been paid for their exports for a few months now. They are losing patience.

But what I really want to know is, where is he taking his fashion inspiration from? Liberace?
8 Pugol-H (#) Nov 08th, 2013 - 02:55 pm Report abuse
All those petro dollars, and the money supply still had to increase 70% to cover the spend, some spend.

Makes you wonder how much longer they will be able to continue “buying influence in the region”.

I think it’s highly unlikely they would actually invade Guyana, although you never quite know in a situation like this, it has happened before in SA remember.

However increased provocations by Venezuela on the ground, with an increase in the diplomatic tension is almost inevitable.
9 Captain Poppy (#) Nov 08th, 2013 - 05:21 pm Report abuse
“However President Maduro has alleged that Venezuela's mounting economic woes have been caused by right wing conservatives that want to see him and the Bolivarian revolution out of office, and are hoarding products in order to drive up prices.”

Hey Bus!......if they are powerful enough to cause hyper-inflation, they would be powerful enough to remove your oxygen you befuddled moron. I have to admit....the Venezuelan military has thicker skin than I though possible. I never though that they would allow themselves to be laughed at on a worldwide stage......and for so long. All pinheads they are.
10 Conqueror (#) Nov 08th, 2013 - 05:52 pm Report abuse
Good news for CFK. According to the Congressional Index, argieland's inflation is 24-25%. And MADland is twice that! Look how well argieland is doing. On the other hand, there are those that suggest that argieland's inflation already exceeds 100%. Are there no whistleblowers in argieland? Or has “Two-Gun” Moreno already shot them all? Are they lining up for their “free” helicopter sight-seeing tours? Have they been assigned to the new oar-propelled argie submarines? Or the new generation of argie “kamikaze” pilots?
11 ChrisR (#) Nov 08th, 2013 - 08:26 pm Report abuse
I have been thinking who the hell this clown reminds me of and it has just come to me: Gareth Hales from Hale and Pace.

If you want proof, here it is, enjoy:
12 Max (#) Nov 08th, 2013 - 09:13 pm Report abuse
N.Maduro !

I listened your tv speech '' la guerra economica '' last night at TvSur

but there are ~ 20-30 billons $ vapourisied (absent)money in the economy..
adding some other technical problems.
13 Brasileiro (#) Nov 08th, 2013 - 10:59 pm Report abuse
The Brazil and Mercosur will solve the problem of Venezuela as Vivaldi: 4 Seasons.

Lindo país!
14 Nosregor (#) Nov 09th, 2013 - 01:03 am Report abuse
As I keep reminding everyone...Vzla is effectively in the hands of a military dictatorship/Mafia...the Generals are making an absolute fortune irrespective of the dire condition of the economy...Maduro and Co. are just mannekins. Dont try to find any logic behind Maduro´s latest economic manifesto ...he cant change anything....the abyss awaits. However all of your comments are fun to read.
15 Captain Poppy (#) Nov 09th, 2013 - 02:47 am Report abuse
looks like tobi s back in one of his/her many masks.
16 Anglotino (#) Nov 09th, 2013 - 06:54 am Report abuse
“Brazil and Mercosur will solve the problem of Venezuela”

Hmmm Venezuela joined Mercosur 31st July 2012. It had annualised inflation of 18.6% for August 2012.

It is now 54.3%.

When the hell is Brazil and Mercosur going to fix it exactly?

It has TRIPLED since joining Mercosur.
17 reality check (#) Nov 09th, 2013 - 08:26 am Report abuse
Simple, they will open a gov stats bureau and call it Indec.

Easy when you know how!
18 ChrisR (#) Nov 09th, 2013 - 09:43 am Report abuse
17 reality check

I think INDEC is too much of a give away.

I think it would be called Venezuela Data or VD for short! :o)
19 reality check (#) Nov 09th, 2013 - 10:43 am Report abuse
Lol like it, Pmsl!

Following on from the thread of “The ministry of Happiness”

He should rename the country Xanadu.

That would then make him, the President of Xanadu or POX for short.

Sorry about that, could not resist it!
20 ChrisR (#) Nov 09th, 2013 - 02:03 pm Report abuse
@ 19 reality check
“POX for short”

You are a very naughty boy! :o)

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