Well, a 99.5% currency plunge isn’t the ONLY reason why protests are a daily occurrence in Venezuela.
(Bloomberg) — President Nicolas Maduro has overseen an unprecedented depreciation in his country’s currency since taking office, with the bolivar now down 99.5 percent to 5,100 per dollar in the black market that everyday Venezuelans use. The sharp decline has wiped out savings and made buying imported goods all but impossible, helping fuel the anger directed at the government in street protests that have turned deadly in recent weeks. While Maduro has raised the minimum wage almost 20 times during his tenure, it’s still the equivalent of just $40 a month.
Yes, the blackmarket currency which many Venezuelans use has actually fallen 99.5% under Maduro.
Say, The US Federal Reserve’s destruction of the purchasing power of the dollar since The Fed’s creation looks absolutely sedate compared to Maduro’s Bolivar destruction.
Here is the OFFICIAL CPI YoY for Venezuela (last reported at the end of 2015 and it was 181%). Things have gotten far worse since then.
Of course, Maduro and his pals have effectively destroyed the once productive oil industry (by replacing competent managers with political hacks). Then we have the nationalization of the the auto industry, forced production of goods (like ordering bakeries not to produce desserts and only produce bread), etc. Very reminiscint of the old Soviet Union — a command rather than a demand economy.
Venezuela’s 2 year sovereign yield (in US dollars) is the highest in the world at 37%.
And Venezuela’s 10 year sovereign yield is also the world’s highest at 23.8% (once again, denomiated in US Dollars).
Venezuela sovereign yield curve is steeply downward sloping, as is their credit default swap (CDS) curve. Their 5Y CDS is at over 7,000 at the 6 month mark.
What a complete and utter disaster the once thriving Venezuelan economy has become under the dynamic duo of Hugo Chavez and Nicolas Maduro.
Here is Venezulan President Nicolas Maduro singing “Wasted Days and Wasted Nights” about economic progress under his iron-fisted rule.