In an effort to combat hyperinflation, Venezuela’s socialist government announced that it will issue new currency notes to help its citizens cope with sky-high rising costs of living.
Venezuela’s failure to deliver Bernie Sanders style Socialism is the single largest economic collapse outside a war-zone since the Soviet Union fell or Zimbabwe’s collapse under Robert Mugabe, according to economists.
On Thursday, the new currency will come out in denominations of 10,000, 20,000 and 50,000 Bolivars. The largest denomination is worth about $8.13 in U.S. currency, a tad above the national minimum wage of 40,000 Bolivars. In comparison, the largest banknote last year was 500 bolivars. In 2016 it was 100 bolivars – which isn’t enough to buy even a cup of coffee today.
It’s hard to fathom, but as recently as 1998 – the year when Maduro’s predecessor Hugo Chavez came to power and introduced socialism, Venezuela was the most prosperous country in South America. In addition, the Latin American nation has many natural resources including gold, oil and timber. The UN estimates that around 4 million have fled to neighboring countries in a crisis that rivals war-torn Syria. The number of refugees is expected to only grow.
The Maduro regime blames the hyperinflation crisis on U.S. sanctions that restricted its ability to export oil. Critics, however, say that mismanagement, corruption, socialist policies and an oversupply of currency have been the main culprits.
At the moment, inflation stands at 1.7 million percent – it is a good lesson for the young generation of socialists in the West as history shows once again that “free things” come at a high price.