Venezuela tops world inflation

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According to Blanca Vera Azaf – my favorite economics journalist – an unofficial source confirmed that Venezuela’s inflation reached 270.7% in 2015. This would mean that for the third year in a row Venezuela had the highest inflation rate in the world.

Sadly, unofficial rates are the only ones we have. The last official inflation rate is from December 2014 and after the last changes to the Venezuelan Central Law Bank vía Enabling Law, the Board of Directors has free rein to classify any information as “secret” or “confidential” sin posibilidad de pataleo. In other words: Maduro legalized the unconstitutional kidnapping – for the lack of a better word – of official data.

Another really depressing fact: with an inflation of 270.7%, Venezuela surpasses the 103.2% inflation level of 1996, making the 2015 inflation rate the highest in our recorded history.

According to the leak, the inflation rate for December alone was 16.1%. If we stick to Phillip Cagan’s 1956 definition of hyperinflation – when the monthly inflation rate exceeds 50% – we still have a ways to go.

But with Maduro driving the bus – and Luis Salas navigating – the real question isn’t “where are we going?” It’s “are we there yet?”

12 COMMENTS

  1. Semi official inflation figures dont tally the inflation figure people who actually buy thing on a daily basis experience PERSONALLY and LIVE , These latter figures are much worse ……. The BCV figures may be useful to professional economists but for ordinary people they are just hokum. The inflation experience is compounded by the fact that that most if not all of the volatile prices apply to items which cannot be found or which can only be found with great difficulty and uncertainty.

    For the regime however inflation and scarcity just dont exist , nor do the long lines and desperate searches for dissapeared and necessary items , whatever the bombastic and self serving ( self adoring) statements they make , they live in their own rosy fantasy world where they are the perfect rulers and any problem is blamed on the meanies ( the many many meanies) that conspire to fight their grand achievements ……..they think people are fools or children who suck their thumbs …..!!

  2. Thanks for the definition of “hyperinflation!” What is it called when printing money costs more than the money is worth? Are we there yet?

    • I’ll tell you this: during my recent visit to Maracaibo, I learned that the 1 Bs coin — which is in fact absent from circulation– is frequently used as a packing ring (“arandela”). The center is hammered out, leaving a perfectly suitable ring.

      The alternative is to buy “arandelas” at a hardware store, for 15 Bs a pop.

  3. It appears that the international community is now anticipating a humanitarian disaster in Venezuela that can spread across borders. Proposals for fact-finding delegations to Venezuela are being considered. I’m paraphrasing what I’m reading from multiple sources. It seems that international pressure is building on the regime both externally, internally, politically, and economically. Reminds me of the biblical plagues Moses released on the Pharaoh to “let my people go!”

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