Letter to 2056: What Inflation Feels Like

As part of our sporadic series — The View From 2056 — we send a letter to the future, trying to explain to a not-yet-born grandchild what it felt like to live through the inflation of 2016.

Hey grandkid,

It’s me again, writing you another letter to drain the frustrations of life as a 20-something in Venezuela in 2016. You’re not born yet, of course. Actually, your theoretical mom/dad isn’t born yet either, so it’s all a little speculative. But they will be, and so will you, and there are some things I want to make sure you know about what your grandma went through all the way back in 2016.

When I was young I remember hearing a joke -or, back then I thought it was a joke- about the Argentinean hyper-inflation back in the 80s: “At sunrise people would walk to the bank with a bucket on their hands and line up all day to empty out their bank accounts, only to find out at sunset that by the time the bucket cost more than all the money in it”.

At the time it seemed like a fairytale, but now I get it. I live it every day.

Everybody’s heard the number — Venezuelan annualized 720% inflation projected for 2016  but unless you live it it’s hard to quite grasp what that feels like.

Yesterday I talked to a friend of mine who left the country exactly one year ago:

-“How much is a cachito running for these days? 250 Bolivares?”

– “Last time I checked, Bs.1,000.”

– “Are you sure? That can’t be right.”

– “Yup.”

– “So, what’s the price of a piece of cake in that pastry shop we used to go to?”

– “Last week it was 1,700 but they just adjusted it to 3,000 a piece.”

– “But… It’s impossible… How much does a can of coke costs?”

– “Uh, bueno, there’s no coke anymore because companies ran out of sugar, but a Coke Zero to drink along with your cachito would costs around 500 or 700 Bs.”

– “I can’t believe you, then how much would you spend on an average restaurant?”

– “Hmm, I think around 12,000 to 15,000?”.

The silence made me think that our skype connection had failed, until I heard her broken voice:

– “I don’t know, it’s all so confusing, I used to earn 16,000 a month until I left in July’15… Would I be poor now?”

“Well, maybe you would be earning around 100,000 now”

“But Toña…that isn’t proportional with the price hikes you’re talking about!”

“Well, did you think the whole ‘Dieta de Maduro’ was just a joke?”

Truth is, chamín, that I have been living the craziest year of my life in many aspects, but the economic one is the most painful: Five years ago my salary as a half-time intern was 2,200 Bs (­230$) and today as a full time engineer it would be 150,000 Bs (­150$), that’s why me, and most of my friends, matamos tigres — that’s 2010s slang for finding freelance jobs on the side — in order to make a living. (Well, actually, most of my friends left the country several years ago, but more about that some other time.)

A 2 liter bottle of soda — which I drank on a daily basis until coke disappeared — went from Bs.150 last October to 360 in December, to 500 in February, to 750 in April, to 1,200 in June, to 1,500 in August.

A bit of context, a 2 liter bottle of soda — which I drank on a daily basis until coke disappeared — went from Bs.150 last October to 360 in December, to 500 in February, to 750 in April, to 1,200 in June, to 1,500 in August. You see something similar with most groceries that aren’t subject to price controls: of course, no wage increase can keep up with price hikes at that pace.

Back in January, I went to buy a pack of binder separators and they were at Bs.800. I thought the guy was trying to rip me off and left the store in a huff; Today, at that price, they’d be a steal. The other day I checked again and they were going for Bs.4,000. I got mad all over again, stormed out all over again, then went into the next store just to find them for Bs.90: that store had neglected to revise its binder-separator prices from when they really were a producto de primera necesidad: when you needed them to set up the CADIVI folders to request the preferential rate dollars.

Each time I see a new price increase I stand astonished, but just a week or two later the new price seems normal. I know that sounds silly, but it keeps happening to your grandma! High inflation has a special ability to never let people lose their capacity to be surprised, but at the same time strongarms you into accepting it all meekly.

It all seems like a cruel joke, I know, but it’s real.

The other day I wasn’t able to cash a small check from a client because the piles of bills literally wouldn’t fit in my purse, pockets and hands put together.

Earlier this year we read that the country didn’t have enough money to pay for its money.  Today I bought a popsicle from a guy selling ice cream on the street, and all the bills he had —a huge pack of them— were of our highest denomination note. It makes sense, all his products being priced in multiples of 100: anything in the middle would be silly. The sad part is that the whole package of bills couldn’t buy him a new t-shirt or book even if he was so minded. The other day I wasn’t able to cash a small check from a client because the piles of bills literally wouldn’t fit in my purse, pockets and hands put together.

People’s purchasing power has cratered: even if you rely on super-cheap price controlled products, it’s hard to get by. The new minimum wage in Venezuela buys 480 eggs, while the minimum wage in the U.S. buys 4,700. Pretty much all of our income is now spent on food, and most families I know are living off their life savings — held abroad, of course, as it’s been years since it’s been possible to save in bolivars.

Today, I would need Bs.4,300 to buy four dollars, but my parents could’ve bought a million bucks with the same amount when they were dating. My neighbor bought her apartment in 2009 for the same amount of money she paid last week for its security door. Last week I bought a new case for my phone for three times the price I paid for the actual phone four years ago. I don’t know if it’s the Coca-Cola withdrawal, but recently, more than once, I’ve caught myself daydreaming about possible ways to transfer money back in time.

In the end, kid, I know none of this is comparable with the out-and-out hyperinflation many countries went through in the 20th century: in the 1920s Germany saw its currency plunge from 4.2 marks per USD to 4 trillion/USD in just nine years, in 1985 Bolivia’s annualized inflation was 60,000%, and in the beginning of the 1990s Yugoslavia reached a daily inflation rate of 64.6%.

Thank God we’re not there — yet — but what worries me is that many of the reasons inflation went completely haywire in those countries apply to us, too: money printing, falling exports, nationalization of private companies, a complete lack of common sense from policy makers, among others. Many of the stories from their early years are almost identical to the ones I’m writing about here: Scary. Stuff.

That we’re even talking about Weimar-style hyperinflation as a possibility is scary. But even if it doesn’t end up going that far, the inflation we have is high enough to keep seeping into your day-to-day in ways you’re never really prepared for.

Today, looking through a kiosk near my house (the one pictured up top, in fact), I found a unicorn: three cans of regular coke. Three! Excitedly I took out all my cash to buy them. I thought they would be, I don’t know, Bs.500 each: that’s what they were last month, just before they vanished from the shelves. No dice, the lady tells me they’re 1,100 each. I curb my enthusiasm, realizing I just don’t have the cash. I never do have enough. The lady sees the expression in my face change, and snipes back: “mija, todo el mundo las quiere, nadie las quiere pagar.”

Those cokes have been on my mind all day. When I finish writing this, I’m going to go stand in line for an ATM. The most they’ll issue in one transaction is Bs.600, so I’ll have to stand there and withdraw cash six times to get enough to buy three cans of coke.

And the worst of it is, I’m going to do it.

It may be the last time I find coke all year.

Love you,
Dios te bendiga,

Tu Abuela

María Antonia Marturet

Production Engineering student with an ADHD-driven devotion to writing, economics, social entrepreneurship, catholicism, food tourism and social media marketing. Océano de conocimientos, cm de profundidad.