How to Create 6,111,708,711 New Problems

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During a rambling speech today, Nicolás Maduro declared all Bs.100 banknotes will cease to be legal tender in 72 hours. The reason? To deal a blow to cash-trafficking mafias in Cúcuta, the Czech Republic, Ukraine, Germany, and Brazil that would be too slow or too scared to exchange their old bills for new ones.

This is way-out-there voodoo nonsense. In what world is hoarding the world’s fastest-depreciating banknotes a cunning business decision? Only in Maduro’s bizarre #TropicalMierda imagination.

It’s true that there is a premium on cash money in Venezuela right now. It’s there because the entire stock of physical bills is worth a pathetic $186 million at the black market rate, or $5.91 per capita. This is way less than a functional economy needs.

The cash premium is yet another crippling economic distortion. It exists because the Central Bank refused to issue new, higher-denomination banknotes for an irresponsibly long time. It has nothing to do with the evil mafias of PSUV’s fevered imagination. If there’s anyone out there hoarding/trading cash, it’s a consequence of the cash shortage, not the cause.

Maduro’s statements were all-over-the-map, but he intends to replace the old banknotes quickly to make the cash-mafias go bust. He floated contradictory 72 hour and 10 day timeframes to replace the bills.

Confuse thy enemy! The element of surprise! Brilliant stuff…

In any case, take a look at the numbers. They’re crazy:

  • There are 6,111,708,711 Bs.100 banknotes in circulation (about 194 per capita). Bs.100 bills only make up 47% of all banknotes by number, but they account for 77% of the value of all bills.
  • To withdraw all of these 6.11 billion bills, the banking system would need to soak up:
    • 84.9 million bills per hour working round the clock for 72 hours (no going to the toilet)
    • 76.4 million bills per hour working for 8 hours a day for 10 days
  • The 6.11 billion bills take up a volume of 6,901 cubic meters.
    • That’s a stack of bills 667 kilometers long. That happens to be the exact distance between Caracas and Cucuta. Coincidence? I think not!
    • That’s an 83 x 83 meter square packed a meter high with banknotes, or a professional soccer field 1m high in bills.
    • Or it’s a 19 x 19 x 19 meter cube of bills.

Good luck with your plan, Maduro! The numbers certainly suggest you’re not going to be able to withdraw the notes in 72 hours or even 10 days.

¿O se olvidaron que mañana es lunes bancario?

41 COMMENTS

  1. Chávez woke up evry day thinking “What can I do today to fuck up more the life of venezuelans?”

    Marudo wakes up every day thinking “What can I do today to put a bigger turd than yesterday?”

  2. What I came for is an explanation of why they are doing it
    Even when they do act in an incredible evil way or in a incredible stupid way, there is often at least some sort of justification on why they are so evil or stupid.
    This one is either being an asshole just so the can go “muahahaha” or so retarded you wonder how they can breath.

    • Yeah, that was the double aa bills, I remember those, they disappeared as fast as people got there hands on them. To go to columbia, to bleach and make counterfeit US bills. Worth more as paper then as currency because the paper had a special similar quality. But what are they doing with the rest of the bills? Whats going on here? What am I missing? Is it really still flooding out of the country or is it just that the few bills that are in circulation are just being held by a small percentage of the population that are trying to prepare for christmas and have a few million in cash at home cause they are tired of the fucking drama of day to day fighting to get your hands on enough cash to buy the shit you need to survive and christmas is coming and you need to buy christmas gifts and food and shit and you need cash cause the power is out all the time and the phone lines are down all the time and peoples punto de venta is broken down and if you don’t have cash you lose out? Poor people don’t give a shit, they are probably thinking, good! Those assholes will all that cash are going to get fucked, I don’t have a penny so I don’t give a shit. What the fuck, this is fucked, what’s going to replace those 100 in the next 3 days? 50’s? What a fucking gong show, please someone wake me from this dream.

  3. Yeah its obvious he forgot that tomorrow is a bank holiday, you can see it by the look on his face when someone from the audience yells out Manana es dia bancaria.” Not to mention that the funniest part of the whole speech in my mind was when he says: “you can keep your warehouses full of money.” Of course they are going to keep it you fucking idiot. The paper is worth more then the value of the note. They already got it out of the country, they paid 10% more then face value to accumulate it. Why would they give it back? They obviously have a purpose for it and they didn’t pay anymore for it then they absolutely had to. Is there some darker plan here? The only people that this is going to fuck is the pueblo. Who haven’t had power for a couple of days, haven’t watched the news cause they don’t have a tv. And if they did have a tv, they didn’t have time to watch it cause they are too busy cleaning up flood damage, or preparing for the next flood….in the fucking dark, cause the power went out all night…again. Are people going to stop accepting 100 bills now? Afraid to be the last one holding the buck when the music stops on this fantastic game of musical chairs? I find myself fantasizing that some guy walks in while he is talking that stupid verbal diarrhea and puts a gun to his head and sprays his shit all over the wall and all of Venezuela stands up and gives the lone gunman a standing ovation.

    • For good reason, condoning violence is generally impermissible on this site. But please tell me if your fantasy happens prior to Jan. 10. 2017? It deals with the next POS, I mean POV.

    • ” I find myself fantasizing that some guy walks in while he is talking that stupid verbal diarrhea and puts a gun to his head and sprays his shit all over the wall and all of Venezuela stands up and gives the lone gunman a standing ovation.”

      That’s why Maduro’s ordering the sebin, aka the “bullet-to-the-forehead corps” to stand watching in every bank accross the country.

      • Watching for what? Criminals and prans depositing their mass amount of cash? I might actually respect that stupid fucker a little more if he wipes out all the big boys that are making our life so miserable…that would however leave no one to oppose him. Or am I totally out to lunch? You seem to know shit man, spill it, what do you know?

    • Thanks!!! No idea about the # or timing of new banknotes. To be frank, I think they are just as clueless. Their motto: one day at a time, como vaya viniendo vamos viendo.

  4. If my calculations are right the max value of the new 20,000 Bolivar note will only be 5 bucks. That’s it. That’s the highest denomination note out there. Couldn’t they have at least printed-up some 100,000 Bs notes? Twenty five bucks. I mean, like, how long is that 20,000 Bs note gonna last? These people are nuts.

  5. The objective is impoverishment and confiscation/destitution. Impoverished people will kowtow to all powerful gobielno bolibanano for a rationing card. The commoner will get stuck with worthless paper and enchufados will buy it at discount to be exchanged after time limits. The ones who are able to deposit some in government banks will get “correaleados” for their diligence. All commerce will grind to a standstill and will expropriated for “collaboration with the enemy”.
    May you live interesting times …

  6. It’s kinda obvious they’re not going to succeed on swaping all the banknotes (they probably don’t have the proper amount of 500 Bs notes + 100 Bs coins and for sure they don’t have the logistics for doing so) which will conduce to deposit most of 77% of all the cash in Venezuela’s public bank, what is terrifying is what will come next to that: a corralito? Who knows

  7. Just for fun, read some of the international press articles about this. I had a good laugh watching the journalists trying to turn a story which is essentially incoherent into a news article which appears coherent… and failing miserably.

    • Of course the plan is not to receive all the money, it’s a mere scam. It’s like buy stuff on credit and then claim “I won’t pay”.

      I explain myself: every banknote issued by BCV should be an obligation to BCV, at least that’s you might infer from the legend “pagadero al portador en las oficinas del banco (something like payable to carrier at the bank offices)”. Then after BCV issued X amount of banknotes they’re now planning now not to acknowledge part of it because those banknotes are under possesion of people they don’t like (according to Maduro colombians, brazilian, and some other foreigners). Not even Maduro questioned if those foreigners managed to earn the cash by valid means, which in any case would be really to rob their assets because of their nationality.

  8. One of these days he’s going to piss off someone that’s not going to take it lying down.
    What about all the prans and colectivos that are sitting on stacks of Bs.100 bills that are now worthless.
    They can’t take them to a bank and explain where they came from.
    They’re going to be pretty upset.

    What about all the taxi drivers charging fees in the thousands that can’t work until people can ge their hands on the new bills, especially outside Caracas.

    Hopefully someone somewhere will be pissed off enough!

  9. This money is not printed overnight, if there’s a way to figure out when they gave the go ahead to the production it might explain a little why did they keep the design and low denomination bills.

    4.5 bucks is not a high enough bill in a highly inflationary economy.

    On the other hand, the company(s) making these notes has experience in handling clients with hyperinflationary economies, we sure make a great customer…

  10. Has anybody thought what are you going to to with a bag of 100 Bs coins ? If you need a knapsack or rucksack today when you go to a bank either to deposit or withdraw cash, with these coins you will need luggage with wheels … Unless they have available all the bills… There are hints that the only new bills available will be 500 Bs…

  11. To import 1st world solutions to 3rd world societies don’t always work.

    Anyone living in South America knows that most poor people (as someone has already said above) don’t have bank accounts nor credit/debit cards.

    One thing is to ban cash in a country like Denmark ( http://fortune.com/2015/05/22/denmark-paper-money/ ), another completely different is to do that in Venezuela or India. That’s just plain stupid and will make people (above all the poor) suffer a lot.

    • Well, the main difference is, in India they plan to ban cash. In Venezuela the thing is running out of cash. So probably will achieve the cashless society faster than India, just by economic mismanagement.

      Which also saves on having to actually think on solutions.

  12. Assuming you have a money counter (that works!) which can process 1200 bills per minute, you would need 5.1 million minutes to process that volume of cash.

    You would need 1180 of these machines running 24×7 for 3 days to process the money in time if it all went as planned… which it won’t.

    So lets say you double or triple the number of money counters to 3600. (because it takes time to load them and deal with human factors (going to the bathroom, having lunch breaks…. “stuff”)

    There is no physical way to move that many people through the system that fast. Impossible.

    It only goes down hill from this point.

    • My fears exactly. The bully feels so safe and so confident his victim (venezuela) is broken enough (mentally and financially) that has stepped up the abuse.

      Serves them to complete the social control and to demonstrate their power to the bullied.

      Venezuela needs to step up and fight the occupation or face misery and shame for generations to come.

      Asking for foreing help is also required, but no one is going to help for free. Nations have interests and not friends.

      Its is interesting to me how Colombia and Brazil stranded to gain respectively on this , but now days seem to be both internally engaged in deep turmoils of their own, Re. Resistance to the Farc’s fact track, and the leftist corruption shake down….

      Waht is common to all three countries? (Cuba)

  13. The North Koreans did it a few years ago. The NK government soon regretted it, and the senior official they scapegoated was shot.

  14. I don’t see why everyone is so upset. As NM says, this is a golpe duro against those fetid mafias in Germany/Czechoslovakia/Cucuta that have been manipulating/minimizing the value of our sacred Bs.100 note, not to mention the Ngo/UsGovt/Mud, which have their fetid arm up to the elbow in the rear door of the frontera in this business. Why, everyone present in NM’s alocucion stood up to applaud, and chant, “Asi, Asi, Asi Es Que Se Gobierna!.” Anyway, the fetid Bs. 100 note will be replaced by a weighty coin, which, unfortunately, no one present had a sample of when asked, but, not to worry, since it was recently announced that the Venezuelan Casa De La Moneda will be in charge of fabricating all Venezuelan currency from now on (thereby eliminating the need to pay that pesky debt of some $600mm owed to reputable international currency manufacturers for past Venezuelan currency emissions). And, no more need to carry stacks of increasingly worthless Bs. 100 bills which deteriorate physically, when you can carry bags of weighty increasingly worthless coins which will maintain the shine on Bolivar’s face, and will promote another of Venezuela’s key industries-the neighborhood tailor, busy repairing/replacing pants pockets. As for the 30+% of the Pueblo with no bank accounts who will be left high and dry during this joyous Chistmas Season, why, in the words of the Comandante, if you’re needy, you are justified to steal, but, this time, be sure its physical merchandise (skip toy importer Kreisel this year, the Govt.already stole them into bankruptcy, by confiscating 4mm Christmas Season warehoused toys, as they also did your friendly neighborhood shoe store, by forcing retail price decreases of 30-50%)….

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