As Maduro announced the withdrawal of the Bs.100 bill, I couldn’t stop wondering, “Why now?”

When you try to answer that question, you realize it was not an impulsive decision by Maduro. The government thought about it, identified the best time to do it, and even had time to plan for it. And they botched the execution anyway.

Even if they truly believe their unbelievable excuse – that they wanted to screw some people that were hoarding Bs.100 bills outside Venezuela – it’s an odd time to do it: in the middle of the (admittedly withered and depressed) holiday season, when people spend more.

What’s the rush? Couldn’t it wait until January?

No, it couldn’t wait. Because once the Bs.500 bill was in circulation in mid-December, withdrawing and reneging on the Bs.100 bill in January would be a fool’s errand: those supposedly hoarding bills would by then had the chance to exchange them for the less cumbersome note. January was not an option.

November, or before that, wasn’t an option either, since it would leave the economy without close to half its bills, and 77% of all the value of cash, for at least a month until the new 500Bs bill was ready.

The only logical window to carry out their illogical plan was then just before the 500Bs bill was due hit the streets; the days before December 15.

They timed it just right.

But timing and execution are not the same thing. The process was chaotic and, as the chart below shows, the fact they knew they would kill the Bs.100 bill soon didn’t stop them from wasting money printing new bills.

The number of Bs.100 pieces in circulation increased by 15% in November. In one month, 782 million new Bs.100 notes went into circulation…to withdraw them in December.

A short walk in the outside world, before burning them.

The chart also shows that although the timing was just right for the government’s plans, it was the worst time for everyone else. See those spikes? That’s November of each year, which is typically followed by another good-sized increase in December.

They knew that the end of the year was a terrible time to drain the economy of cash: they know it’s when people use it the most, to the point that they plan for it every year.

They just didn’t care.


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  1. So, what if the plan is to replace cash with debit cards? Cards that can be given to loyals and refused to oppos. Cards that render the black market in dollars useless. How can you sell e-Bs for foreign currency?

    • Small-size transactions don’t really move the black market dollar. It’s the large transactions (some carried out by corporations for coverage/hedging or to pay for imports, in Caracas, not in Cucuta) that really move it. Maybe in Cucuta they use cash for foreign exchange transactions, but it’s not like that in Venezuela. People and companies mostly use their bank accounts to transfer bolivares to pay for dollars.

  2. I think there are more to this.
    Why the 100 Bs bill and not the others.?
    Why so short amount of time to do this?
    Why the official statement on the supposed hoarding of bills conspiracy?

    If higher denominations are being introduced, how that would fix the hoarding of bills in the future?!

    I think we will know the real answers in the coming days.
    Or perhaps we are giving too much credit to Maduro regime rationality, if there is any.

    BTW, this is just another distraction for the opposition that should focus instead in getting rid of Maduro.

  3. They will do what they always do. Attack!! They always go forward, they never go backwards. When they are in trouble, they always seize the initiative, just like the best chess players do. In chess the best defense is always the most active one. If you are able to create threats even when you are in a worse position, then you increase your chances of drawing and sometimes you can end up winning. Likewise, when you are attacking, you can’t stop, you have to keep pushing until the end, because if you stop you may allow a counterattack. We could actually learn a thing or two from them them about tactics and strategy. I am afraid that they know what they are doing and, unless we find a way to make real, credible, pertinent threats, they will end up with absolute control of the venezuelan people. We lost too much time with the wrong strategy, we were extremely passive and foolish. We need leaders that actually understand politics, and who understand what the word suprastructure means, and also what hegemony means. This is urgent.

  4. I doubt they believe the money hoarding thing, it just doesn’t add up.

    Most of the money is not cash, so restricting some liquidity to curb inflation is not what they’re after.

    Epic scale money laundering operation? Don’t know why would they make it so messy, it’s not like thy need to be discrete anyways.

    Maybe #cafetalera suspensión de garantías? In december? Would be weird.

    I don’t want to underestimate the enemy, but maybe this is just a dumb move? Help!

    • It is not a dumb move. They decided it is the best time to seize complete control of the population. This is not about economy, this is about destroying us and making sure we never rise again. That’s what you do when you simply realize you have absolute power and no resistance. They smelt blood and now they are finishing us. If we don’ t respond now, we are lost. Well, we are lost since we decided to ignore common sense and chose a suicidal strategy. The sad thing is we don’t have the right leaders for a proper reaction, so now is only madness.

  5. The article claims the number of 100 bills were increased in November without citing or linking a source. Where can I doble check this information?

  6. What little support was left in the country for those in power has now been mostly obliterated. The had to know this would happen.

    I deal with Chavistas every single day as I operate a bodega in a rural pueblo with no bank and everyone is pissed. I had one guy ask me, “how am I supposed to deposit the 30,000 bs I have to my name when I don’t have a bank account and can’t afford to pay for transport? Besides, while I’m in line at a bank waiting to be told there are no 50 bs notes to pay me for my 100 bs notes that I can’t deposit, my neighbors are robbing my house or my harvest which is due”.

    I think something big is going to happen soon. It’s obvious to me that there is zero intention for this crowd to hold elections in 2017 (not that they ever intended to do so). Both the government and the opposition need to be watched closely for signs of what’s coming. If the MUD does indeed fracture, it’ll be because each group senses that things are about to bust wide open and want to position themselves as well as possible.

    God help us all. January is going to be an experience.

  7. Your regular John Does, the poorest and unbanked people are being left without savings. The government when blaming the hoarding mafias is recognizing that they let them exist and grow but the poorest pay the consequences

  8. The element of surprise frequently works well against one’s enemy–but, not if he enemy is yourself….In any event, the results of this operation without anesthesia are the crippling of the already hobbling economy, as the 40% non-banking/50+% informal economy workers poorest segment of the population paid/purchase food/pay for CLAPS/even ride public transport–so, it’s hard to believe that this is part of Machiavellian planning, rather than just sheer typical Venezuelan/Chavebestial incompetence. And, /once again, if the Pueblo/Military/MUD takes this lying down, then they are definitely ripe for being trampled on by full Cubanization..

  9. I’ve read several times the article and I still can’t wrap my head around it, because the “hoarding mafias” excuse isn’t true, not because they claim that, but because at any time the new bills enter the market, the mafias can just go and hoard them, it isn’t simply applicable at any level.

    The other reason, about leaving the people without cash for too long, well, that doesn’t seem to fit them either, because they can just start unleashing the colectivos and their other paramilitary groups to kill some protesters to scare the rest into submission.

  10. As bad as i hate to see whats happening in Venezuela, what a lesson in Economics and Governing powers you guys are giving . Its not often one can watch the gradual collapse of a country in turmoil. A conspiracy ?? What a predictable excuse, but who else can they blame things on ?? It seems that the people who are hurting the most are the same ones that celebrated before. I think this regime will hold on to power like a pit bull to a chicken, I fear the solution !

  11. The biggest enemy of the Venezuelan people is fear.
    Maduro and his regime are ruling with fear. I was taught at an early age to never put someone in a position where they have nothing to lose. That is when they act irrationally.
    The Men in Venezuela have proven that not to be true.
    How many more children have to die of starvation or lack of medicine before someone finds some courage? How many more people need to be murdered on the streets of Caracas before someone realizes that there is a difference between living and surviving?
    How many more times will someone say “Someone must do something.”, before they realize that they must do something?
    Act individually. Act in small groups. Actions of small groups will empower more people. Yesterday’s protests proved that.
    Make every PSUV member worry about the safety of their families. Make them afraid to be on the street. Everyone that supports Maduro is an enemy of the Venezuelan people. Make every policeman fear for his family’s safety. Let every policeman and soldier understand that their support for Maduro puts them and their family at the same risk as the opposition’s families are in. Make the Supreme court judges understand that their injustice will not be tolerated.
    Do not wait for these people to be brought to justice. Bring them to justice now.
    If Monday morning every driver made up their mind to run over every policeman and soldier that they saw on the street and took their weapons, the whole game would change in a day. These cowards bravely beat women and shoot unarmed civilians. They will not be as brave when people start shooting back.
    A courageous man dies once. A coward will die 1000 deaths.
    Make a personal decision today to put an end to this dictatorship. History is full of stories of heroes and cowards. How will you be remembered?

  12. Why would anyone be interested in hoarding Venezuelan currency? A good reason to stockpile anything is the prospect that its value would eventually rise. Is that expectation reasonable? The parallel value of the currency recently reached a low of BsF. 4000 to the dollar in contrast to its implicit value, based on the country’s reserves, which is five times greater at BsF. 800 to the dollar. With a change of variables it is reasonable to expect that the value of Venezuelan currency could increase in the future.

    The growing uncertainty, extrapolated from the government’s ever growing mishandling of the economy, is the main factor for the price of the dollar rising in the parallel market. If economic variables change radically, as applied by another government or this one, the breach might disappear between the implicit and parallel value of the currency.

    Eliminating the BsF. 100 bill from circulation has reduced liquidity which has produced, as could be expected, a short-term revaluing of the bolivar against the dollar in the parallel market. But the measure has also produced much higher economic uncertainty which in the long term will most likely continue to erode the value of the Venezuelan currency.


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