Photo: Sputnik

What’s the exact value of a bolivar?

You may laugh at the question, but millions of Venezuelans can’t stop wondering as they try to outrace inflation every day. Not only that: trying to calculate and pin it down to a sensible number to, say, exchange for other currencies, might land you in prison.
Over at NPR’s Planet Money, hosts Sarah Gonzalez and Alissa Escarce talk with “Mila,” who used to buy sugar bags to trade for goods and services, and Rubén Galindo, AirTM’s CEO, both criminals in the eyes of the Venezuelan government, for trying to make sense of the country’s currency in the face of a catastrophic economic meltdown.
As Gonzalez tells us: “Think of Venezuela’s money as an unwrapped chocolate bar. The minute it touches your hand, it’s melting, disappearing. So Venezuelans are trying to get rid of their money right away, trade it in for anything at all.”

Venezuelans are trying to get rid of their money right away, trade it in for anything at all.

The podcast touches on some common places in Venezuela’s current crisis, such as weighing stacks of banknotes or buying products like sugar or flour to later swap for whatever you need at the time. It doesn’t add anything to those familiar with the situation, but it’s a fine introduction for those who are not.
Probably the highlight of the podcast is the conversation with Galindo, whose company is an exchange service for currency all over the world. Seeing the country’s problems, he thought it entirely rational to allow Venezuelans access to U.S. dollars or euros, for savings in strong currency.
But of course, “rational” isn’t a concept chavistas love very much.
“They don’t like their people to easily trade their local currency for foreign currency,” Galindo says. At one point, AirTM had 25 employees all over the country, “and all those transactions reveal a very important number: the exchange rate, how many bolivars people are willing to pay for a dollar.”

After the Ministry of Finance told Galindo they could face 15 years in prison, 24 AirTM employees fled Venezuela. Everyone, except Mila. “I didn’t want to. I told Rubén a lot of times, Rubén, I don’t want to.”

A very important number: the exchange rate, how many bolivars people are willing to pay for a dollar.

She eventually followed suit, with her husband and baby.

Why did she put herself at risk like that? “I always wanted to do something to change the story of my country, and I think this is a way, the best way that I can do that, helping the people. They have their way to bring some money to their house.”

Like Mila, hundreds of unsung heroes live as “borderline criminals,” helping those abroad at sending money for their loved ones. Seeing how the government pushes for Schrodinger’s Exchange Controls, only time will tell what plans does chavismo have for this source of money.

Listen to the whole thing at NPR’s Planet Money. It’s worth your time.

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12 COMMENTS

  1. AirTM is itself quite dubious. Ive had my account closed for no reason given but kept about $500 and no exanation given. lots of other similar occurrences.

  2. She’s telling me that they did this out of the goodness of their hearts? Two dozen employees?

    What am I missing here, or what is Jose not saying?

  3. And the disgusting establishment marxists manage to ignore all the eyewitness facts in order to mouth their masters’ talking points:

    NPR host ESCARCE: “Because we’re terrible imperialists, and the socialist president doesn’t want Venezuela to become a colony of the dollar.” Then they promoted recycling in Venezuela (while people starve, oh by the way).

  4. Debating the value of a currency during hyperinflation is like trying to measure the location and velocity of a nanoparticle at the same time.

  5. NPR is well known for its leftist’s views, and they got it right – Venezuelans have become the currency criminal traders of the world. What choice do they have

  6. Both JGV and his endorsed NPR, are either naif or true criminals. I understand the need to have a vehicle to trade currency, I know hyperinflation (Argentina, Peru, Mexico and my loved Brazil). JVG, NPR, and AirTM better check their acting together.

    AirTM operation from Mexico looks ”safe” from a Venezuela perspective. I hope they never operate from the USA.

    I don’t know how the money is kept, safeguarded and what amounts are involved, what banks or ledgers are involved, etc. I don’t think they afford an audit. Is a balance sheet available for instance?

    Bottomline: their money transfer mechanism is illegal and most particularly ”tax free”, and subject to anti-money laundering rules (i.e.OFAC – https://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx) Remember the FAFT has worldwide jurisdiction.

    Watch out, even in Mexico. I don’t think prisons in Mexico fare better than Venezuelan. You’re probably better in a USA jail, nobody is killed for simply trading money outside the official circuit.

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