Maduro’s Mega 95% Devaluation Roils Venezuela (New FX Rate Tied To Cryptocurrency)

As if Venezuela isn’t screwed up enough, President Maduro keeps on making things worse through his insane central control of a once vibrant economy.

(Bloomberg) — Many Venezuelan shops closed as a precaution as confusion reigned Saturday following measures announced by President Nicolas Maduro aimed at fighting an historic economic crisis in the oil-exporting nation.

The government will enact a massive currency devaluation and an increase in taxes, and will raise gasoline prices. A new version of the bolivar will trade roughly in line with where the black market was, and the government will raise the minimum wage more than 3,000 percent — a level that still only equates to $30 a month.

Tying Venezuela’s currency to the value of its cryptocurrency, known as the Petro, effectively amounts to a 95 percent devaluation compared with last week’s central bank foreign exchange auction results.

“You won’t find the IMF’s claws or ill-gotten prescriptions here,” Maduro said in a speech Friday on state television, referring to the International Monetary Fund. “No experts were involved who do not feel the clamor of the people.”

The new currency, set to enter circulation on Monday, will be called the sovereign bolivar and will be based on the Petro, now valued at $60 or 3,600 sovereign bolivars. The minimum wage will be set at 1,800 sovereign bolivars, Maduro said at the presidential palace, flanked by his economic team.

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The Petro, which will fluctuate, will be used to set prices for goods.

Government plans to raise minimum wage more than 3,000 percent!

Henkel Garcia, director of the Caracas consultancy Econometrica, said the announcements amounted to a head-scratcher. “This series of measures is a mix of incoherent and contradictory ideas,” he said by telephone. “It is a worrying contraption that generates a lot of uncertainty about how it will be executed.”

Ya think?

A coffee of steamed milk with coffee (Cafe Con Leche) now costs 2.5 MILLION Bolivars for a “cup of joe” in Caracas.

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The Venezuelan sovereign yield curve used to be normal under Hugo Chavez’s 2nd Presidential term, but has gotten totally demolished under Maduro’s miserable failure of central economic management.

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Here is Maduro dancing to “Soul Sacrifice” hoping that another round of idiotic economic policies will fix his precious idiotic policies.

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