Government Paralysis Even At The Simplest Levels In Venezuela
That ideology screws up the implementation of the Venezuelan Government’s plans is obvious. What is incredible is how the belief that the anyone can do anything (Chávez was President, Maduro follows…) has led to the total destruction of the Government. There is no longer institutionality. As people have been put in charge of institutions they had no clue about, the decision making process has ground to a halt. We are not talking about rocket science here, we are talking about simple things like printing currency, for example. A function the Venezuelan Central Bank used to cover rather efficiently. As inflation increases and monetary liquidity goes up, you have to print bills in higher denominations. It’s sort of obvious and as long as there were some technical people left at the Venezuelan Central Bank, it was routinely done.
Then the revolution and with it some military officers, arrived…
And a friendly reader who has some some form of contact or works at the Central Bank, sent me some slides of a report that has been circulating at the Central Bank for apparently quite a while.
The report enunciates the problem rather simply: From 2008 to 2011 bills in circulation in Venezuela increased in value by 210%. The report, which apparently was done in 2012, predicted similar growth in 2011 to 2014 of 192%, coming up short, but that is in the end a minor detail.
In 2011, according to the report, there were 1.6 billion Bills in Venezuela, that is 55 bills per citizen. Of these, 40% were in Bs. 50 and Bs. 100 bills. But, these two denominations represented 82% of the Bills in Venezuela by value. Thus, the report predicted, without really expecting it, that these bills would become 95% of the bills by value by 2016 if nothing was done. (Nothing has…)
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