From our Bureau of Socialist Financial Labyrinths with assistance from our Bureau of Che Guevara’s Dreams
Money is in short supply in Cuba, like everything else. Hyperinflation has caused a shortage of paper currency on the island prison, but Castro, Inc. doesn’t have the funds it needs to print new bills with higher denominations.
In sum, Castro, Inc. is so bankrupt, literally, that it can’t come up with money to print money. In fact, the dictatorship’s economic collapse and hyperinflation have created a situation in which the cost of printing new bills will be higher than the value of the bills being printed.
Vamos bien! Requetebien. Time to whip out the seashells and snail shells used by the islands natives long ago, and to change the name of the national currency from Pesos to Caracoles.
Sociopath Che Guevara once dreamed of doing away with money in utopian Cuba. It seems his dream is now coming true, but not exactly as he would have preferred. And it seems that a pair of collectible Euro bills issued by Spain in 2018 to honor the Butcher of La Cabaña have turned out to be ironically prophetic. See below.
And, by the way, one of these collectible bills is now rare and in high demand, selling for six euros in capitalist Estonia.
Loosely translated from Periódico Cubano
Among the many crises in Cuba is the shortage of circulating money due to the absence of both low and high denomination bills. It turns out that it costs more to print money than the currency itself is worth, this being a characteristic of economies with high levels of inflation.
According to the official newspaper Invasor, officials from the Banco Popular de Ahorro (BPA) and Banco de Crédito y Comercio (BANDEC) in the province of Ciego de Ávila dodged questions from the local press about “the daily amounts that they move, the relationship between withdrawals and deposits, the number of transfers between natural persons that are executed after the limit established for the cards, the issuance of new bills, etc.
Faced with the currency availability crisis, they insisted that there is enough currency to supply, but – according to Invasor – ATMs in the province have a very different reality.
Given the evident reality of the ATMs, the director of BANDEC, Rolando Corbea Sánchez, explained that “an ATM drawer admits 2,200 bills. If you put them by 500, they are one million 100,000 pesos; and if you put them by 20, they are barely 44,000 pesos. Not having, in addition, all the denominations, also limited the amount that one wanted to extract and this added dissatisfaction”.
The problem was also recognized at the most recent session of the National Assembly of People’s Power (ANPP) in Havana, where it was said that the cost of printing and maintaining paper money bills is high. But the strategy that should have been taken since 2021 with the implementation of the so-called “monetary order” was to create higher denomination bills.
The Cuban economist Pedro Monreal explains that “with inflation and devaluation, more bills are needed to buy the same product or service, or new bills with higher denominations, and this is where the cost of printing paper money and the decision on banknotes with a denomination greater than 1,000”.
Taking the informal market exchange rate as a reference, where one dollar is equivalent to 180 CUP, a 1,000 CUP bill would be only 5.60 USD. Therefore, Monreal recommends, one could think of issuing 2,000, 5,000, and 10,000 CUP bills.
Continue reading HERE in Spanish