Grid failure and hyperinflation are causing havoc in Venezuela as the country’s currency has become worthless. (Photo Credit: Reuters)
Grid failure and hyperinflation are creating a barter economy in Venezuela. To elaborate, Venezuelans with no cash and electricity must barter to survive.
For instance, signs in market stalls say “barter”, The Guardian reports. The barter signs mean that people can trade items for food and other essentials instead of paying cash.
Venezuelans are bartering because cash is unavailable or worthless. In fact, a kilo (2.2 pounds) of meat costs 15,000 bolivars at a Caracas butcher shop.
The bolivar is Venezuela’s worthless currency named after the country’s founding father Simon Bolivar. Nevertheless, many Venezuelans have not seen a bolivar in months because the banking system is collapsing.
Families Cannot Buy Food Because Of Grid Failure And Hyperinflation
For this reason, many Venezuelans use cryptocurrencies such as Bitcoin or even U.S. dollars to pay for food. However, you can only access digital cryptocurrencies through the internet.
So, cryptocurrencies are not available if there is no electricity. This means that many Venezuelans could not buy food during a massive blackout last month. Electricity went off in 18 of Venezuela’s 23 provinces on March 7 because of problems with a power line.
Under those circumstances, barter and foreign currencies like the U.S. Dollar and Euro were the only ways Venezuelans could buy food. Moreover, many merchants in Venezuela refuse to take the bolivar because of hyperinflation.
For example, a butcher in Caracas (Venezuela’s capital) admits over 10% of his business is in dollars. Specifically, many people buy meat with dollars sent by relatives outside the country. Notwithstanding, families can only send money if there is electricity and the internet is working.
Families Turn To The Black Market To Survive Because Of Hyperinflation
“All this government talk of American imperialism and now we have to use dollars,” Celina Bareto tells The Guardian. Tellingly, Bareto and her daughter were using dollars to buy vegetables in Caracas.
Oddly enough, the two are technically criminals because it is illegal for Venezuelans to possess foreign currency. However, hungry Venezuelans widely ignore that law and a ban on cryptocurrency.
“I keep all of my money in Bitcoin,” Venezuelan economist Carlos Hernández admits in The New York Times. “Keeping it in bolívars would be financial suicide.” Particularly, Hernández acknowledges that he uses Bitcoin to feed his family.
Unfortunately, Hernández cannot access his Bitcoin during blackouts unless he has a backup power system. Yet, Hernández could use a solar electric system to power a satellite phone to access his Bitcoin in an emergency.
Grid Failure And Hyperinflation Turn Venezuelans Into Criminals
Hyperinflation is turning many Venezuelans into criminals because they want to feed to their families. In essence, hyperinflation is an economic crisis in which prices rise by over 50% a month.
Venezuela has hyperinflation because socialist President Nicolás Maduro is printing money to pay for his government. In particular, Maduro prints bolivars to pay his military, buy weapons for the military, and fund social programs to buy votes.
However, Maduro is bankrupting ordinary Venezuelans by destroying the value of their money with hyperinflation. In fact, the government pays many Venezuelans, including soldiers and government workers, in bolivars. As a result, Maduro forces ordinary people to finance his government through hyperinflation.
In addition, politicians, generals, and government officials in Venezuela cash in on hyperinflation by exchanging the bolivars they print for other currencies. As a consequence, Maduro and his cronies get rich while ordinary Venezuelans cannot buy food.
Maduro’s government currently has no incentive to end hyperinflation. According to The Miami Herald, U.S. prosecutors allege that Venezuelan politicians have made billions of dollars through foreign exchange.
Democrats Want Grid Failure And Hyperinflation In America
Americans must prepare for grid failure and hyperinflation as well since many Democrats plan socialist policies similar to Maduro’s.
For example, Democratic leaders like U.S. Representative Alexandria Ocasio-Cortez (D-New York) are embracing Modern Monetary Theory (MMT). In detail, MMT believers think the government can pay for gigantic social programs by printing unlimited amounts of money.
Significantly, critics deride MMT as the “magic money tree.” For instance, liberal Nobel Prize-winning economist Paul Krugman calls MMT a “recipe for hyperinflation.”
In short, Americans could face hyperinflation and grid failure soon. After all, socialist Democrats like Ocasio-Cortez and U.S. Senator Bernie Sanders (I-Vermont) could be in control of the White House and Congress in January 2021, less than two years from now.
Smart Americans will prepare immediately for grid failure and hyperinflation with stockpiles of essentials, new technology, gardens, and backup power systems. Such preparations today could help your family eat in a few years.
You may also enjoy reading an additional Off The Grid News article: Grid Failure Devastates City In Collapsing Venezuela
Or download our free 28-page report on the top 9 threats to the power grid: Black Out
Do you have any more thoughts regarding the ongoing grid failure and hyperinflation in Venezuela? Let us know in the comments below.
The post Grid Failure And Hyperinflation Lead To Bartering In Venezuela appeared first on Off The Grid News.
This article first appeared on offthegridnews.com See it here