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Enigmas – or some questions about hyperinflation in Venezuela Printer friendly page Print This
By Pascualina Curcio | Ultiimas Noticias
Ultimas Noticias - Translated and edited by Arturo Rosales – Axis of Logic
Thursday, Dec 6, 2018

Pasqualina Curcio

1) What explanation do the neo-liberal economists have to decipher the decline of the bolivar exchange rate by 558.035.614% from 2013? We have not seen calculations that allow them to explain such "depreciation". Could it be that they have not found a way to include this political variable - which is an "attack in our currency" - in their economic  theories and so they avoid mentioning Dolartoday (website that has consistently devalued the bolivar exchange rate in the black market and is applied by businesses throughout Venezuela thus sparking uncontrollable inflation)?

2) What method of calculation do the monetarists use to justify the value of the dollar as 500 bolivares? For this to happen in any economic sense it requires 21 times the amount of bolivars currently circulating in the economy.

3) Why do they insist that it is the government printing money that is to blame for hyperinflation if the money supply in relation to the size of the economy has declined 91% since 2014? Today, the amount of money circulating in relation to the GDP is just 6% and in 2014 it was 66%. Is this just a tall story about printing excess amounts of money and pumping it into the economy so as to lay the blame at the government’s door?

4) How will the monetarists solve the theoretical contradiction in which they trap themselves when they say that the cause of hyperinflation is the increase in the money supply? Their theory implies that largest amount of “inorganic” money reaches the pockets of Venezuelans and therefore more goods and services are demanded which in turn propels prices higher. Has any Venezuelan demanded more goods and services than in 2013 when, according to the corporate media, people are fleeing the country due to hunger and food shortages?

5) Much fuss has been made by entrepreneurs and their spokespeople to liberate the foreign exchange market and lift currency controls. They pressurized using the argument that they did not have a place where to trade their own currency and therefore could not invest their own dollars. They even dared to say that by abolishing exchange controls, this would stop the incessant attack against the bolivar and capital investments would be made in the country. Now that there is free movement of capital they claim to not have foreign currency and that it is up to the State to “inject capital” into the system. No comment.

6) Consecomercio (retail arm of companies operating in the Venezuelan economy)  is suggesting increases in salaries. They will have noticed that the Venezuelans have lost purchasing power and as a result they will fail to sell their merchandise. Might it have occurred them that such losses are due to the increase of the prices they have set? Why, rather than ask for wage rises, do they not stop the pushing retail prices ever higher? Why not join the campaign to defeat Dolartoday?

7) The economic war against the Venezuelan people has been declared by Donald Trump. There are those who still deny it exists. It will always a great enigma, the antipatriotic attitude of some people.

Pasqualina Curcio is Professor at the  Simón Bolívar University (USB) in Caracas; Economist at the Central University of Venezuela (UCV); Master in Public Policy from the Institute of Advanced Economic &Social Studies (IESA); she holds a Doctorate in Political Science from the Simón Bolívar University (USB).

In recent years she has specialized in investigating the causes of the hyperinflationary phenomenon plaguing the Venezuelan population and it is from her most recent investigative study, Enigmas, that this text is taken.


Translated and edited by Arturo Rosales – Axis of Logic

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