It’s the Catatonia, Stupid

/ August 6, 2015
Things that are worth more than a Bs.100 bill...

Things that are worth more than a Bs.100 bill…

These days, if you’re looking for reasons to be alarmed about Venezuela you’re spoilt for choice. But if I had to pick one, just one signal that’s freaking me the hell out right now, it has to be the government’s dogged refusal to issue larger denomination bank notes.

Lots has been written about the insanity of having the highest denomination bill in your country be worth less than a nickel-and-dime. It is, on its face, a purely self-destructive decision: chavismo in self-harm mode.

In a country where a lot of operations are still cash based, the Central Bank literally can’t print Bs.100 bills fast enough to satisfy demand. In Zulia, they’ve had to cap the amount of cash you can withdraw with a check at one go. These aren’t capital controls, mind you, just a pragmatic patch on the problem of not-having-enough-banknotes-on-hand.

It’s ridiculous. The last few foreign tourists intrepid enough to risk the trip to our country get a kick out of taking selfies with the bank-notes they get in return for a single Ben Franklin.

P1030312

This is how many bolivars you get back, 14.3 cents at a time, for a $100 bill these days.

The government’s refusal to deal with this insane situation is troubling, and not for the usual reasons. It’s not that they’re blinded by ideology or horribly incompetent at macroeconomic management or somehow profiting illegally from the distortions inaction creates.

The normal ways we’ve learned to make sense of government irrationality won’t cut it when it comes to the refusal to issue a Bs.500 bill, or a Bs.1,000 bill, like we used to have back before we decided to lop off three zeroes from the currency because things had gotten ungainly…

Tiempos Aquellos...

Tiempos Aquellos…

Something else is at play.

It’s not that issuing higher denominated bank notes would solve any of our macroeconomic problems. It wouldn’t. The deficit would stay the same, inflation would stay the same, nothing that matters would change that much.

It’s that printing higher denominated bills would make coping the day-to-day practicalities of the macroeconomic shit show slightly less aggravating for everyone at basically no cost to anyone.

The government’s refusal to do even that much says volumes about its steely determination never to capitulate to reality.

tumblr_lfp9x7klKz1qfcbfro1_500It speaks to the absolute collapse in its capacity to make even marginally reasonable decisions, decisions that cost it nothing, harm no one and relieve some part of the burden of living day to day amid the economic chaos its policies have created.

In other words: it’s the catatonia, stupid.

Bad government? Old story.

Criminal government? We’re used to that!

But catatonic government? That…that’s new.

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85 thoughts on “It’s the Catatonia, Stupid”

  1. Demand for high currency bills has soared so much that banks can run into problems if printed money is not readily available. Today banks in Zulia state have had to impose withdrawal restrictions for that precise reason.

    http://www.panorama.com.ve/politicayeconomia/Banca-limita-a-un-maximo-de-40-mil-bolivares-en-retiro-por-cheques-20150805-0105.html

    Credit and debit card transactions are not affected whatsoever.

    P.S. Bite your tongue before calling this “corralito”. Just don’t.

    Liked by 1 person

  2. Perhaps they are seeking to emulate the early Bolsheviks, and eliminate money entirely. That policy didn’t work for Lenin and his fellow zealots. Even North Korea has reconciled itself to money as a principal medium of economic exchange. Alternatively: perhaps they don’t want to look like Zimbabwe, which was issuing trillion (Zimbabwean)-dollar notes before their whole crazy scheme collapsed.

    Liked by 1 person

    • Well, Chavez always dreamed of having a barter economy and now they are getting it. You’ve got to hand it to him; the man had (a twisted) vision

      Liked by 1 person

  3. I believe it’s psychological for the Pueblo. One can see this in the banks, many relatively poor people depositing (street vendors/et. al.) big wads/stacks of bills, others withdrawing, even pensioners, similar=a feeling they have a lot of money (irrespective that its buying power is zilch). Many in the Pueblo still think in the old “millions”, and refer to income in these terms, as in, “I collected my 7+million monthly pension today,” something impossible for them to have achieved in pre-Chavismo stronger currency years. I believe Argentina’s largest bill, also, has low real value, perhaps for the same reasons.

    Liked by 1 person

    • That’s an interesting point, but this wealth illusion totally falls apart once you realize you can’t even get a decent pair of shoes with those “siete palos”.

      Liked by 1 person

      • True, but the Pueblo’s illusion is one thing, reality another–“Chavez Vive, La Lucha Sigue”–“61 anos Repartiendo Amor, Cosechando Patria….”

        Liked by 2 people

    • Dont think thats the case because meeting old pensioners and humble people at banks they laught at how the big bunch of bills is so meaningless when inflation is sky rocketing so those bills dont really buy you anything , people are not as dumb as we sometimes make then out to be , most of them know exactly what is happening . The fact that now it takes a big bunch of bill to buy even insignificant things poignantly and clearly brings home to them the way the govt is debauching the value of the currency.

      Liked by 1 person

      • You need to go out more to banks that primarily deal with the poor, as well as talk to those shopping at Mercal–of course there is awareness to some extent of the valuelessness of local currency, which awaremess would become psychologically much greater upon receiving 15 Bs. 500 bills for your monthly pension, instead of 75 Bs.100 bills.

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        • The banks I go to are full of old pensioners and younger people with their beat up motorbike helmets and old discoloured mochilas under the arm , they are far from rich , but the complaint is the same . the bills are worth nothing . People who go to mercal dont think they are rich because of the number of bills they carry , they know they are poor and geting poorer . But let one of those guys get a hold a single dollar bill and they feel like millionaires.

          I think the true test of how they feel is when they compare what they used to be able to buy one month ago and what they can buy now. I hear their conversation for example when they stand before some tuna cans which they were lucky to find in some isolated aisle . The counters at the markets are full of abandoned merchandise much more than before , thats because people dont have the money to complete the purchases they have chosen and have to leave behind the stuff they can no longer buy. That comparison between the before and now is clear and painful. nothing you can paper over using bigger bundles of low denomination bills .!!

          If some of them continue supporting the regime despite its evident failures its because they identify with it and its foibles and florid rages for reasons related to their warped psyche not because they are fooled into the belief that they are now better off than they used to be. Look at the polls , they know the govt is failing to provide people with what they need and by a significant mayority blaming them for it. !!

          Liked by 2 people

          • Bill,

            When you say: “…The counters at the markets are full of abandoned merchandise much more than before , thats because people dont have the money to complete the purchases they have chosen and have to leave behind the stuff they can no longer buy”

            What are you referring to? This contradicts all the scarcity news, etc. So, are you talking about private supermarkets or supermarkets that might be better stocked than others? Or is it in just one particular type of product that happened to be available at that time?

            If what you suggest is becoming more and more usual (i.e. abandoned merchandise) then it means that the amount of currency printed has finally knocked down purchasing power for good (but this we already knew). However, this would only apply to goods and services sold at a price which is not fixed by the govt. or goods where the govt has fixed the price but recently adjusted it upwards. Anyhow, I am still a bit puzzled by what you describe. Has the govt. increased the price of goods sold in public supermarkets recently? Obviously the price of everything else (non-controlled) has also increased so it could be that consequently someone could run out of money to buy food. But then, this would be the last thing you would want to stop buying… And also, if you could buy it and sell it to make money out of it, then for sure it doesn’t make any sense at all that there is abandoned merchandise….

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            • When he said “…The counters at the markets are full of abandoned merchandise much more than before , thats because people dont have the money to complete the purchases they have chosen and have to leave behind the stuff they can no longer buy” he describe these situations:

              a) Effectively, the government-regulated-price goods have seen an increase in its prices, the official data for the inflation index INPC is referred to the goverment-regulated-price goods and the subsidized prices in the State supermarkets (you know Mercal, Bicentenario, PDVAL, IPSFA) so as goverment stopped the publication of data in february 2015, at least between february 2014 and february 2015 the prices in the regulated-prices basket of good rose in about 66%, but the rate was higher for the food and transportation, being in food higher than 100% in the period and in the official records.

              b) Many people has to abandon items in counters because is getting more and more frequent the shut down of the electronic ways for payment (sometimes is the system, others the bank can’t response the POS dial, sometimes is the POS itself is broken and the supermarket couldn’t find how to replace it as banks don’t provide new terminals). So, if you don’t carry a box with 100 or 50-bills you have to priorize and abandon what u can’t pay with the cash you are carrying in your backpack (you know 10 000 VEF doesnt’ fit in a wallet).

              c) Sometimes is the policy of just 1 or 2 of this or that product, so if you pick 2 and that day the supermarket only authorize to sell 1 per person, you have to leave the second.

              d) Sometimes is the policy of asking for your ID (not a fotocopy, and valid-time one) i have seen people who just has to leave the queue at the supermarket because of that, sometimes the ID asking is just to sell a selected group of products, the regulated and scarce ones.

              e) Much of the time the reason is, as you can’t find in a supermarket govm-reg-price goods you have to buy the non-regulated, and as prices rises about 10% weekly, you’ll find yourself with less capacity at the counter than the previous week, and of course you have to leave what you can’t buy with the money (in bank, or in bills if condition b applies) you have.

              Goverment-regulated-price good are not the whole spectrum of good required to satisfy the feeding needs of a person, as far as i remember, the basket includes:

              Corn flour (you know for the arepas),
              Whole powdered milk
              Whole fresh liquid milk
              Refined white sugar
              Hidrolized vegetable oil (margarina sorry i don’t know how to to translated the common name)
              Mayonnaise
              Vegetable corn oil
              Standard quality (from common/cheaper semola, not the durum one) pasta (you know spaguetti)
              White 95%-not-bited Rice
              Flourized salt
              Cattle meat (just the meat not the other parts)
              Whole chicken (just the whole chicken, not the parts of it)
              Madurated-white cheese (de año) the only knid of cheese price-regulated
              Regular mixed arabica/robusta milled coffee
              Wheat flour (i guess it is still regulated)

              The basket is complete with about 8 other products like regular shampoo, basic model menstruation towels, paracetamol/acetaminofén, standard clothes soap, fresh bakery white bread (the ‘canilla’ kind something like a pale soft crust baguette)…

              And that’s all, as you can see, unless your diet be only about low quality carbs and fats with meat and chicken that’s a whole satisfying basket. Of course the regulated proteins are the most scarce goods, and as a tuna can could cost about 400 VEF the 168 g (dry weight) can or a 30-pack of eggs is most expensive than 540 VEF, you can figure how frequent is the dismissal of good in the counters of the supermarkets.

              When i left Venezuela in february the 30-pack of eggs costed 180 VEF, now it is higher than 550 VEF, black beans soared from 32 VEF/Kg to an astronomic 300-500 VEF/Kg. As i said, if weekly prices rises, you’ll find yourself with less and less capacity to pay for the things you thought you would bring home.

              Remember the modal (most frequent) family monthly income in Venezuela, as recognized by the INE the stats-State-office, is only a little higher than 2 minimum wages (including in the income not just the salary but the social benefits like CestaTickets) so, the regular and most frequent venezuelan family has to supply its entire needs with something like 15-18000 VEF/month.

              When i return back in november i guess the 30-pack of eggs would be something like 1200 VEF, i’m getting prepared psychologically to my first reencounter with the supermarket counter.

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            • When you enter a supermarket there are two kinds of products to be bought , the very scarce regulated products for which you usually have to produce a celula (valid for the specific week day they tell you) and which are only available at random (in an unpredictable way on certain stores and not on others) , after a very long queue and which price is govt subsidised , those might get abandoned not because of the price but because the number of items you can buy is not only regulated but their regulation can change as you make the queue to have them delivered to you or as you make your queue to pay for them , lets say you are told you can buy 3 units of an item, then when you go pick them up they will tell you you can only buy two or they give you 3 but there is an announcement over the speakers that only one will be allowed to be bought , the number of products falling under these category are about two dozen but they comprise the most essential items .They are always in shortage so people will abandon them at the counter only if forced to. Frequently you will try to make an arrangement with your neighbor who ocassionally will not be interested in buying his own quota and is prepared to buy them on your behalf , with delivery outside the store . Sometimes the counterlady takes a shine on you , and will wink and let yout buy one or two items which exceed the quota.

              Then there is this much larger array of goods which you can buy without queuing and regardles of the number of your cedula but at a price that doubles every month or two months , this you abandon at the counter because when they tally how much you have to pay , you dont have the money to pay for them , these products can also be rationed by the store owner because they are often also in short supply , usually however you know the quota and dont take them to the counter if you know that youve reached the allowed limit.

              There are non regulated but very pricey products with which you can use to subtitute the regulated ones which are not available , certain kinds of rices for example .

              People will sometimes take to the counter items they need to buy but which they dont know if they will be able to affort until the counter lady tells them how much they have to pay for the whole of their purchases , and which are left abandoned because they cannot be afforded .

              This was very seldom the case before , people left few items at the counter , now the number of items left in the counter are much larger .

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  4. What if it’s just a messy, inefficient, yet potentially effective way of controlling the microeconomy (i.e. people). I mean, make everybody, buyers and sellers, rich and poor, confortable with using only plastic/electronic money, because it’s the only practical way, and then suddenly, Whammo!! Total State control of your money and how/when/for-what you can spend it. It sounds so evil that it may even work.

    Liked by 1 person

  5. OT. Was just checking El Universal and had to laugh when I read the Carter Center was bailing out of Venezuela. Bugging out before their work is done. There is only one more election to go until democracy is truly eliminated in Venezuela and the Carter Center bails before they can proudly stand before the world and proclaim their assistance in the extinguishing of Venezuelan democracy.

    Liked by 1 person

  6. For people living in Venezuela its a real headache having bills remain in such low denomination , there are always cash transactions to be made (specially with inflation) and having to go to the bank to get bundles of low denomination bills makes it very frustrating, last time had a gentleman behind me who needed 6.000 Bs in cash and was offered the cash in 5 and 10 bs bills, he stormed out of the bank and went straight to the cash dispensing machines where you can still get up to 600 Bs in 50 and 100 bs bills to get the cash he needed. What most people are doing is to go to a cash dispensing machine and repeat the operation several times until they have the cash they need . It makes for long queues at the cash registers and for the money in them to run out more quickly . Getting a cheque book which used to be easy now involves an elaborate 4 step procedure through the internet page of the bank , so that you can get the checks in two weeks to two months time (not predictable) if the page after you completed the process doenst tell you that operations are suspended for the time beign. Even the access and use of cash money is a headache in Venezuela .

    I think part of the problem may lie in the propensity in authoritarian regimes to have all decisions concentrated at the top with very few decisions being delegated to people handling the day to day business of government , which makes a bottleneck of any public decision making , every thing gets stuck at the narrow funnel that channels decisiont to the top . The people on top also dont want to bother with administrative decisions, they are wholly concentrated on making big decisions with a high political profile tending to neglect all the rest . I know from friends that this is one factor affecting this govts screwed up system of governance,

    Liked by 1 person

  7. It used to be just like this in Nicaragua under the first Sandinista government. It was before selfies, but we all had double-brick sized banknote wads in our pockets–representing maybe $10.00.

    But in Venezuela’s case, the Bolivar is legally only worth between six and seven to the dollar. So, why should they print a thousand-bolivar note? That baby is worth like $150.00! El pueblo don’t need such big notes. Only bourgeois. So they aren’t going to help them.

    Liked by 1 person

  8. Disclaimer: By no account I have any authority on economic matters.

    However, printing larger denomination paper cash wouldn’t be beneficial to the economy? I know that it wouldn’t solve any of the deeply rooted distortions in our economy, however, the transaction costs involved in searching for ATM’s with money, wasting time inefficiently standing in queue at different banks, in order to make economic transactions makes up a huge opportunity cost of time on individuals.

    Plus, printing larger denomination paper cash, would effectively dimminish the tied-in costs associated with printing money (it’s cheaper to produce one Bs. 500 than five Bs. 100).

    Add to that, all the other associated costs created by the lack of sufficient paper cash, to supply the demand of individuals (thanks to our inflation).

    Pollution and energy costs caused by transportation of individuals looking for cash, traffic congestions which slows down our day-to-day transactions, decrease in sales from local businesses, etc.

    The only explaination from our current government? Criminally incompetence to handle State matters and issues. Catatonic indeed.

    Liked by 3 people

  9. Carajos, que la máquina se echó a perder y ahora solo se puede imprimir una misma vaina. Cuesta demasiado comprar una nueva porque solo se puede pagar con dólares/

    Liked by 1 person

  10. I think they refuse to do it because it would be absolutely impossible to explain. How can they go back to the 1.000 and higher bills without ending the Bolívar Fuerte nonsense? The Fuerte thing was added and the three zeros were taken away. Putting them back, even if it really wouldn’t be the same (we are actually taking about 1.000.000 of the old ones), is impossible without practically ending the Bolívar Fuerte narrative.

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  12. I want to propose an alternative to the-goverment-has-gone-insane-yet-again theory:
    In Colombia people are selling 100 and 50 bs bills to the bachaqueros so they can come here and buy the stuff. My suspicion is that some one makes good cash by not having a more reasonable currency note and that those guys are the ones blocking the new bills.

    Liked by 1 person

  13. The government is standing between communist cum religious fanatics and opportunist raspa olla. If Maduro does anything reasonable either faction will react and expose Maduro’s weakness to all which he may not survive.

    The government has no room to maneuver, they’ve drawn down all their assets, including their political capital.

    Catatonia due to permanent vegetative state.

    If I were Maduro I would pull a Fujimori. Take a state visit to Cuba or Argentina and fax my resignation.

    Liked by 1 person

  14. You are forgetting one very important explanation: conspiracy theories. Maduro, fearing that it is the hand of Langley behind the inflation, has realized that one way to fight counterfeiting is by making it less effective to flood the country with currrency!

    Or maybe they are just catatonic and forgot to send the memo to the currency presses.

    Liked by 1 person

  16. my two 500 BsF contribution:

    Key word: Self destruct mode! the regime has timed its self imlosion for the fourth quarter, it gives it a great way to sabotage elections and create the conditions for the next stage of (even more) lawlessness ahead.

    Liked by 1 person

    • Yes, timing an Estado de Excepcion before December would be another reason for this currency conundrum , besides my patented Socioeconomic Thesis: “Illusion y Expansion sicologica de los billetes artificiales bolibanana fueltes” , briefly depicted hereafter.

      Bigger bills, but ostensibly much fewer, thinner bills, would mean admitting another defeat or devaluation, would crush the sinister mass illusion of having plenty of cash, while still affording to buy less and less.

      Print the bigger bills in November!

      Pa’ que la gente se termine de arrechar, y Boom! Guardia Nazional pa la calle, por seguridad nazional e imminente ataque Imperialista del Eje perverso Ultra-Derechista Miami- Guyana-Uribe! Toque de queda hasta nuevo aviso en el 2016!!

      Liked by 1 person

  18. I thought the same thing as NET. here. Except I’ll go ahead and rephrase it in a less politically-correct, more crude and explicit manner:

    Vzla’s remaining massively ignorant populace, — especially the Target Audience that the Dictatorship is still interesting in deceiving (and that is a Crucial point) — can be fooled by the childish illusion that they have lots of paper money in their hands. “Un tremendo fajo de bolivales fueltes, mi helmano”..

    Yes, millions in that vulnerable audience can be fooled that easily. Hell, they believe in much more Extraordinary Tales of the Wildest Imagination, don’t they? like Cuba is beautiful, Communism is the greatest, and the Yankee Imperialists are destroying Bolivar’s blessed Land with their relentless economic war… plus many more surreal, incredible lies many still swallow hook, line and sinker everyday.

    It their still primitive, naive, gullible minds they are tricked into false riches. Millions of Chavistas , about 60% of the remaining population, including Maduristas and anti-Maduristas arrepentidos now, but still Chavista “socialista” dreamers, the under-educated crucial Target Audience, the Fooled, utterly Brain-Washed Zombie masses, usually quietly tamed, day after day, en la cola ‘ pol los producto de nesesida basica que nos da el gobielno a presio justo..”.

    Lots and lots of voluminous, heavy cash they never had in their entire lives, that they’ve always dreamed of, “Miles de Bolivares Fueltes!!” loading their pockets. For them, at their astonishing levels of proven surreal naivete and Ignorance, it can be a powerful illusion. Remember, not

    Additionally, in stupid theory, they would imagine they can spread all of those thousands of bolivars better, in large families, the typical 7 unattended kids with 3 different lost fathers and single mothers, they can give each kid a “bunch” of cash to go to school with, divide all those bills, forcing them do do squeeze the shit out of each worthless “Mil Bolivares Fuertes”. .. “Toma, mijito y mijita, aqui tienen 10 MIL Bolivales Fuelte, pa la ejcuela pa cada uno!, que lej dure bajtante porque no hay mas!”

    Why do you think they called the new DEVALUATED currency, “Strong Bolivar” ?? When anyone with minimal education that is not utterly retarded can quickly ascertain that it is exactly the Opoosite, a “Weak Bolivar”, or “Bolivar Debil”, Bolivar Chimbo, devaluado. But hey, it worked,, 16 years, does the trick anyway.
    Did this target, ignorant audience comprehend any of the financial or macroeconomic reasons for the “Bolival Fuelte” change, any of its repercussions? Of course not, it was just another carefully concocted Mirage, a grotesque maneuver for the naive populace, yet it was effective for a while, wasn’t it? 17 years of similar enormous lies, thus far.

    You see, it’s all a big Illusion designed for the perpetually poor, uneducated, easy-to-influence Target pueblo. Allows them to dream, deceives them, and forces them to Stretch every “Bolivar Fuerte del Comandante Eterno Chavez to the very limit. That’s the only audience they still need to Fool, besides the 5 million or more enchufados that are stuck with the system, and with a little final push from el Comandante Eterno’s Smartmatic machines, as necessary.

    Liked by 1 person

    • Interesting “monopoly money” theory TTKY… the ignorant masses have always been easily manipulated with the smoke and mirrors of the regime.

      Liked by 1 person

    • You’re absolutely right. It’s simply a matter of understanding the psychology of the Poor, something the Cuban-led Ven. Commies do well, but the middle class/Oppo don’t understand. It’s naive to think that those in the BCV/Chavista economists don’t understand the inefficiencies of voluminous small bill transactions, don’t give a damn, or are simply incompetent.

      Liked by 1 person

  19. Dos razones, una es política y la otra es más podrido que el petróleo:

    *** La política: El chavismo está obligado a mantener sus mentiras más grandes, que son tres: El 11 de abril TODO lo malo es culpa de los sifrinos maricos que marcharon; El dólar VALE 6,3 bolívares, porque de esa forma los venezolanos están ganando más de 1200$ de sueldo mínimo mensual; y el fiambre galáctico se murió en Venezuela, nada que ver que fidelito lo mandó a ziquitrillar. Si alguna de esas tres mentiras se cae, se acaba la imagen del chavismo que “en toda su existencia JAMÁS ha cometido un error, NUNCa se ha equivocado”, porque en este caso según ellos, “equivocarse” equivale a ser una mierda igual que la 4ta y la muerte y entierro inmediatos del chvismo.

    *** La podrida: El dólar es la gasolina MK2.0, los productos de cesta básica regulados son la gasolina MK3.0.

    Liked by 1 person

  21. It sometimes helps to understand the regimes irrational behaviour if by chance you have had a peek at how at different times they have been advised by their own people , people who are loyal to them that there is this or that they must do to address the worsening financial situation and lift the declining popularity problem thats now weighting so heavily on their minds , im talking about people they themselves have told ‘help us figure out what we can do to get out of this mess’ , and when they come with the proposed solution , the bosses are blocked from considering it because they are so afraid of the effect on the regimes popularity. Fear is their greatest enemy. It paralyses their decision making , in short it makes them catatonic , just as Francisco says. !!

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    • “It paralyses their decision making…”

      B.B. nailed it. Look at another “no brainer” decision, the need to raise the price of gasoline. This one, they have talked about, but they can’t bring themselves to do it. Why? Because they know that their position in power is so precarious that they are afraid to make any decision that might precipitate a backlash that they may be unable to control. So, yes… they are afraid.

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    • Irrationality can’t be explained by rational ways of reasoning because everything fits into that big bag. In this column there are more than five ways to explain the government behavior and all of them make sense to me. The irrational and ineffective mind of the government opens an empty space which is up for grabs and all of you are “fighting” to occupy it… Maduro, meanwhile, would laugh at all of you if he were intelligent enough to read all this

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      • This point from Ramon is excellent , we can speculate based on our own assumptions what ‘reasons’ may exist for the government apparently irrational decision not to print higher denomination bills. But because there is so little information about what guides the government thinking or behaviour there is no way of telling whether those reasons are right or not , in short there is no ONE right answer. Speculating about them may be interesting but we dont know what causes their seemingly irrational behaviour.

        The assumption is that human beings behaviour is always purposeful and rational ( even if the reasons used or alleged are mistaken), in the case of this government time and again we find ourselves looking at behaviour which cannot be explained using ordinary reasoning and thus feel the temptation to speculate .

        Francisco’s explanation is that the government’s mind has been rendered catatonic by their inability to handle the difficult challenges they face given the restraints and delusions and fears that operate in their mind . its a plausible explanation except there is no way or verifying it.

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        • …thanks for your words… let’s hope Venezuela finds soon a more rational and predictable way to solve the conflicts that every human society inevitably has to deal with…

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        • Hello Bill,

          Yet for me it is like ‘criminal profiling’ or playing poker with someone I don’t know well. I create a model of the opponent which hopefully may help me understand and maybe even predict.

          So the exercise is not futile.

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          • the poker game of Maduro with Venezuela doesn’t follow the rules because he imposes his own ones and change them whenever he wants… any model of the opponent is doomed to fail

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      • Perhaps another way of looking at this “irrationality” is to examine our assumptions of their ultimate goals. We tend to judge the rationality of the actions of the government from the perspective of assuming that the goal is to make the country work better. I think that this is a false assumption. Try looking at it again if you assume:

        1. The regime fully understands that the system is a failure, is not sustainable, and that its days are numbered.
        2. The real goal is to stay in power as long as possible and to steal as much as possible during that period.

        When you apply those assumptions, the actions of the government start to appear more rational.

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  22. it’s also a matter of safety. You have to make multiple trips to the bank for money every week. I have family in San Cristobal who don’t even have a bank account. My nana is forced to travel with cash to give them money (or they come to Caracas), and it’s a huge wad of cash worth nothing.

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  23. I think they just don’t have the money to print more bills. That plus their mind-over-matter approach to the country’s problems.

    It is interesting how many reasonably rational people who say they’re Chavistas but hate Maduro think everything was fine under Chavez and if HE was still around all the problems would be solved. It’s funny how people don’t remember that things were already going bad, the start of what we have now was clearly underway. Maduro only continued the same stupid policies that Chavez would have had he not died.

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  24. Those of you pitching theories that the poor think they’re rich because they have lots of cash – two points:

    1. These people are not living on exchanged foreign currency where each $100 gives them a wad of cash, they’re living on incomes that have increased very little. They’re pretty much getting the same number of 100 Bs bills they received before.

    2. I guess when you guys are shopping in stores (do you even live in Venezuela) that I do and you don’t see the people I see, who walk in and ask the price of an item and leave in disgust without purchasing the item they just priced, because they can’t bear the price or they can’t afford the item period. I see this everyday with food items. The chorus of discontent over prices is louder every day. The inflation is taking a huge toll on the people. In my neighborhood Friday and Saturday nights used to be competing block parties with blaring music and drinking till dawn. Now the weekends are silent as people can’t afford to throw parties and because of the crime (exacerbated by the disastrous economy) they don’t dare be out all night. Business at restaurants is down. The poor are getting totally clobbered and the rich are seeing their savings, hopes and dreams shrink before their own eyes. The only people doing well are those living on foreign currencies.

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  25. Será difícil transformar caracaschronicles en una publicación de pago si en prodavinci te encuentras gratis artículos sobre este asunto como por ejemplo este http://prodavinci.com/blogs/cuales-serian-las-consecuencias-de-emitir-billetes-de-mas-alta-denominacion-por-anabella-abadi-y-joastin-rangel/

    Mientras aquí se opina y se elucubra sobre el origen de tal o cual irracionalidad teniendo todos a su manera razón porque no hay quien explique lo inexplicable, ahí se informa, gratis igualmente…No es nada fácil ser periodista hoy en día.

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      • una cosa es vender una publicación y otra es pedir donaciones de los lectores. Si es eso lo que tenía en mente Francisco Toro, le malentendí. La situación de los periodistas sigue siendo igualmente mala si se tienen que dedicar a decir a la gente “spare some change please”. No es el tema que se discute hoy aquí pero con tal cantidad de fuentes de información a mano y siempre que haya ganas de pensar por uno mismo, el periodismo se ha vuelto en buena medida prescindible.

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        • Es comprensible que el periodista quiera cobrar algo por el beneficio de ofrecerle una informacion o analisis que no se puede obtener gratis en otra fuente , pero a veces da miedo que se caiga en la tentacion de crear una estructura muy grande sofisticada y complicada para manejar el blog y ello resulte en un monto a cobrar que no sea competitivo , lo otro a considerar es que cuando algun blogger no vive en el exterior los mecanismos de pago pueden no resultar tan sencillo. Le tengo miedo al hubris que nos asalta a todos los humanos cuando empezamos algo nuevo y con estrellitas en los ojos empezamos a hacerle listas al nino jesus. Confio sin embargo en que Francisco y sus colaboradores y socios sabran obrar con ponderacion .

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          • Yo me informo sobre Venezuela a través de cuatro o cinco twitters, blogs agrega-noticias como este, http://venezuelandailybrief.blogspot.com.es y uno o dos más, la web de el nacional, las portadas diarias de los periódicos en la patilla y aporrea porque a todos nos gusta escandalizarnos un poco de vez en cuando . La cantidad de información que se me ofrece es abrumadora y toda gratis. Es cierto que necesité hacer un esfuerzo inicial de búsqueda y que primero tengo que preocuparme de leer entre líneas todo para saber de quien me puedo fiar y de quien no pero, una vez superada esa barrera, no hay límites para la información. Es un privilegio poder seguir todo tan de cerca a pesar de vivir a miles de kilómetros de distancia.

            Salvo que Francisco Toro quiera reproducir algo parecido a esto http://www.macropolis.gr/?i=portal.en.home o aporte un valor añadido de otro modo, no me explico qué información o artículo “cobrable” puede aportar este blog o cualquier otro. La manera más directa de hacerlo es continuar por el mismo camino, cobrando en especie a través de los buenos momentos que él disfruta haciendo bromas sobre J. Luers o relajando (vacilando decimos en España pero no sé si se entiende esta palabra allí; mi “venezolano” deja bastante que desear y a veces es más práctico escribir en inglés) con algunas de sus respuestas en la sección de comentarios.

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            • Lo primero es subrayar que todavía no hemos tomado ninguna decisión sobre el “como” monetizar el blog. Ciertamente, algún mecanismo tipo subscripción con Paywall está bajo consideración, pero primero vamos a evaluar la cosa bien.

              Por un lado yo estoy claro que tú tienes razón: nadie va a querer pagar por un medio de información, dado que mal que bien medios gratis hay bastante. Pero CaracasChron nunca ha sido fundamentalmente un medio de información: es un medio de opinión y análisis, aunque con mucho contenido noticioso. Nuestro modelo implícito siempre fue The Economist, que informa pero no existe para informar sino para explicar y comentar en base a información.

              Ese servicio, a diferencia del de información, sí es escaso, y yo intuyo que tenemos una base de lectores lo suficientemente fieles y leales como para que una buena parte esté dispuesta a pagar una subscripción mensual para acceder a él.

              Pero no tenemos prisa: esto lo vamos a analizar con mucha calma antes de tomar una decisión.

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              • Tú tienes mucha más información que yo sobre lo pequeña o grande que es la base de lectores, lo que estás dispuesto a hacer o no… y poco o nada puedo añadir entonces. Ojalá os vaya lo mejor posible, de verdad. Juan Cristóbal Nagel se tomaba más en serio que tú el trabajo de escribir aquí pero me gusta tu humor, en este blog suelen aparecer informaciones o detalles que no encuentro en otros y además, ya estoy acostumbrado a visitarlo.

                Ser un The Economist sobre Venezuela me parece inalcanzable pero al mismo tiempo es una muy buena dirección a seguir y esto hace que no importe tanto si se llega al final a la meta o no. Miguel Ángel Santos, Luis Vicente León, Naky Soto… por nombrar tan solo a unos pocos (la lista sería larga) hacen igualmente análisis, cada uno desde su propia manera de ver el mundo. Cuando cada uno se puede hacer su propio The Economist gratuitamente según sus propios gustos (a mi por ejemplo me interesa sobre todo el delirio económico que están sufriendo allí), no sé qué mercado puede haber para otro, hecho según los tuyos en particular y si realmente merece la pena el esfuerzo que requiere el apostar a que sí que existe uno para esta publicación pero, repito, os deseo a todos lo mejor y espero que esta página siga adelante sea como sea.

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  27. With oil price heading to $30, the medication dosage used to treat their catatonia will have to be increased…

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  28. Is easy to understand, for the goberment printing higher denominated bills represents a capitulation, it is like recognize that they are losing the “economic war”

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      • If you ever fought you know that sometimes you have to take a punch to land a better one. In many ways politics has the same dynamics. Of course to take a punch you must have technique and strength. Chavismo is intellectually stunted and politically weak (at least in the context of democracy).

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  29. Catatonia is new? Nope it’s not. Seen in the private sector plenty of times. Maybe the scale of it is new, but doing nothing while the ship sinks is one of our best loved traditions.

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  30. It’s simply a matter of understanding the psychology of the Poor, something the Cuban-led Ven. Commies do well, but the middle class/Oppo don’t understand”

    Exactly. Economists and middle-upper class intellectual observers often fail to understand such devious, Populist Castrista strategies. It’s no surprise that Toro is clueless here, his last recourse trying to comprehend the paper currency conundrum is to call it “catatonia”, or stupid inertia, one of the few things it is not. Might as well blame it on the Witches of Eastwood or Maria Lionza.

    What happens here is that many of the middle-upper educated classes, Professionals like the readers of these blogs (all gone from Guisozuela and somewhat detached by now), we grew up talking about Dollars and Euros, earning them in our good jobs, learning macroeconomic international, financial theories in school, applying them at work in real financial situations, directly in touch with the International Value of any currency and the true meaning of Purchasing Power, which is what ultimately matters.

    The Chavismo Target Audience grew up completely detached from all that. Plus they are easily brain-washed, almost Lobotomized by now, or so it seems, by fairy tales of socialismo y podel pal pueblo y bolival fuelte y mision vivienda y precio justo shit.

    Chavez understood all this, the Castros understand it, they know how the ignorant poor think, heck, they WERE those same ignorant poor a short time before themselves, as Bus Driver highschool dropout thinks the same way, they come from the same Pueblo.That’s how Chavismo won their votes and hearts. While the Adecos/Copeyanos and us educated “sifrinos” were left in the dust, clueless, still scratching our heads, wondering why this or why that happened or his happening. “Quien entiende esta vaina??!! ”

    The vast majority of the massively under-educated Pueblo People left in Vzla hardly ever saw a real Dollar bill in their lives, much less a Euro. The farthest most ignorant Chavistas ever traveled, in Generations, was to the Colombian border or to Caracas on a big Holiday. They don’t fly on planes or read the internet much, you see.. They barely know how to read&write, alphabrutized indeed, but have zero clue about the most basic economic or financial laws out there, NADA, zilch. they are disconnected from the world, they still think Cuba is awesome, phantom wars, etc..

    All they have seen their entire lives are Bolivares, and few of them, mostly Coins, too. Suddenly they see and feel in their hands tons of Bolivares Fuertes, loads of them! Fajos de Billete de Bolival Fuelte!! what they always dreamed of having since they were kids in the country, the ranchos, the caserios or the barrios, they grew up lucky to have Lochas, Medios, Realitos, Bolival sensillo de a moneda, or el “Fuelte”, remember, the all-mighty 5 Bolivar Coin we bragged about having as kids.. A One hundred dollar bill was a Fortune for decades for these people, who grew up with 5 bolivar, 10, 20, 50 bs. bills for decades. That sticks in their collective brains for a long time, subconsciously, so they are incredibly fooled by the Illusion of Wads of Billete de a Cien Bolivale Fueltes!! Even when they know they don’t buy much with them, it Decades of growing up in that Bolivar system, exclusively, ignorant, isolated from the rest of the world.

    That’s what civilized people, the writers and many readers of these intellectual blogs sometimes cannot comprehend. To us it’s Obvious! print larger bills now!, we often don’t understand the pueblo-people’s primitive psychology. So we tend to classify this Machiavellian Dictatorship’s every economic or financial move — or lack thereof — as simply “Inept”, or “otro guiso”, sweep it under the Corruption rug category (which almost always works, I must admit) or just call it “Catatonic”, inexplicable, random chaos, as some here wrote. In this case, it is not.

    The Opposition makes the same mistake, they think the Chavista Regime, which has countless well-paid Economists and Financial advisers is just utterly stupid, inept and corrupt, which they are, but not to that extent. Sometimes, as in this case, they do it on purpose, and for many sinister good reasons for their greedy purposes of staying in power and stealing more. Capriles and Jose Guerra keep talking about Economic Policies, even giving advice to the corrupt Dictators.. how naive… saying “el gobierno le da la espalda a los problemas economicos, ineptos, no les importa el pueblo”‘ Claro que les importa! asi es que pueden robar mas!! The Kleptomaniac Regime normally conceives and applies numerous wicked Plans and elaborate Populist Strategies, and has been applying them for almost 2 decades of successful repression and Mass illusion. Heck, Chavismo’s perverse mentors, the original Cubazuela have been fooling everyone, including the USA for almost 6 decades now.

    These Populist regimes, disguised Dictatorships, continue to fool and purposely confuse everyone sometimes, laughing at us while stealing everything in sight, fooling entire Governments, or the readers and writers of these blogs, the International observers, the “wise” and educated intellectuals, plus the entire Opposition, not to mention the poor uneducated pueblo, still dreaming and confused about their wonderful brand new loads of billete de a bolival fuelte.

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    • “The Opposition makes the same mistake, they think the Chavista Regime, which has countless well-paid Economists and Financial advisers is just utterly stupid, inept and corrupt, which they are, but not to that extent.”

      So you agree that they are both ill-intentioned and stupid (to some extent) — although most of the times their policies aim at deepening the revolution, their control over society, other times it’s just their sheer incompetence screaming, right?

      To let tons of food rot at ports (PDVAL), for example, when they could be using the same amount to feed and buy loyalty from, say, the colectivos, slums, etc, is catatonia, is incompetence, is stupidity.

      Those guys make mistakes too. And sometimes their ill-intentioned policies are just stupid, and bring counter-productive results for their 1,000 year Reich plan. What you said about the bigger notes might be accurate, but it’s clearly not working very well given the last polls results.

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      • It’s not sheer incompetence or stupidity in most cases, like this macroeconomic decision about popular currency. There’s a lot of that, and even more of sheer Mega THEFT. But there’s a method to the madness. Not gonna retype it.

        The rotting food containers were examined and understood properly on this blog on a previous post. I suggest you read it. It was a pre-meditated Megaguiso, they stole their money and left, happens all the time, everywhere in Kleptozuela for decades, even before Chavismo. Not ineptitude. Not stupidity: THEFT.

        Of course there’s ineptitude and corruption, and chaos, and random mistakes, but more often than not, it’s pre-meditated Startegies, proven in multiple Populist regimes and Cuba, the long lines, the cupos, empovering the population, forcing the massive brain-drain, creating this massive cash Illusions, force-feeding huge lies and propaganda the under-educated pueblo does believe, as I explained above.

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      • About “not working well in the polls”..

        I insist on the concept we often forget:

        Populism.Chavism’s Target – Audience.

        They don’t care about what educated people think. They don’t care about what 30% of declared anti-maduristas think. lost cause. They don’t care about the 1 Million professionals, you and me , who left long ago. They just want the last thinking people left to leave too. And they did in Cuba.,

        The Target Audience for these multiple Mass Illusions is the still pro-Government enchufados, about 5 Million) plus the Millions of ignorant Chavistas who still love Chavez (an additional 30%) . They don’t give a shit about anyone else in the Planet.

        Gerrymandering, TibiBitch, propaganda, threats, bribes, repression and El Comandante’s most wicked legacy of all, Smartmatic, will do the rest. For now, expect a laughable, yet explosive 55% “victory” for the Chavista-light, corrupt MUDcrap in December. If they don’t sabotage that shit with an Estado de Excepcion first.

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    • Once again, you’re right–very hard to understand for the typical intellectual reader/commenter on this Blog who has rarely/if ever come into any sustained contact with Venezuela’s Pueblo. The Poor, in a recent poll, put crime/scarcity at top of their concerns, but prices substantially lower in third place–you see, they shop at Mercal, make lines for giveaway-priced “Precio Justo” basic consumer goods, still below cost/cheap when they purchase them from their neighborhood bachaquero. They don’t pay any visible taxes (only invisible IVA), nor property taxes/rent/electricity/water/heating fuel bills, wear the same clothes (jeans with holes even being fashionable for a long time), have virtually free education for their children, as well as (albeit very deficient) health care, have heavily Govt.-subsidized low-priced public transport, pay giveaway prices for basic medicines such as antibiotics, can break virtually any law at will without fear of sanctions, generally have few personal aspirations of self-betterment, and represent more than 80% of Venezuela’s population. And, they are extremely heavily dependent on Government at national/state/local levels for jobs/handouts. They think in terms of “millones”, being the “miles” of today, after Chavez knocked off 2 0’s to make his “bolivar fuerte”. Wads of cash in hand makes them feel good; they don’t buy/aspire to most of the middle class imported goods purchases, which are becoming increasingly dollarized

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      • Right, it’s an vast, elaborate populist Mirage, part of the Communist overall strategy, from no taxes, no accountability to the Huge Government in charge, to the planned impoverishment of the remaining ignorant masses. Untimately, you get Cubazuela2, and an Old, literally very old, tired and tamed Zombie population.

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        • Even Crime, almost 100% Impunity, was PRE-PLANNED. It serves multiple specific purposes, instills fear, makes Millions leave the country, DEVIDES the population with more hate, etc, all part of a larger Communist Dictatorial Scheme. Crime probably got a bit out-of-hand, for their taste, but even that, let alone such basic, or obvious monetary, economic or financial policies, are hardly random or “catatonic”.

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  31. Its a fact that the bosses are scared s…less by their growing impopularity and the unstopable tide of discontent which is fast washing away all the old por regime delusions , even pollsters with links of the government warn of the increasing discontent , regime spokesmen like JVR and others go as far as talking about it , Aporrea pieces are full of it , quite simply people are bitter and angry with the inflation , shortages , rampant crime and whats more important 80% of the total population now blame the govt for it .

    Despite all the regimes efforts at silencing critics and disseminating disinformation which absolves them from blame to inculpate the oppo businesses the point has come where they have lost their credibility among the mass of people and moreover are losing the media war which they wage with all the institutional cards in their favour. Even their trolls in the social media (ehem) have to mascharade as regime bashers to try and discredit the opposition with gross tales of corruption and ineptitude , with their message of abandon all hope those who desire a regime change ..its all useless. We know that if they worry that much its because they are in the throes of lossing it .

    This country is a sieve , even supposedly secret govt decisions or activities to shore up their falling props or to hide their current desperation are ultimately filtered to the outside world by talkative followers gossiping with their relatives and friends , Maybe people living abroad never get to listen to these things , but at a certain level people in Caracas are well informed of the inside circles panicky status .

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    • So would you say that the panic is becoming more real to a closer circle of insiders and hangers on thereof?

      Vampires like JVR know when to suck less to try to keep the corpse alive, but.

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      • Bill Bass is correct. But instead of the vampires sucking less, they are sucking more than ever because they know that it can’t last much longer. Better to “get it while the getting is good”.

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      • Roberto just put your self in their shoes, they know what the economic situation is like , they have the polls , they can up to a point game the system through frauds and coercion and misinformation , but the challenges ahead are become larger and more threatening , default looms next year , they are no longer the darling of an anti yankee world , theyve lost much of the support the had from abroad , they re in a fight with Caricom, their friends in Latam are facing very difficult situations, China is becoming more realistic and skeptical of what the govt has to offer , they are no longer growing like in the past , they are withdrawing from much of the world commodity markets because theyre changing their economic growth strategies, the prices of oil are at rock bottom and may fall even more, the oil industry is also in the throes of having to enter a phase where its income from heavy crude exports will be much lower than those of the past . They have people from their own side begginning to challenge their governance style and political authority . If you were them . how would you feel ???

        roberto

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        • I get it, BB.

          I was asking whether or not, in your opinion, THEY,/b> see that the “llegadero” is close…

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  32. Terminara todo en un bano de sangre con muchos monigotes ejecutados por las masas enardecidas, y luego , vendra la gran oportunidad de lograr justicia! espero que lo sepamos aprovechar y no se pierda nuevamente en negociados, puentes de plata, exilios dorados y amnistias entre politicos…

    veremos.

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