Hello everyone...
Today when I sold a phone I got paid to my bank account this amount of 2.410.173.000.000.000.000 and although it sounds like a good amount of money that would make anyone very happy or would make me the most millionaire person on the planet leaving far behind Bezos and Musk, the truth is that this amount does not even represent what Bezos or musk spend on breakfast. As you all know, I live in Venezuela, a country where hyperinflation has eaten up all the monetary value of the country making several trillions to be absolutely nothing. That is why many Venezuelans jokingly tell themselves that we are only millionaires in our dreams.
But, why am I telling you this? Is it to make you feel sorry for me or to make you jealous of me? Not at all, it is to show you what it is like to live in an economy where your money loses value every 6 hours and where there have been 3 monetary reconversions in 13 years, and I am also talking about this because of the way things are going worldwide with the fall of the dollar, soon you will see many similarities between the dollar and the Venezuelan Bolivar.
What is monetary reconversion and what is it for?
The reconversion is a political instrument to assure the citizens that all is well and that Hawaii is in sight when in reality the ship has already sunk and the captain and the other officers and even the vermin of the ship have fled a long time ago. Governments define monetary reconversion as a monetary policy that aims at correcting elements that distort the economy, such as inflation, monetary liquidity, decrease in purchasing power, among others. In other words, attacking the symptoms but not the disease.
The purpose of the monetary reconversion is to create the conditions to reduce the vulnerability to elements that destabilize the economy of the nation. In the case of Venezuela, these elements that destabilize the nation are the United States and its allies. Furthermore, the only benefit of this measure is to bring a new, more expensive, and beautiful monetary cone.
As I mentioned before, in Venezuela there have been 3 monetary reconversions in the last 13 years, the first one occurred in 2007 where 3 zeros were eliminated from the Venezuelan currency and it was renamed from Bolivar to Bolivar Fuerte, this as a product of inflation that was beginning to grow since in 2007 there was accumulated inflation of 17%, very low for what it would be later.
In 2018 there was the next monetary reconversion this motivated by constant hyperinflation that was destroying the Venezuelan currency and reducing it to nothing, so much was the damage to the Bs that other currencies such as the Yuan, the Rupee or the COP were worth more than the supposed bolivar fuerte, also in 2017 and 2018 many videos and images began to circulate in social networks where it was seen how people threw bundles and bundles of bills to the street as they made wallets and bags as they had no value, I even heard of people who used them as toilet paper because at that time toilet paper was one of many products that were scarce everywhere.
So, by the reconversion of 2018, the bolivar ceased to be strong to be sovereign and 5 zeros were removed from the currency and if we add the 3 zeros that had already been removed, it would be 8 zeros that in total had been eliminated from the Venezuelan currency. But these measures did not last at all nor were they effective, since at the end of 2018 the accumulated inflation in Venezuela that year was 1,698,488%(SOURCE). I remember how things went up daily, for example, a loaf of bread cost 1,500.00 bolivars and 2 hours later it was at 2,400.00 bolivars, quickly this new monetary cone was voraciously consumed by hyperinflation.
Although the hyperinflation has decreased a lot and is no longer dangerous, and in June of this year the accumulated inflation was 333%. Just 3 years after the last reconversion a new monetary reconversion is being planned, since the monetary cone has disappeared and Venezuela had to appear economically strong before the world, that is why this week economic measures were announced to make a new monetary reconversion that besides supposedly strengthening the economy will also take Venezuela to a new digital era because the bolivar will cease to be sovereign and will be called digital Bolivar. These economic measures will be applied as of October 1st and with another very nice monetary cone, 6 zeros will also be eliminated from the currency.
Crypto is the solution When will they understand?
We know that with this reconversion and this new monetary cone in my short time will be consumed by inflation, but I like many Venezuelans will not be affected by this inflation because we are much smarter and we are in crypto for some time, we also know that no fiat currency will survive the next global crisis left by the pandemic and even if they hide data or try to disguise it with reconversions, in the end, everything will explode and happen what mistakili told me:
When we look at everything happening, crypto has come a long way, from the days of being labeled as scam to being adopted as legal tender in countries. What we have happening now are regulators around the United state fighting tooth and nail to bring it down, cryptocurrency disrupts a lot of processes in the legacy financial system that is broken and out dated, how some people feel such systems should be protected and are loosing sleep over it is totally beyond me, they aren’t fighting to secure the future of coming generations, they want to pass on their debts to them, they want to pass on their outdated, expired archaic laws to the digital economy, it doesn’t make sense to me, this is why crypto will prevail. It is my hope that people are paying attention.
So in conclusion, be aware of everything that happens and if you are still sheltering in fiat money look for better ways to save the value of your money.