The financial situation in Venezuela is so bad people are tossing money in the trash because it is worth so little, according to a new report.
In an opinion piece for The Washington Post, Francisco Toro of the Caracas Chronicles news website said 20-bolivar bills were once worth about $2 US each but are now equal $0.0001.
After explaining how a friend in Venezuela sent him a photo of trash that was left behind during a store looting, Toro wrote, "and yet I can't stop thinking about it, because strewn about in the trash are at least a dozen 20-bolivar bills, small-denomination currency now so worthless even looters didn't think it was worth their time to stop and pick them up."
"As Venezuela sinks deeper and deeper into the first hyperinflation the Western Hemisphere has seen in a generation, bolivar banknotes have come to be worth basically nothing," he added.
Prices on goods go up about 80 percent every month, Toro wrote, which has made it extraordinarily difficult for anyone to afford much. The solution, he said, is to spend money as soon as you have it on something that retains value.
"Rule No. 1 of surviving hyperinflation is simple: Get rid of your money," Toro wrote. "Given the speed with which money is shedding its value, holding on to it means you're losing out. The second you're paid, you run out as fast as you can to buy something — anything — while you can still afford it. It's better to hold almost any asset than money, because assets hold their value and money doesn't."
As reported last month, Venezuela is starting to use dollars because of the massive devaluation of its own currency.
"To survive, you have to dollarize," one merchant said.
The country experienced an economic collapse in 2014 under its socialist government and has not rebounded. There are shortages of food, medicine, and basic necessities throughout the country.
Venezuela will soon release a cryptocurrency called the petro, which is backed by its vast oil reserves. The U.S. Treasury Department has since warned investors the digital money could violate sanctions against the government.
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