How hyperinflation stole Christmas in Venezuela

[Eugene]

Source: Washington Post

How hyperinflation stole Christmas in Venezuela

By Anthony Faiola December 22 at 12:26 PM

CARACAS, Venezuela — They were the cheapest in the store, but the Converse knockoffs were still 500,000 bolívars a pair. “Son locos” — they’re crazy — Viviana Acosta had said, gingerly placing the sneakers back on the shelf.

Just before Christmas, the world’s worst inflation crisis in nearly a decade was escalating — bringing a country of nearly 32 million, once Latin America’s richest per capita, to its knees. Shoes for the kids had been Viviana’s plan for the holidays. But multiply by three — for two daughters and one son — and it was three months worth of what she earned doing house-call hair and nails.

She walked outside, to the half-empty shopping street, rubbing the fatigue out of her eyes. The treat she’d just given the kids for breakfast — oatmeal, sold by a man on the street — had nearly doubled in price in one month, to 5,000 bolívars a cup. Viviana and Enrique Alvarado, her husband, had gone without.

They were passing an image of Venezuela’s late leader Hugo Chávez — “Always with us,” the writing underneath proclaimed — when she spotted real trouble.

The toy store.

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Read more: https://www.washingtonpost.com/world/the_americas/how-hyperinflation-stole-christmas-in-venezuela/2017/12/22/0a85e876-e06a-11e7-b2e9-8c636f076c76_story.html

[GatoGordo]

1. The new reality is dollarization. Fewer Venezuelan businesses are accepting the local currency

Venezuelans scramble to survive as merchants demand dollars
Eyanir Chinea and Maria Ramirez

(Reuters) - There was no way Jose Ramon Garcia, a food transporter in Venezuela, could afford new tires for his van at $350 each.

Whether he opted to pay in U.S. currency or in the devalued local bolivar currency at the equivalent black market price, Garcia would have had to save up for years.

Though used to expensive repairs, this one was too much and put him out of business. "Repairs cost an arm and a leg in Venezuela," said the now-unemployed 42-year-old Garcia, who has a wife and two children to support in the southern city of Guayana.

"There's no point keeping bolivars."

For a decade and a half, strict exchange controls have severely limited access to dollars. A black market in hard currency has spread in response, and as once-sky-high oil revenue runs dry, Venezuela's economy is in free-fall.

The practice adopted by gourmet and design stores in Caracas over the last couple of years to charge in dollars to a select group of expatriates or Venezuelans with access to greenbacks is fast spreading.

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http://in.mobile.reuters.com/article/amp/idINKBN1EK0XK