Hello everyone, I want to welcome you all to my article.
Two days ago I uploaded an article in which I talked about how the socialist measures applied in my country had managed to take it into an abyss, destroying their economy and the quality of life of the people, which we still live here.
If you haven't read it yet and want to do it, you can do so by CLICKING HERE
This post caused a lot of opinions on the social networks on which it was shared, being thus my most viewed article on the platform today, but one thing that really caught my attention was how certain people debated about how a crypto would look affected, if measures similar to those implemented in my country were implemented, would they achieve a very similar result? or would the result be totally different?
I will tell you what I think, but before that, I want to give you a brief review of what happened to my country's local currency, once the socialist model began to be applied.
BOLIVAR
The Bolivar was the official currency of Venezuela in the period of 1879 - 2007, this had a monetary cone which had already gone through some other reform, incorporating new Bills or changing the design of these same, but never changing its name, it was still the "Bolivar"
On March 6, 2007, Venezuela's executive power, with the support of the legislative branch, decided to approve a monetary reconversion, this due to the rising inflation that was occurring in the country as a result of the series of measures implemented by the government, which had slumped the value of the Bolivar on such a scale that the amounts to be paid for certain things were already very large, so they chose to apply a monetary reconversion, thus eliminating three zeros of the official currency at that time and renaming it as "Bolivar Fuerte", all instead of applying the necessary measures to solve that problem.
BOLIVAR FUERTE
Once the circulation of this new currency began in the country, the confusion dominated everyone, things that in past days cost 5,000 Bolivares now cost 5 Bolivares fuertes, everything was totally new for everyone.
Could we see this as something like a Fork? Yes, I think that. Even though both concepts have their differences we could say that they also have their similarities, so we can take this as an example, from my point of view of course.
Going back to the subject, at first many thought that this would be the solution to everything, everything looked more "Economic" but this was nothing more than a cover, because inflation was still there, only the fact that something went from 5,000 to 5, was simply a visual effect which calmed many.
And it is that how we would think that this would solve everything when what had really caused the problem, which were the measures applied by the government still applied, thus achieving a silent but visible inflation which every day guided us towards a big emptiness.
Time went on and the amounts grew again, even larger than before, that big smokescreen that had been created gradually fading, but the government had an idea.
They did not want to show that their measure was a total failure, so in a more disguised way, they created a new monetary cone, but with the name of Bolivar fuerte yet.
A new family of Bills had been born, which had a value from 500 to 100,000 Bolivares Fuertes.
Curious fact: During all this time in Venezuela there was a foreign exchange control measure, so a system organ called "Dicom" establish in that time according to its criteria the determined value of the Dolar in the country, so in Venezuela there began to be two types of Dollar exchange which were extremely different, as an example, I could tell you that according to the official change one Dollar would cost at that time "200 Bolivares fuertes" while the street's dollar, which was named black Dolar, would have a value of "2, 000 Bolivares fuertes" a very big difference.
Turning to the subject, this measure of a new monetary cone was simply a massive trigger for inflation to rise drastically, so in less than a year, a carton of eggs could cost you a total of 10 million Bolivares Fuertes. Yes, as you hear it, "Millions".
The worry was growing, the numbers kept coming up, one day a cereal could cost you 5 million and the next day could cost you 10 million, amazing I know.
But the government didn't want to accept that what was wrong was its measures, so they decided to apply a new smokescreen. Yes, a new monetary reconversion had been announced.
BOLIVAR SOBERANO
On August 4 2018 a new currency and monetary cone had entered circulation in my country, the Bolivar Soberano (Our current currency) had this time removed five zeros, this to form again a large smokescreen, which clearly didn't work because we already had the knowledge of what had happened the previous time, so their plan didn't work as they thought.
Millions of complaints were sent to the "government" bodies, but clearly like any dictatorship, these ignored the complaints and continued with their game, the difference was that inflation was already growing at such speed that in less than a year this monetary cone had to be expanded because the new Bills no longer provided enough to be able to afford the products.
The bills of 10,000, 20,000 and 50,000 Bolivares Soberanos arrived, which also did not last long to be devoured by inflation.
They decided in that year 2019, also lift the exchange control, this because they knew that this did not serve them either, so began what would be the new stage of informal trade in Venezuela.
Venezuela's dollarization?
As difficult to understand as it may seem, a new informal dollarization phase began in Venezuela, this is because the vast majority of formal and informal businesses in the country decided to start receiving Dollars as payment methods, this because they saw more profitable receive Dollars for the products re-investment, because the Bolivar Soberano has a lot of inflation.
Today you can go to any business in the country and they will give you the prices in dollars and you will decide whether to pay in this currency or at the exchange of the day in Bolivares Soberanos, it should be noted that the vast majority of products consumed here are imported, this is because there aren't national production, due to the expropriation and destruction of the private sector and the public enterprise of the country.
Curious fact: Today everything in the country is dollarized, everything but the minimum salary which is 300,000 Bolivares Soberanos, taking into account that the Dollar today February 5 is at 74,793, the minimum salary today is of 4 dollars.
I imagine you'd wonder: How can you live when everything is Dollarized and you make only 4$ a month?
Well, this is because the vast majority of Venezuelans who are still here, have some familiar that work in other country and these send remittances to help their family that is still here, this is the most common case that is presented, others also have jobs or businesses in which they receive profits in Dollars, and also this very small part of people who work directly or have relatives who work for the "Government" which is actually a dictatorship.
It should be noted that there is also a very large sector of people who do not have this type of luck, nowadays in Venezuela there is a big percentage of people who do not eat 3 meals a day, the malnutrition rate is too high and deaths from lack of food are very common, which is a very sad situation.
The PETRO cryptocurrency
What is Petro?
Well, the dictatorship seeing that the situation of the Bolivar completely escaped from their hands, decided to create a cryptocurrency with the name Petro.
Perhaps many have heard about it, others sure not knew of its existence, the fact is that this goes totally against the principles of crypto-actives, according to them they have decided that the price of this cryptocurrency is always the same price of a barrel of petroleum, which today is around 60$, so if you decide to buy one of these cryptos, you'll find it at that price on the exchange they also created, called Petroapp.
According to their communications, their mission is to make Petro the official payment method for all public services and procedures in the country, nowadays all the prices of the publics procedures are based to Petro, an example would be the passport, which today has a cost of 3 Petros, which would be about 180 dollars (According to them), a measure they decided to apply to reduce the number of people who were leaving the country, so it is really very low the number of people who have 180 dollars to buy a passport.
But well, it will be a matter of time for them to accept the failure of this measure as well.
Having seen and analyzed all the results of these socialist measures applied in the national economy of my country, I am absolutely certain that if these measures or similar were applied in the system of some cryptocurrency.
These measures would simply create a great loss, at first many would be attracted to them because they promise greater development and income for all, but it would be something so momentary that in a short time the inflation created by these measures would devour all your investment, thus achieving not only to leave you with nothing, but would also distance a lot of future investors, thus marking a constant loss for the crypto, until it's collapses.
Thank you so much for reading.
Wow