Wait Until You See The Price of Gold in Venezuela Right Now
The comments below are an edited and abridged synopsis of an article by Frank Holmes
Last month in Caracas, Venezuela’s capital city, a cup of coffee would have cost 2 million bolivars. That’s up from 2,300 bolivars 12 months ago, meaning the price of a cup of coffee has jumped nearly 87,000 percent.
But that was July. Prices in Venezuela are doubling roughly every 18 days. The IMF now projects that inflation will reach an astronomical 1 million percent by the end of this year. This puts Venezuela on the same path as Zimbabwe a decade ago and Germany in the 1920s, when a wheelbarrow full of marks was barely enough to get you a loaf of bread.
Venezuela’s socialist president Nicolas Maduro announced recently that the country plans to rein in hyperinflation by lopping off five zeroes from its currency. Zimbabwe also tried to combat soaring prices by issuing a $100-trillion banknote—which in 2009 was still not enough to buy a bus ticket in Harare.
Without structural governmental reforms, a new bolivar is just as unlikely to steady Venezuela’s skyrocketing inflation or remedy its crumbling economy.
Holmes discusses how owning gold could be a lifesaver; Venezuela’s once-prosperous economy being destroyed by corruption and mismanagement; and the diversification benefits of gold.