Seeing that hyperinflation on a global scale isn’t too far off in the future, I wanted to take the time today to address an important issue: when did the mass of Venezuelan society realize that they were living through hyperinflation? This is how things played out here…
Were there people initially deemed as crazy for shouting that hyperinflation was coming?
Hyperinflation was not an effect many people could foresee. The opposition party tried to warn about this, but with the ongoing war between the official party and the Other Side, fake news was rampant. Relying on information coming from one side or the other was challenging. That is the main reason why the inflationary tsunami caught (almost) everyone with their pants down.
The reality was that the trust level in the official party and their censorship diminished to negligible levels, where it remains until now.
That being said, most of the economists had a good idea about what could happen. When they talked about our economy, any predictive bad news was credible. Our purchasing power had started to erode steadily in 2012. I noticed some alarming indications during this time.
Were there societal signs of hyperinflation?
Another indication of hyperinflation was the treatment given to the people suddenly called “hoarders” by the mainstream media. Some of these “hoarders” were indeed resellers looking to make easy money, but I am sure some others were only people looking to build up a pantry, just like any of us.
Prison and prosecution were the immediate consequence, even if the supplies were for their own consumption. The prestige of the enforcing agents would rise proportionally to the number of hoarders they could catch. It didn’t matter if these enforcers ruined some innocent’s life. That wasn’t a factor. What mattered was personal glory.
Every year after May 1st, when the President (way before the communists) announced an increase in salaries, prices rose. The merchants did this to absorb their rising costs. Of course, regular people who did not understand the economy could not care less about buying at a higher price because they had money available. We, regularly smart people, got some personal credit by middle February (merchants expected new inventory and were desperate for space) and could get good deals: white line, brown line, tires, etc.
Things went more or less stable those ten years until the actual thugs took the Main Office. After Hugo’s disappearance, our economists issued plenty of warnings predicting a near economic downturn.
Did hyperinflation impact how people invest in Venezuela?
The relative stability the country once enjoyed back in the lapse between 2003-2012 was because of Uncle Hugo’s iron grip on the meaningful aspects of the economy. The current laws allow seizure of whatever foreign or local company they want, paying the owners the amount they decide, and delaying the payment in real terms as long as they seem fit (usually years). Anyone looking to invest is (or should be) aware of this.
The country enjoys huge reserves of many commodities and strategic advantages such as cheap, abundant energy, natural gas, and qualified people (mostly willing to come back!). A well-managed company could be incredibly profitable.
Nevertheless, this lack of trust was another of the causes of hyperinflation. Once Hugo disappeared, every Venezuelan knew an incoming disaster was on its way. Maybe people didn’t dare to speak it so openly, but you could feel it.
What we never expected was the economy to tank so deep. My take at the time was that there was going to be a major political crisis, followed by a meltdown. A brief meltdown, though. I never anticipated it would be such a prolonged mess.
Were there things that protected you from hyperinflation?
Having a second income was an incredible advantage: with only $50, I could buy groceries for a couple of weeks. I did manage to put away some basic preps like solar energy, a large fridge, a ham radio, and a water well (in our subdivision, we could drill one in our front yard) before the collapse as well.
When I told other people what I thought was coming, and why they should prep, the mockery made me quickly avoid the subject, even if someone else brought it up within conversation.
(I highly recommend watching the entire episode above. That is what happened here.)
Did the media deny hyperinflation?
The official media? Sure they did. Once it could no longer be denied, they started to blame the usual faceless enemies banana regimes use to stoke division: “right-wing extremists,” the “economics war” of “Evil Capitalism,” and so on.
Those guys are experts in diversion, deception, and masking facts. The official media told us “inflation is above normal” because of the “economics war unleashed over our homeland.”
The ones to blame were never those under the red roofing – the “capitalists” were. Their “greed” and “lust for power” were responsible, said the official party line. It was more of the same, boring, hate speech the banana dictatorships in the Caribbean have been using since the ’60s.
Of course, oil-rich Venezuelans swallowed all the crap the think-tanks delivered. The independent media was (and still is) censored, so unless they are outside the Venezuelan borders and their journalists and staff are safe from politically motivated violence, they can’t tell the truth.
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Did the public at large deny hyperinflation?
Nope. We have always had inflation to some degree since 1981. It was a constant in my childhood, a ghost over our shoulders in my younger years, and now a demon in my adult age casting shadows in the distance, albeit we seem to be safe for the time being.
Here is the thing: many people were so used to an inflationary process for so long that when things went out of control, they just remained astonished, money in hand, without the ability to understand what was happening. The spiral was already in place.
It is not like people were in denial. They were never expecting such a sudden increase, even though it was to be expected. Most people stood astonished like the French government when they realized the Pervitin-fueled German Army was running full throttle towards them.
Did the government initially lie about hyperinflation?
Of course they did. They had to put so many zeros to the currency that it made Zimbabwe’s money look like a joke. The real reasons for the hyperinflationary process were because of a plan, and we are slowly realizing that.
Forcing a couple of million people to leave the country would work to ease the demographical pressure and slow down the demonstrations. They didn’t think the people’s response was going to be so massive and traumatic. I remember members of the socialist party dismissing some of the IMF news in a shameless attempt to cover what was going on.
(For further reading, I recommend this independent report. It goes into great detail on all the major happenings and is easy to read. I’m sure you will find it valuable.)
I suppose one could say that…empty scaffolding (I refuse to use the word with ‘G’ referring to them) didn’t exactly lie about hyperinflation. They just refused to talk about it. This is yet another common technique in such regimes – opacity – to keep people immersed in confusion and chaos so that they could then be ruled over and done with as TPTB please.
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What was the tipping point for people? When did they finally realize that the ship was sinking?
Migration increased to numbers we’d never seen before. Crime spiked up in some places, as desperate thugs needed to provide for their addictions, but there were fewer and fewer people on the streets to rob. And when the unlucky remnant were robbed, they didn’t have as much money on them as the thieves were used to taking.
Suicide rates increased exponentially. Companies started to close because there wasn’t enough work, and when they did, they never paid the mandatory unemployment liquidation funds to their employees. Why? Because their bankruptcy was total.
My coworker’s group started to crumble apart: in less than six months, 15 engineers and technicians had quit their jobs by 2017. The next year was even worse.
What happened when that tipping point was reached?
People saw the writing on the wall and started to flee away in ever-larger numbers, as you can see HERE and HERE. Patrimony used to pay for basic stuff like food, house, or car repairs. People went bankrupt. Goods were lost. Unpayable debts were subject to arbitrage and paid with goods. Price controls generated a black market like we never thought we would see. If you want numbers, the hyperinflation in 2018 was 65,000%. Some still know this year as the Year of the Mangoes.
It is interesting to learn that, after talking a lot with friends and family who stayed since I came back, most of them told me that should I have stayed too. They say my situation would not have been so bad. I had a home, some savings, and our mountain cabin was in good shape back then. It would have been possible to endure the tsunami, being just kiddo and I.
I write so my experiences can be a lesson for everybody to learn and a message of hope for everyone out there.
Stay sharp, keep tuned, and be safe!
What signs are you watching for? Do you see any similarities to Jose’s experience? Share your thoughts in the comments.
Jose is an upper middle class professional. He is a former worker of the oil state company with a Bachelor’s degree from one of the best national Universities. He has an old but in good shape SUV, a good 150 square meters house in a nice neighborhood, in a small but (formerly) prosperous city with two middle size malls. Jose is a prepper and shares his eyewitness accounts and survival stories from the collapse of his beloved Venezuela. Jose and his younger kid are currently back in Venezuela, after the intention of setting up a new life in another country didn’t go well. The SARSCOV2 re-shaped the labor market and South American economy so he decided to give it a try to homestead in the mountains, and make a living as best as possible. But this time in his own land, and surrounded by family, friends and acquaintances, with all the gear and equipment collected, as the initial plan was.
Source: The Organic Prepper
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