Things have changed a lot since this was written in December.
I live in Caracas, there's massive national food shortages. Now you can't have 3 meals a day for a month with 100€, and would spend quite some time finding it (on the black market). Last time I saw sugar, it was around 3€ per kilo.
Edit: If you want a realistic picture of how is life today, read this piece, written by a foreign journalist that actually lives there (sadly, most things I see in foreign media is written from outside): http://bigstory.ap.org/article/7c0464c1dd404aca99458a8a19930...
Yep, I'm living in Barquisimeto and between me and my wife we are making around $160 per month. We are scraping by.
Plus we've got a 3 month old baby, who luckily is exclusively breastfeeding, because baby formula is practically non-existent.
We had to pool about $60 to buy a sack of sugar in the black market and divide it among a bunch of family members.
Things are starting to look a lot more grim as time passes by and you realize that the government doesn't have the will to fix things and they are not going to go peacefully either. The outcome here is most likely going to be a violent one.
There's something I'm not understanding here: both you and the GP are commenting on a food shortage and Sugar is the food that you both mention as being hard to come by. If there is a food shortage shouldn't sugar be the last food you would care about obtaining? Or are basic necessities (rice, etc) readily available and it's only luxuries like sugar that are hard to find?
All the basics are hard to come by: rice, flour, milk, toiletries,etc. I'm just commenting about sugar because GP commented on it. I assume because it's one of the items that has just disapeared lately.
I'm actually not really worried about sugar because I barely consume it. We bought the sack of sugar because a cousin of mine used to make ends meet with a small cupcake business she used to make for parties,etc. and now she can't find flour or sugar.
I wrote a comment about this before: if you have enough money you can go out and eat lobster and whatever fancy food you want. The things that are almost impossible to find are basic things most people need to survive like flour, milk, toiletries, medicine,etc.
If you've never been poor then you won't understand that coffee and tea (therefore sugar) are not luxuries, but a way to keep your sanity. The alternative is taking to the streets
I'm not sure really, the government is not going to leave peacefully, and while they are in power they are not going to do anything to improve the situation.
One important thing to understand is that the government is in the hands of an incredibly corrupt military that are involved in drug trafficking and all sorts of crimes. They know that if they ever leave power, they risk having to face justice sometime.
Right now things are not looking good for the country. My situation is not even that bad compared to most of the country. I mostly worry about my parents who are older and have to survive on their meager pension and whatever my sister and I can help them with.
It looks like the only way out unfortunately is through the airport.
I often read that gold is superior to fiat currency, but how would any kind of currency or precious commodity make a difference in this case, since demand is outstripping supply of finite tangible goods.
It wouldn't. Don't believe what you read on the internet about money. The goldbugs are a vocal minority, not taken seriously in real economics discussions.
Theoretically, gold has more robust ties to reality, so it would have value elsewhere; this is in contrast to the Venezuelan currency, which I expect (though don't know for sure) is inflated like crazy. If that's true, then it could mean that some enterprising Colombians (or someone else nearby) might find it worth their while to smuggle food in for the gold or gold-backed currency, which should be exchangeable at a predictable and stable rate.
Having said that, it's an absurd notion. Maintaining a gold-backed currency in that shitshow, even if someone were so inclined, would be like carefully setting the tables for dinner on a sinking cruise ship: it's cool that you're enthusiastic about doing your job well, but there are some pretty important people screwing up in really important ways, and your efforts aren't going to get you anywhere.
In the time before the wall fell most communist countries had an 'official' (ridiculous) and a black market exchange rate much like the one in the article. You were forced to exchange a certain amount of money for every day of your stay at the official rate, if you managed to smuggle just a few extra notes into the country and exchanged those on the black market it would usually translate into 'more money than you can sensibly spend'.
The reason those black markets are so popular is that people living in a country like that far prefer to hold on to some hard currency instead of the local currency which is devaluating so fast that even a few weeks can make a huge difference. Saving the local currency makes no sense and hence the black market materializes.
One person I know paid off a mortgage entered into a few years earlier with a single months pay, rapid inflation creates all kinds of havoc.
As a Spanish native speaker who knows Venezuela pretty well I find disturbing to hear you could live well in Venezuela with USD100.
First, unless you are a complete sociopath, just seeing so many people suffering to just buy food(or medicines) is a traumatic experience.
For a doctor to operate you, you need to bring the medicines first!!
Next, you will risking your life in every corner. In some South American countries life is worth nothing, but in Venezuela it is another level. If you are an outsider you have to be very careful. Venezuelan people have gotten used to it and they know subconsciously what not to do, while a European or (North)American can make mistakes easily, and they have too much money.
When Venezuelan people find a robber, they will lynch him, police will come so people do not kill him.
The country is near a civil war. Hugo Chavez created a populist law called "Referendum revocatorio" that if the Government did something against the people, the people could remove it from power. The opposition is trying to use this law, but Maduro opposes it.
Of course the people in power do not want to go out of power by any means, specially when in Venezuela every good job position is occupied by pro-Chavez people, they are "more equal than others" and will lose everything if they pass the law.
Venezuela has a big army, and this army is directly supported by Russia, so given that Venezuela oil reserves are the biggest in the world(albeit bad quality) it is very dangerous as lots of other countries could intervene and create a proxy war.
It's staggering how quickly things can change. In 2014, Venezuelans were some of the happiest people in the world, and according to Pew happier than the average American [1]
Now it easily tops the Bloomberg misery index for the second year in a row [2]
This guy seems like a decent writer. Apparently, if I hired him at US rates, he would be wealthy beyond his wildest dreams. Why isn't there more remote work going on?
I have a few friends who hired programmers remotely, they had to fly down with cash to pay them, no other way to get them money. Eventually the situation got too dangerous despite the incredible wage arbitrage they were getting by paying in US dollars. (too dangerous for the employees who were getting robbed frequently, and the bosses to carry the cash down there)
Did they look into Bitcoin? It seems tailor made for this situation. Immune to hyperinflation, difficult for offline criminals to steal, and difficult for the government to block. There is a Venezuelan Bitcoin exchange SurBitcoin and also LocalBitcoins.com, though I don't know the feasibility of using either right now. But at least the initial payment would be no problem.
I've never really looked in to BTC because here you can sell dollars much easier. Although I can see that as a good way to receive dollars for those that do not have any other way.
Right now, $1 = $1004 VEF
I see that 1 BTC = $583.79
From localbitcoin.com I see people selling in Venezuela at around 628000.00 VEF / BTC. So the price is the same.
I think what's going on, is they are calculating the price of the dollar at one of the govt rates of 645 VEF per dollar.
That's not realistic. Anyone with dollars in Venezuela is going to sell them at the black market rate of VEF 1000 per dollar.
Of course, the black market rate is illegal here and the government even went so far as blocking the black market rate information websites here. That's their idea of economic policy.
EDIT: Just realized, surbitcoin rate is around BsF 600k per Bitcoin. We use the dot (.) as the thousands separator.
I know Huawei and ZTE pay the very first employees they hired when they first setup offices here in Venezuela in USD and they are all paid in accounts in the US.
It used to be pretty easy to open an account in Panama or the US from Venezuela, don't know if that has changed. The thing is getting the funds for the initial deposit.
That was last year when the crisis could still be attributed to incompetence, mismanagement. The situation has changed considerably since then.
I'm going to call it now: the Venezuela crisis is not incompetence after all. It's the first steps of a highly competent plan to do what several other communist governments did last century: bring about the death of a large percentage of the country's population.
I don't lightly advocate military intervention. I think it's almost always the wrong thing to do. But I'm advocating it now. The communist government of Venezuela needs to be taken down hard and fast, before this turns into full-blown genocide.
I said that they were getting a terror famine ready last year and everyone thought I was a lunatic. The idea, pioneered in the Soviet Union in the 30s, is that the government has to control all distribution of food and goods produced by workers to earn hard currency abroad by exporting the food and goods instead of feeding people domestically so it can use the proceeds to "build socialism". That means they have to confiscate factories and force people onto collective farms who don't want to be there as they're doing now. Sure they could have a normal capitalist economy and just tax them like a normal country, but this is communism and they have to remove the "capitalist running-dog exploiter" class from power and give all economic power to the government.
If you want to read about Soviet forced collectivization and all that messy history for a preview of what's coming up, this is a pretty good source:
Ctrl-F for "Collectivization" and start reading from there, or read the whole thing if you want the background.
Remember, the guys running Venezuela are communists. They've read up and talked with the Cubans about how the Soviet Union was set up and run, etc. They like that model and think it was a good idea. They are simply following the cookbook. This includes the propaganda that everything bad happening is due to foreign saboteurs, right-wing reactionaries or unfortunate, but soon to be remedied, mistakes.
They've got the forced collectivization already to go:
Although they are probably heading that way if Maduro can get away with it. I still think the food shortages are incompetence rather than design though.
Rich are blocking food to the poor in attempt to scare them from supporting the Bolivarian Revolution. Youtube videos also show Venezuelan stores hiding food to cause shortage.
Yes that's the story as told by the government and the state funded media like Telesur, your source.
They wouldn't say anything about how the food imports are controlled by the military and the government and how they've stolen more than $50 billion, as admitted by Chavez's former economic minister.
A lot more sources than Telesur but you have to look beyond Western news media. I hope the Venezuelan military does take control away from the US backed gusanos who are withholding food from the poor in an economic war to sabotage the Bolivarian Revolution. US orchestrated attacks can also be seen with the USAID fake 'Twitter' in Cuba to destabilize the government. ABC News even reported Peace Corps volunteers and a Fulbright scholar were asked by a U.S. Embassy official in Bolivia "to basically spy" on Cubans and Venezuelans in the country, according to the Peace Corps personnel and the Fulbright scholar involved. US interests can be seen with Brazilian vassel elites tied to US, orchestrating the impeachment of Brazil's Dilma Rousseff after NSA spied on Rousseff and discounting the 54 million-plus Brazilians who reelected her. You can see how the West respects Latin America with how Bolivia's Evo Morales had his government plane force landed and he was detained in Vienna. You can also look at how Venezuela's President Chavez, Honduras' President Zelaya, or Haiti's President Aristide were all kidnapped with Washington's blessings. Former covert agent John Stockwell says U.S. has killed 6 million in covert operations in the Third World. All this information does not come out of Telesur, and if you were half honest you would see a pattern here.
Why doesn't telesur say anything about the massive corruption of the government officials that have dilapidated more than $50billion dollars as admitted by chavista ex-ministers? Or the fact that most of the former productive lands and industries that were confiscated by Chavez are now broke and don't produce anything?
Look for the cases of Agroisleña, Fama de América, Sidor,the sugar factories all in govt hands, the formerly productive lands in Sur del Lago and a looong line of etceteras. Formerly productive industries that Chavez confiscated, put under supervision of corrupt military command that now don't produce anything.
Look for all the corruption in CADIVI, the agency in charge of the currency exchange that gave out billions of dollars to the military and their buddies The thousands of tons of food imported by the government for PDVAL left to rot in the ports of the country because once the food was bought and imported it didn't matter if it actually got to the stores.
Seriously, it gets tiring when someone that does not have the tiniest idea of what is actually going on in the country brings out the tired old argument that everything is the USA's fault.
You want the return of Venezuela to its former status as oil colony and wholly owned subsidiary of the United States. Tired argument? The 4 million dead in Middle East is the fault of the US and the Western allies. One need only look at the conspicuous reappearance of goods in the immediate aftermath of the right wing Unity Roundtable (MUD) victory in the December 2015 elections to see how connected the food supply problems are with political agendas. The oil collapse is an orchestrated assault on oil-producing nations targeted by the US.
See, this is where it's evident that you have no clue what you are talking about. There was no reappearance of goods after the MUD won! The government has actually been making fun of this because some of the MUD candidates said they would help the goods reappear once elected.
The shortage situation has been constant and getting worse since last year. I actually live here! I'm not reading about this from some government funded propaganda machine from the comfort of my fully stocked home.
You clearly have no more arguments beyond they tired old "everything us the US fault". I already gave you several examples of the government corruption that led us to this situation and you STILL come back and tell me about the middle east, oil colonies, how it's all a plot by the US, etc?
I should go to the food lines tomorrow and try to explain that to people. I bet it would go down really well with everyone there!
Haha your superior argumentative powers sure got me there!
Please, next time try to be better informed before making a fool of yourself.
I understand that the US has a shitty foreign policy, but that doesn't make every "antiimperialist" government the good guys. The world is not black and white.
Curious how people who have family members in Venezula are remitting funds to them? Do they have exchange funds at the official rate or is there ways to send Dollars directly.
If you want to experience living "like a baller" for a low amount of money (for the US), there are many great places to go that are much safer than Venezuela.
Edit: If you want a realistic picture of how is life today, read this piece, written by a foreign journalist that actually lives there (sadly, most things I see in foreign media is written from outside): http://bigstory.ap.org/article/7c0464c1dd404aca99458a8a19930...