Venezuela currency loses 46% overnight.
jmski52
Posts: 22,820 ✭✭✭✭✭
If your savings are in paper-denominated assets, a devaluation can reduce your net worth instantly. Imagine what it's like to live in Venezuela this morning.
overnight currency devaluation
overnight currency devaluation
Q: Are You Printing Money? Bernanke: Not Literally
I knew it would happen.
I knew it would happen.
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Comments
<< <i>If your savings are in paper-denominated assets, a devaluation can reduce your net worth instantly. Imagine what it's like to live in Venezuela this morning.
overnight currency devaluation >>
Good thing there is ABSOLUTELY NO COMPARISON of the USA to Venezuela.
Knowledge is the enemy of fear
Unless Maxine Waters gets her way.
Education System, check. Automotive Industry, check. Healthcare, check. Financial Industry, check. Oil Industry...............
I knew it would happen.
Who is Maxiney ~ baby
This is a great example why everyone should always have a little Gold...just in case.
BTW ...The are plenty of restrictions on US denominated bank accounts in Venezuela as well as taking out cash out of the country etc.
..its important to remember that not long ago Venezuela was the richest country in Latin America and it would have insanity to suggest to anyone where they would be today in terms of living standars, economics and freedoms.
Groucho Marx
Not to worry, they say that one was photoshopped.
Unfortunately, this one wasn't.
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<< <i>If your savings are in paper-denominated assets, a devaluation can reduce your net worth instantly. Imagine what it's like to live in Venezuela this morning.
overnight currency devaluation >>
Good thing there is ABSOLUTELY NO COMPARISON of the USA to Venezuela. >>
For sure Venezuela has the better baseball players...............MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
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<< <i>If your savings are in paper-denominated assets, a devaluation can reduce your net worth instantly. Imagine what it's like to live in Venezuela this morning.
overnight currency devaluation >>
Good thing there is ABSOLUTELY NO COMPARISON of the USA to Venezuela. >>
Yea, we're smarter. We do it a little bit at a time so that no one will notice.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>What's ole Hugo Chaveze down there doing now?
Who is Maxiney ~ baby
Dying!
I was thinking of Chico Escuela, but I checked and he is from the Dominican Republic.
<< <i> Good thing there is ABSOLUTELY NO COMPARISON of the USA to Venezuela. >>
Good point. We know they got their 100 tonnes of physical gold shipped to them. The citizens of the USA (and most elected officials) have no idea if a single gold ounce of the 8133
tonnes in inventory still belongs to them. I'd give round 1 to Venezuela. The US will probably perform an overnight currency devaluation at some point in the next few years.
Venezuela did it first though.
Knowledge is the enemy of fear
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<< <i> Good thing there is ABSOLUTELY NO COMPARISON of the USA to Venezuela. >>
Good point. We know they got their 100 tonnes of physical gold shipped to them. The citizens of the USA (and most elected officials) have no idea if a single gold ounce of the 8133
tonnes in inventory still belongs to them. I'd give round 1 to Venezuela. The US will probably perform an overnight currency devaluation at some point in the next few years.
Venezuela did it first though. >>
I'd venture to guess in this case that one major devaluation is a trend.
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<< <i>
<< <i> Good thing there is ABSOLUTELY NO COMPARISON of the USA to Venezuela. >>
Good point. We know they got their 100 tonnes of physical gold shipped to them. The citizens of the USA (and most elected officials) have no idea if a single gold ounce of the 8133
tonnes in inventory still belongs to them. I'd give round 1 to Venezuela. The US will probably perform an overnight currency devaluation at some point in the next few years.
Venezuela did it first though. >>
I'd venture to guess in this case that one major devaluation is a trend. >>
Most definitely when one considers all the slow motion minor devaluations that are slowly erodiing worldwide purchasing power. No big media deal unless it all happens all at once, overnight. The US has easily exceeded Venezuela's devalution effort but has done so over time so there would be no uproar. Americans are used to little losses of value stretched over long preiords of time. . . they call it "acceptable" inflation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
So is the answer to a devaluation to keep your debts denominated in paper but your assets in physical metals , property , cars , racehorses , art work whatever?
That way you can convert assets to paper at the new rate as needed to pay the debts?
<< <i>So is the answer to a devaluation to keep your debts denominated in paper but your assets in physical metals , property , cars , racehorses , art work whatever?
That way you can convert assets to paper at the new rate as needed to pay the debts? >>
that would be a good plan... if "physical metals , property , cars , racehorses , art work whatever" *never* went down in value..... but they sometimes do.
Liberty: Parent of Science & Industry
<< <i>So is the answer to a devaluation to keep your debts denominated in paper but your assets in physical metals , property , cars , racehorses , art work whatever?
That way you can convert assets to paper at the new rate as needed to pay the debts? >>
It's a matter of what will hold value the best. At the moment paper currency is near the bottom of the list.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Well they go down but would they go down 46% overnight like your savings account would?
In the case of a devaluation people who are owed money will get paid back in depreciated dollars , pesos whatever. The devaluation of the currency is done by the government the lender has no recourse to seize property based on the activities of the government. Assuming you are current on your payments of course .
If you have 50,000 in a savings account you get hammered but if you owe 50,000 the person who loaned it to you gets hammered.
Certain debts would be better than others . Fixed rates would be ok for awhile but lenders would act to subvert them , variable rates would shoot up to whatever maximum the lender could get away with pretty quickly.
As wages go up, everyone moves into a higher tax bracket on the progressive tax scale. Voila - higher tax rates without all the fuss about raising taxes. In the end, it's all about the percentages.
I knew it would happen.
The other part of a devaluation like this is that while us peasants all try to read the tea leaves to figure out what will take place, those in the know get direct knowledge in advance of when and how much .
<< <i>The other part of a devaluation like this is that while us peasants all try to read the tea leaves to figure out what will take place, those in the know get direct knowledge in advance of when and how much .
That's been going on since the dawn of mankind. So what else is new?
<< <i>There won't be any "overnight devaluation" of the US dollar. The US dollar isn't linked to anything that would allow the US government to unilaterally devalue it. The only thing the US can do is continue to trash the dollar by racking up debt and engaging in "quantitative easing." The effect on markets and the relative value of the dollar depends on how other participants in the market react to that, and also on what other countries are doing to their own currencies. >>
Would $50T, $75T, or $100T in debt be enough for an overnight devaluation? Meaning, at some point debt matters, right. I don't know what that number is but it cannot rise forever and there does not exist a class of politicians that want to bring back to Earth.
The dollar is pegged to whatever it currently buys. It gets "pegged" down when it buys less.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Knowledge is the enemy of fear
<< <i>Your dollar's value is increased every time a baby is born. As long as the population grows, demand for dollars grows. The FED needs to print just to keep up with population growth. Excessive printing is a problem, but just because a dollar is printed does not mean all the others are devalued. >>
Looks like the US is suffering from a serious baby deficit. Maybe the FED should consider creating babies instead of dollars.
More people creates more demand. More demand creates higher prices. Inflation is just one more form of dollar devaluation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Liberty: Parent of Science & Industry
<< <i>Should we be concerned about "dollar devaluation" that occurred before we (or our parents) were born? >>
Absolutely not...if you don't expect to live very long.
I am old sufficiently to know a retired NYC firefighter who retired on a $4.5K pension.
Fortunately, Max has passed. That's real for my lifetime.
Knowing that, how much $$$ is enough to retire?
The redistribution of numbers helps some, but hurts others.
As I see, gold is most constant, and therefore a gauge of changing numbers.
I remember walking to school and seeing the sticker left on a new Chevy...$1,900.00.
Naw...don't be concerned.
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<< <i>Should we be concerned about "dollar devaluation" that occurred before we (or our parents) were born? >>
I remember walking to school and seeing the sticker left on a new Chevy...$1,900.00. >>
What was your dad's salary that year?
Liberty: Parent of Science & Industry
<< <i>Should we be concerned about "dollar devaluation" that occurred before we (or our parents) were born? >>
Yes, the affect is cumulative. We should be concerned all the way back to 1913 when the bankers took control of the value of our money.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Liberty: Parent of Science & Industry
<< <i>What's ole Hugo Chaveze down there doing now?
Who is Maxiney ~ baby
word is saying his last prayers ( and rightously so )
<< <i>There won't be any "overnight devaluation" of the US dollar. The US dollar isn't linked to anything that would allow the US government to unilaterally devalue it. The only thing the US can do is continue to trash the dollar by racking up debt and engaging in "quantitative easing." The effect on markets and the relative value of the dollar depends on how other participants in the market react to that, and also on what other countries are doing to their own currencies. >>
Sure they could. All they have to do is to declare that the new $100 Benjamins they've been stockpiling for the past couple of years are worth the same as two older ones. Instant
devaluation. I think at some point in the next 3-10 yrs the US will have to perform an actual devaluation. They did that last against gold in 1933-1934 when circulating "monetary"
status was removed from gold. Gold doesn't circulate today either. They could easily say that they are revaluing the nation's gold reserves from the stated $42/oz to say $2200/oz.
But, I don't think they'd go that way.
Cohodk, I am exhausted from 3 days of shoveling, not to mention 2 days w/o heat. But it didn't affect my posting.
The population growth and expenditures from new born babies each year doesn't come close to matching the 8-10% increase in M2 every year ($800 BILL to $1 TRILL).
But if newborns are costing us $1 TRILL per year, I'd better start investing in Pampers, baby gifts - toys - clothes. Ipads/Ipods for babies might be the next big thing.
<< <i>Should we be concerned about "dollar devaluation" that occurred before we (or our parents) were born? >>
Of course we should , if prices and salaries rise in tandem then daily expenses may stay affordable but inflation still steals your savings. that $1000 you put away in 1960 bought a nice almost new car but after it won't now. You would have to make a constant 8% return without taxes from 1960 to 2013 to turn that $1000 into a nice one or two year old used car in 2013 Even if you did manage to avoid paying incremental taxes you would owe them at the sale . You would pay taxes on a 95% increase or more and almost half of that taxable gain would be illusionary because it was due to inflation.
Inflation destroys savings ruthlessly , Inflation is not benign, its not an accident , its deliberate government sponsored theft.
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<< <i>Should we be concerned about "dollar devaluation" that occurred before we (or our parents) were born? >>
I remember walking to school and seeing the sticker left on a new Chevy...$1,900.00. >>
What was your dad's salary that year? >>
I remember my father buying a $17,000 house is SoCal in 1966. He made $19K as a machinist. Back then a Flying Tigers Captain could buy a new Cadillac for one months' pay.
Today, I can buy a house 3X my yearly net income.* And a FedEx (bought 'Tigers in 1989) Captain cannot buy a new Cadillac with one months' pay.
*sizable downpayment
Knowledge is the enemy of fear
I knew it would happen.
<< <i>This thread is really making me consider putting my deflation hat back on. >>
You should buy a split, half and half hat. Inflation and deflation. Both aspects will remain in this market cycle to the bitter end. There cannot be just price inflation or just price deflation. The only sure thing is that monetary inflation will continue unabated at a min of 8-10% per year.
A spending binge by Chavez, 58, before the Oct. 7 election may double Venezuela’s deficit to 7.8 percent of gross domestic product by year-end, according to Bank of America Merrill Lynch estimates, deepening the need to devalue the currency to obtain more bolivars per dollar from oil exports.
This is what begins a hyperinflation. Hyperinflation is when the public lose confidence in the currency. It isn't specifically driven by producing too much currency, but by general mistrust in the money and the fear that it will be worth less the next day. This makes the government need to print higher denomination bills in greater quantity.
<< <i>This was planned for and predicted for many months.
A spending binge by Chavez, 58, before the Oct. 7 election may double Venezuela’s deficit to 7.8 percent of gross domestic product by year-end, according to Bank of America Merrill Lynch estimates, deepening the need to devalue the currency to obtain more bolivars per dollar from oil exports.
This is what begins a hyperinflation. Hyperinflation is when the public lose confidence in the currency. It isn't specifically driven by producing too much currency, but by general mistrust in the money and the fear that it will be worth less the next day. This makes the government need to print higher denomination bills in greater quantity. >>
Thank you...."Full FAITH and credit."
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/14_Russia_&_China_Know_Final_Currency_Devaluation_Is_Coming.html
Or does Venezuela have effective capital controls that kept people from making money transfers?
I also have to wonder what's going on with the new $100 bills that still haven't been released. Surely, Crane Paper has that little crease problem ironed out. With the new security features being built into the new hundreds, are they going to require a complete swap for all existing currency? Just wondering.
I knew it would happen.
Locals probably have some insight just from where they live. Mexico, Argentina , Brazil , Peru etc those countries have a history of devaluations over the last century .
Argentina had an episode in the mid 2000's conditions in 2006 in Argentina
<< <i>Locals probably have some insight just from where they live. Mexico, Argentina , Brazil , Peru etc those countries have a history of devaluations over the last century .
Argentina had an episode in the mid 2000's conditions in 2006 in Argentina >>
Good article.
I've spent mucho time down there in the last decade. There were many po'd Argentines when their "401K" got "nationalized." They were promised a gov't stipend and got nada.
"The needs of the few outweigh the needs of the many" - Evita*
*jklol
<< <i>So is the answer to a devaluation to keep your debts denominated in paper but your assets in physical metals , property , cars , racehorses , art work whatever?
That way you can convert assets to paper at the new rate as needed to pay the debts? >>
<< <i>Locals probably have some insight just from where they live. Mexico, Argentina , Brazil , Peru etc those countries have a history of devaluations over the last century .
Argentina had an episode in the mid 2000's conditions in 2006 in Argentina >>
Argentina is having an episode right now with 30%/yr price inflation in place (ie hyperinflation).
I guess the only thing remaining is to increase my workload and not raise my pay. Good thing they didn't also raise my taxes.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey