India, Venezuela & Zimbabwe All Have Tragic Cash Problems
The word “cash” means different things in some parts of the world than in the US, Europe Australia and many other of the more stable economies worldwide. The Venezuela crisis has been ongoing, but trials and tribulations in India have meant a population short on cash. Meanwhile, things are “bizarre” in Zimbabwe where dollars go for dollars..with a premium.
In Pushkar, India, tourists have busked for money. They were busking for cash “as a last resort.” The tourists include Europeans and Australians. A continuing shortage of cash in India has led banks to brace for an upcoming payday.
Just weeks ago, as Venezuela continues to fall into economic turmoil, the country made it illegal to take more than $5 worth of cash out per transaction. When its citizens have cash, Venezuelans now weigh it, because the currency is so useless.
“It’s a currency that’s going down the toilet,” says Russ Dallen, managing partner at Caracas Capital Markets, an investing firm in Miami. “No one wants to hold on to something that’s going to be worth 50% less in a month.”
Venezuela reopened its border with Colombia to allow people to go there for food and medicine.
In Africa, Zimbabwe, which has tragically become a posterchild for modern inflation, a new currency does not have the confidence of the citizens.
“We are asking for more cash but not getting it. In the last two weeks we have got only 25% of what we asked. The supply of Rs 500 notes is minuscule. We are not getting Rs 500 notes and it is mostly going to ATMs,” the manager detailed.
“When they start weighing cash, it’s a sign of runaway inflation,” Jesus Casique, financial director of Capital Market Finance, a consulting firm told Bloomberg. “But Venezuelans don’t know just how bad it is because the government refuses to publish figures.”
Im Zimbabwe, the going rate for a $100 bill is $102 in smaller notes.
“It’s an utterly bizarre situation,” said Charles Laurie, a Zimbabwean economist who is head of political risk at Verisk Maplecroft. “There’s a growing sense of being alienated from your money.”
Godspeed to those afflicted.