Tag Archive : Venezuela

Venezuela Economic Crisis

40% of Venezuelan Businesses Close After 3000% Minimum Wage Increase

Venezuelan workers who got a pittance are now getting a slightly higher pay, thanks to a 3000% increase in their minimum wage. What they may not have, though, are jobs.

Seven million employees are now guaranteed 1,800 bolivars per month, which is worth about $20 at the black-market rate, after a minimum wage hike. Venezuelan President Nicolas Maduro proposed the change to increase his popularity, but it’s having the opposite effect. Businesses, already hit by Venezuela’s financial collapse, tell employees they can’t afford to pay them.

“The government sector has the monopoly on imports, the currency market is dysfunctional and there’s hyperinflation,” said Economist Orlando Ochoa. “So, if salaries are increased by decree, and the commercial and industrial sectors cannot sell their products because of these problems, and on top of that because of electricity blackouts, infrastructure problems and the loss of qualified personnel, which is leaving the country, then it’s easy to understand that many may prefer to close.”

Even though there have been multiple comparable moves in the past, none has ever been so disruptive, arriving amid a depression, hyperinflation, and devaluation.

Some companies are restructuring expenses and arranging settlements with employees. Other businesses are just firing workers. Much of the development occurs secretively as employers attempt to evade backlash by the government, which has been detaining those it considers are breaking the rules.

“We have inspections, and they force us to sell at last month’s prices,” said María Carolina Uzcátegui, president the National Council of Commerce and Services of Venezuela. “That takes money away from the business because of the hyperinflation when you can’t even sell at yesterday’s prices because you lose money.”

She adds: “And anyone who protests against these measures runs the risk of going to jail, without the right to appeal, without the right to anything, simply because the official whose turn it was to inspect the store just felt like arresting you. He did it, and that’s all.”

Marcos Vizcaino, 56, a garage owner in Caracas, stated that the wage rise was the definitive setback for his family business of two generations. Vizcaino said the lack of spare parts and hyperinflation had already complicated matters and ended up bringing in less than one customer each day.

“I already told my four employees to go find other jobs,” he said. “I’ve decided to close. There’s no need for me to keep losing money for a third year in a row.”

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. Read More

Venezuela May Sell Gold According To Major Bank

Citibank has stated that Venezuela could sell gold reserves to raise funds for the struggling country. David B. Wilson and Aakash Doshi wrote the report.

“Cash-strapped nations could trigger further downside price risk as the temptation to sell gold reserves mounts,” the analysts said in the Aug. 18 report. “Venezuela is one such country at risk.”  Crude oil prices have hurt Venezuela, which receives over 95% of its export revenues from oil.

Earlier this year the country did sell off some of its gold reserves. In March Venezuela was declared a National Security threat by President Obama. With new sanctions on certain officials, China would no longer be able to fund Venezuela. And so Reuters reported that Venezuela’s central bank was in talks of creating a gold swap to monetize $1.5 billion of the metal. That caused the gold price to fall. Venezuela leader Hugo Chavez had put most of the country’s money into gold.

Crisis Stricken Nations See Interest Increase For Gold, Bitcoin

Numerous nations throughout the world are currently dealing with currency or debt crises of one kind or another. Greece has stolen the headlines where they’ve needed to secure a bailout from the European Union so as to not go broke, and Puerto Rico, a US protectorate, has said it will not have the funds to service its debt. The Chinese stock market has collapsed with the government instituting controls to prop it up, while in Venezuela inflation ravages the food aisle, which have gone bear in recent months.

In China, you see gold is clear winner in the wake of recent turmoil. Included in this article are the regional interest data points from Google Trends.

GoldSilverBitcoinSearchesChina

Interest in gold in China has taken off.

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Regional interest in gold

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Regional interest in silver in China

Included in this article are the data points for regional interest. In China, regional interest in Bitcoin is different than the other countries. Whereas in Greece, Puerto Rico and Venezuela interest in Bitcoin is tied to the main cities of the country, in China the interest appears more diffuse. 

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Regional interest in China in Bitcoin

As you see below, interest in both gold and Bitcoin have increased in terms of Google Trends search queries in Greece. Gold has seen a modest spike, while Bitcoin is clear winner in terms of new, recent interest in Greece.

GoldSilverBitcoinQueriesGreece

Gold has seen a small uptick in Greece located search queries, while Bitcoin has seen a considerable spike.

As in the remaining countries, precious metals queries occurs throughout the nation, while Bitcoin queries is more-so located in Athens. 

GreeceRegionalInterestGold

Here you see Greeks interested in gold live throughout the country.

GreeceRegionalInterestSilver

Here you see interest in silver spread throughout Greece.

GreeceRegionalInterestBitcoin

For Bitcoin, most Greeks are centered in Athens who query Bitcoin.

In Venezuela, gold and Bitcoin have seen an increase in search queries, silver not so much.

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And regional interest in Venezuela: 

RegionalInterestVenezuela

GoldSilverBitcoinSilverInterest
Venezuelans are interested in silver throughout Venezuela.

GoldSilverBitcoinBitcoinInterestVenezuela

 In Puerto Rico, similar trends: 

GoldSilverBitcoinSearchesPuertoRico

 

GoldSilverBitcoinRegionalInterestPR

Interest in gold in Puerto Rico is spread out throughout the island.

 
GoldSilverBitcoinPRSilverRegional

Interest in silver in Puerto Rico is more centralized than gold.

GoldSilverBitcoinRegionalInterestPRBitcoin