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RE: Crypto: Hope for Venezuela?
Dear Piotr, there are many ways in which one could prepare for potential hyperinflation. I think that it would be better to start raising our own food- like cultivating mini gardens or gardens in a pot or stocking on basic needs like rice, flour, wheat, etc. It does not also hurt to start making inventories on items that can be traded like gold or any precious items. Above all, when shit would really hit the fan as they say and money would really worth nothing, surplus stocks on basic commodities can also be traded.
i think that for the debt part, it will not really be cancelled. The payment would be suspended until the inflation is corrected.
Hi @nurseanne84,
I agree that in a case of hyperinflation the best way to prepare is to ensure that you have all the commodities you need to survive, like food, water and shelter. I think I would also try to build good relationships with my neighboors and find ways to help each other. To have things of value that are not touched by inflation such as gold or any other device that could be traded would be helpful.
In Venezuela, one of the big problems is that cars, machines, health equipment, are not working anymore because spare parts can't be found to reapare them. Hyperinflation stops economical transactions and it is a kind of reset of the economy. A new economy can only be started when a new means of transaction (money) fullfill the trust of the people.
Best regards,
Achim
That would be a viable option if you live near a river and can transport water easily, but what if it is not? What if the supply systems fail? That happens currently in several cities of Venezuela. In my area the supply collapsed more than 5 years ago. The invasions of vacant land, propitiated by Hugo Chávez, created chaos. These scoundrels and opportunists diverted the pipes, leaving whole settlements without supply. But that's not all, they also made illegal connections to the electrical system and faults are also bread of the day. The "parasitic" mass of the country enjoys the populism strategy of this government. The working masses, who spent their time in going to universades "for free", who want a better country, we have to buy water.
It seems to me that in order to avoid a situation like the Venezuelan one, we should begin to educate children in schools with subjects that really involve them as citizens. For example, learn to detect corrupt politicians so as not to vote for them. Because the problem of this country is not only the government of Maduro, it is the "opposition" politicians who joined forces in secret with the government to betray Venezuela.
If children learn from their first steps that socialism, communism or populism is equal to POVERTY, HUNGER and DEATH OF A COUNTRY. They will never allow the case of Venezuela to happen again.
(I used the Google Translation)
Eso sería una opción viable si vives cerca de un río y puedes transportar el agua fácilmente, pero qué si no es así? ¿qué si los sistemas de suministro fallan? Eso pasa actualmente en varias ciudades de Venezuela. En mi zona el suministro colapsó hace más de 5 años. Las invasiones de terrenos baldíos, propiciadas por Hugo Chávez, crearon un caos. Estas personas sinverguenzas y oportunistas desviaron las tuberías, dejando a urbanizaciones enteras sin el suministro. Pero eso no es todo, también hicieron conexiones ilegales del sistema eléctrico y las fallas también son pan del día. La masa "parásita" del país disfruta del populismo estrategia de este gobierno. La masa trabajadora, que ocupó su tiempo en ir a universades "gratis", que quiere un mejor país, tenemos que comprar el agua. Me parece que para evitar una situación como la venezolana, se debe comenzar a educar a los niños en las escuelas con materias que realmente lo involucren como ciudadano. Por ejemplo, aprender a detectar a los políticos corruptos para no votar por ellos. Porque el problema de este país no es solo el gobierno de Maduro, son los políticos "opositores" que unieron fuerzas a escondidas con el gobierno para traicionar a Venezuela. Si los niños aprenden desde sus primeros pasos que el socialismo, comunismo o populismo es igual a POBREZA, HAMBRE y MUERTE DE UN PAÍS. Jamás permitirán que el caso de Venezuela vuelva a ocurrir.
Thank you for your amazing comment @thaishps
Are you also from Venezuela?
Piotr
Hi @cripto.piotr. Yes, I am.
hi @thaishps
I hope not Caracass ? I was told that it's the worst place to live in your country.
Piotr
I live in the capital of the Bolivar State. The conditions of this country are so chaotic that it is almost impossible to decide which city is the worst to live. But we should ask the habitants of the mining towns of the Bolívar state such as Tumeremo or El Callao if they consider Caracas the worst city to live. These populations are besieged by mafias, assassins and Colombian guerrillas. Its inhabitants disappear without leaving traces, others are located in common graves and many bodies are unidentified. No one investigates. The government is not interested.
There is a war for the control of gold, diamonds and coltan between the government, the guerrillas and the miners. There are mining camps that are massacred in a single night. 80 corpses? Yesterday someone just told me that I'm naive. They have counted up to 200 murderous people! A politician @AmericoDeGrazia (twitter) has been denouncing what happens but the government began to harass him.
I avoid talking as much as possible about this topic, the anguish raises my blood pressure. So I'm going to listen to Michael Bublé to get my center back.
Dear @thaishps
That is shocking :(
If things will get better and people will have opportunities to make enough for a living, then it will change. Lack of opportunities is a killer.
Im sorry if I made you feel that way.
Thank you for your amazing reply.
Yours
Piotr
Thank you for your amazing comment @nurseanne84
I'm trying to figure out how hyperinflation can affect those with debts. And I remember hearing from Polish older generation, that when strong inflation hit out country (back in the days) then most lost their savings but many got weatlhy because money they borrowed to start up businesses.
Or got a morgage, which they could pay off a year or two later pretty much fully (assuming that they survived financial crisis somehow).
So Im really wondering, how does it work with debts during hyperinflation?
Yours
Piotr
Hi @crypto.piotr,
Making depts in a country that risks hyperinflation can be very tricky. I can relate from what happens in Turkey where inflation is quite high at the moment.
The only way to fight inflation for a central bank is to increase the interest rates. So most of the time inflation comes together with very high interest rates. So if you have depts that have fluctuating interest rates, your interests will be adapted and you will have to pay much more. You have to imagine that probably your income is also in this currency and it will be equally devaluated. So even though your dept might seem lower in terms of dollars for example, the interests that you have to pay are much higher.
I have friends in Turkey that took depts in foreign currencies but this was also a catastrophe. Even though interest rates were very low, due to the inflation of the turkish money, the interests that had to be paid in foreign currency represented always a bigger part of their income. Their dept grew bigger in Turkish money and in the end my friend had to sell his house and could hardly cover the bank costs.
Conclusion
I would only take depts in such a situation if I had a revenue in a different currency.
Thanks @achim03 for giving me example of turkey. It surely allowed me to understand things better and to see a bigger picture.
That can be very risky. I have my mortgage in CHF (as many polish people do) since their interests rates are super attractive comparing to Polish ones. But it's scary to think what can happen if our currency would lose value and CHF would not. I would be burned alive with my debt.
And ENJOY your NY Celebrations.
Yours
Piotr
Hi @crypto.piotr,
We probably have the lowest interests worldwide. At the moment I have to pay to keep my money on my bank accounts... (negative interests). So mortgages are indeed very cheap in CHF. Mine is 1% p.a. at the moment so I can't complain :-).
I believe as long as our central bank tries at all costs to keep CHF pegged to Euro there is no big risk for you.
I wish you a happy new year !
Regards,
Achim