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Currency War: Venezuela Devalues Currency By 46.5%

Venezuela Launches First Nuke In Currency Wars, Devalues Currency By 46%

While the rest of the developed world is scrambling here and there, politely prodding its central bankers to destroy their relative currencies, all the while naming said devaluation assorted names, "quantitative easing" being the most popular, here comes Venezuela and shows the banana republics of the developed world what lobbing a nuclear bomb into a currency war knife fight looks like:

VENEZUELA DEVALUES
VENEZUELA DEVALUES FROM 4.30 TO 6.30 BOLIVARS
VENEZUELA NEW CURRENCY BODY TO MANAGE DOLLAR INFLOWS
CARACAS CONSUMER PRICES ROSE 3.3% IN JAN.

And that, ladies and gents of Caracas, is how you just lost 46% of your purchasing power, unless of course your fiat was in gold and silver, which just jumped by about 46%. And, in case there is confusion, this is in process, and coming soon to every "developed world" banana republic near you.
http://www.zerohedge.com/news/2013-02-08/venezuela-devalues-...
http://newyork.newsday.com/news/venezuela-announces-currency...
http://abcnews.go.com/International/wireStory/venezuela-anno...

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I am no expert by any means

I am no expert by any means but it seems to me by devaluing their currency Venezuela is cutting down on their imports, by making foreign goods more expensive, and increasing their exports which will help generate more jobs by making a bigger demand for their goods. This should be good for their trade and domestic economy -- smart move on their part.

false sense of security...

the nations that don't devalue head for a painful correction... but this is a good thing. the nations that devalue simply kick the can down the road.

DJP333's picture

Things are getting crazy!!

I keep telling my friends and family to buy gold and silver, and this is exactly why! Visited my local coin dealer this week and he had a few Ron Paul Silver rounds in, so snagged them off him!

"It’s not pessimistic, brother, because this is the blues. We are blues people. The blues aren’t pessimistic. We’re prisoners of hope but we tell the truth and the truth is dark. That’s different." ~CW

Math

Humph...
Devaluing a currency means it's value is lower by a certain amount. That amount is the inverse of it's price in other currencies.

So, by altering the price from 4.3 to 6.3, the value went down. But not by 46%. It went down by 32%. The article also refers to gold's value in terms of this currency as going up 46%. While this is loosely correct, most people round up when the fraction is larger than .5 so this means it was 47% up.

This is similar to discounting something by 10% and then raising the price 10%. It does not equal back to the original.

It's a race to the bottom

whoever's paper is worth less "wins"...

"If ye love wealth better than liberty, the tranquility of servitude than the animated contest of freedom — go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, an

bump

Soon.... it could happen here.

#prepping

LL on Twitter: http://twitter.com/LibertyPoet
sometimes LL can suck & sometimes LL rocks!
http://www.dailypaul.com/203008/south-carolina-battle-of-cow...
Love won! Deliverance from Tyranny is on the way! Col. 2:13-15

SteveMT's picture

Just imagine an immediate 46.5% increase in everything!

Thanks. You saved me with the bump.

Great find Steve

I Love bumping quality material like this.

Just shared it on Twitter.

There is also lots of bad news starting to flood from Europe.
Something BIG is happening.
This site has lots of info:
http://www.zerohedge.com/

LL on Twitter: http://twitter.com/LibertyPoet
sometimes LL can suck & sometimes LL rocks!
http://www.dailypaul.com/203008/south-carolina-battle-of-cow...
Love won! Deliverance from Tyranny is on the way! Col. 2:13-15