Venezuelans break off flakes of gold to pay for meals, haircuts

Bloomberg/Alex Vasquez and Ezra Fieser/10-20-2021

“There, in the barbershops and restaurants and hotels that constitute the main strip of one dusty little outpost after another, you’ll find prices displayed in grams of gold.”

USAGOLD note: “There” is Venezuela’s backcountry. We included a note on Venezuela’s hyperinflation just over a week ago (10/14/2021) in our Daily Market Report: “While hyperinflation in the U.S. economy is unlikely, It is a reality in Venezuela,” we wrote. “One of the characteristics of hyperinflation is how quickly it can impose itself on an economy. The chart below shows the rapid depreciation in the value of Venezuela’s bolivar over the past nearly two years. At the end of 2019, it took, as you can see, 45,760 bolivars to buy a dollar. The exchange rate is now 4,133,144 bolivars per dollar. Yesterday, the price of gold in Venezuela was 383,207,885,304,659.50 bolivars per troy ounce, according to Goldrate24 – an indication of its utility as a long-term store of value under even the most extreme circumstances.”

Sources: St. Louis Federal Reserve, Board of Governors of the Federal Reserve System (U.S.)