In a Venezuela Ravaged by Inflation, ‘a Race for Survival’

What is preventing, or perhaps more likely - disincentivizing, people of even moderate means from doing this? It would be a trivial way to add a substantial side income that would simultaneously help out countless people, again as this article emphasizes. I never gave much weight to the stories or failed social systems, but this does seem to be very much a recurring pattern. Venezuela is obviously far from an ideal example, but reality itself is also hardly ideal. If we end up with these sort of collapses when systems are less than ideal -- then that alone is sufficient reason to doubt their viability.

How much of this race to the ATM etc. would be a problem if the money supply was digital and everyone could use their phone to make purchases.

I would like to propose a thought experiment and solicit opinions on whether situations like this can be mitigated by using a LOCAL digital (crypto) currency.

Suppose the prices are marked up constantly but there is also a constant increase in the money supply available to the public.

A user of an app could choose to view the prices in their preferred currency (eg dollars) while using the underlying currency so everything would seem more stable.

Then it becomes an engineering problem of storing the amounts as two integers: 1. The number of cents 2. The power of 10 to which to raise the price.

I would love to get feedback on the following: how to get the new money into the hands of the people?

What if there was a system that automatically calculated eg the median amount people spent on food, and issued (a percent of) that amount the next day as Basic Income to everyone in ther account?

Automatically issuing Basic Income based on Local CPI would organically allow people to prioritize necessities such as food before other transactions.

Of course, unilateral issuance of money by the government (eg to pay debt) would rob people of the savings power in that currency. But they could buy non perishable assets as investments and a store of value, including bitcoin.

Under such a system, the currency would then still be usable as a medium of exchange, which can be decoupled from its role as a store of value.

However, if the newly issued money was solely issued to pay the foreign debt, it would not be available for the local population to use. This is the real problem with austerity. The currency is devalued on global markets, making imported goods more and more expensive. Runaway inflation is exponential.

The government would have to BALANCE printing money to satisfy foreign interests with issuing money to its own citizens (eg as UBI to all citizens - which even Ron Paul himself suggested as a better alternative to bailing out the banks).

In other words for every X amount you print to satisfy foreign debts you issue 2X to your own citizens, so they can still buy necessities.

This is not ideal -- but it does allow a country to soften the blow of austerity. Incurring such debts is the underlying problem. They should just default, like Iceland. And issue a new currency to all their people. They still keep paying their debts, even as the price of oil plummeted and they do not have enough real assets to back their foreign promises anymore.

By defaulting on their debts, they can once again get control of their own money supply, which is probably far more valuable to each citizen than the country's credit rating -- paying debts on the verge of bankruptcy isn't doing any of the citizens any favors.

That's the real mistake of the Maduro government in my opinion.

Disclaimer: my company is building a technology to power all the things I said for communities -- doesn't have to be countries. Cities like Detroit or even a remote unbanked village in Africa should be able to have their own local currency and run their own monetary policy, and hopefully using DIRECT democracy rather than representative democracy which can lead to stuff like this. Much of the economic analysis and fundamentals should be automated and available to every citizen, making them informed enough to choose what they want to do, instead of watching their leaders mess it up.

PS: Why is this being downvoted? Do we just have to say "socialism -- so bad -- sigh" and move on without any substantive analysis of possible real solutions to existing problems?

And yet, even in the face of overwhelming evidence, the appeal of socialism still somehow permeates to otherwise succesful countries.

Sure, the lines between Social Security+Medicare vs Denmark vs Venezuela aren't so black+white, but it's clear to me that the desire to destroy capitalism continues to be strong.

It is quite scary to me that people can be so delusional even with the overwhelming evidence of the success of capitalism for the poor and the absolute failure of socialism for everybody.

"Thanks Hugo Chavez for showing that the poor matter and wealth can be shared. He made massive contributions to Venezuela & a very wide world."

-Leader of the Labour party in the UK[1]

"These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina, where incomes are actually more equal today"

-Bernie Sanders[2]

[1] -https://twitter.com/jeremycorbyn/status/309065744954580992

[2] - https://www.sanders.senate.gov/newsroom/must-read/close-the-...