"There's No Cash To Spend" - Elorza Becomes Largest Venezuelan City To Launch "Community Currency"

Content adapted from this Zerohedge.com article : [Source}(https://www.zerohedge.com/news/2018-03-20/theres-no-money-spend-elorza-becomes-largest-venezuelan-city-lauch-its-own)

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Venezuela's inflation is forcing the citizens of that country to abandon the bolivar. With an IMF estimated 13,000 percent, the price of things like meat are doubling every month.

This is causing the community of Elorza to issue a currency on its own: the panal.

The panal, which means honeycomb in Spanish, can be spent in just a few stores. But residents of one neighborhood desperate for spending cash said they welcome the idea proposed by pro-government groups.

"There is no cash on the street," said Liset Sanchez, a 36-year-old housewife who plans to use her freshly printed panals to buy rice for her family. "This currency is going to be a great help for us."

Amid triple-digit inflation and a currency meltdown, there has been a run on cash in Venezuela.

Buying common items such as toilet paper, or paying a taxi driver, requires stacks of the official currency, called the bolivar.

Elorza is the largest Western Venezuela city and the new currency features the face of a local independence leader.

A western Venezuelan city began to issue its own currency this week to alleviate the hyper-inflationary country’s cash crisis.

The “Elorza” currency, with bills featuring the face of local independence leader Jose Andres Elorza, will be valid in the city of Elorza, near Venezuela’s border with Colombia.

The bills are being sold in the municipality’s offices to ensure that thousands of tourists and residents can trade, said mayor Solfreddy Solorzano, a member of the ruling Socialist Party.

Venezuela’s national currency, the bolivar, has plummeted in recent years amid a crippling economic crisis. Prices are doubling nearly every month and basics such as food and medicine are nearly unavailable.

On top of that, there are shortages of cash itself making basic transactions impossible.

“People do not have bolivars to spend, so we created two denominations of notes,” Solorzano said, adding that some 2 billion bolivars’ worth of “Elorza” had been purchased — roughly $9,000 at the black market exchange rate.

Many in Venezuela earn the equivalent of just a dollar or two a month.

The new currency is limited in circulation but it shows how local communities are willing to take matters into their own hands. Localized currency was proposed by Hugo Chavez. The Maduro regime is indifferent to it.

Meanwhile, with the country's next election set for May 20, one of Maduro's opponents, former state governor Henri Falcon, is promising voters a $25 monthly giveaway should he be elected, Reuters reported.

Delivering on such a promise would be, of course, impossible. Venezuela has less than $10 billion in foreign currency reserves. And strict capital controls and US Treasury Department sanctions make foreign currency difficult to come by.

Still, given Maduro's hardball tactics - and the economic lifelines his country has received, and will likely continue to receive, from China and Russia - Falcon can make all the lofty promises he wants.

In a desperate bid to stave off insolvency, Maduro recently launched the Petro - billed as the first government-backed cryptocurrency. It's backed by 5 billion barrels of oil.

Non-adapted content found at zerohedge.com: Source

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