Hello Hivers, Lions, and Lionesses!
This is my participation in the challenge of the value of HBD in your hometown, launched a few days ago by @leogrowth. And in which you can participate until May 15, 23:59 PST. If you want to read the details, you can check them here.
That said, from the title, you already know that I live in Venezuela. So before I get into the subject with HBD, I will give you a little background on the Venezuelan economy.
Some Background - Venezuela's inflationary process in the last years
Venezuela lived under hyperinflation from the end of 2017 until the beginning of 2022. It was the result of bad economic policies, of which a book could be written, but I will limit myself to say that for many years previous to that, we had an exchange control and a price control policy that devastated the economy. It caused a shortage of basic products and plunged the country into a war economy without going through a real war. This led the country to one of the longest hyperinflations in history. Of which, according to official figures, we have emerged at the beginning of 2022. However, according to the International Monetary Fund, we are still the country with the highest inflation in the world.
Venezuela was under hyperinflation since the end of 2017. According to figures that the government recognizes (so they might be even worst), the annual inflations were around: in 2021 - 687%, in 2020 - 3.000%, in 2019 - 9.000%, and in 2018 (the worst) - 130.000%.
All this with a constant devaluation of the Bolivar against the dollar. And a shortage of cash. After several years, we are beginning to see bolivar notes on the street again. And we have had three currency reconversions in less than 15 years. In which the currency has lost 14 zeros. The last one was in October 2021.
At the moment, there is a kind of de facto dollarisation of the economy. The dollar is used as the reference currency for prices. And transactions are mostly carried out in dollars, even though their use is not official.
And I could go on, but I think I have already given you an overview of the situation.
With all this panorama, it is not surprising that Venezuela has been a fertile ground for the adoption of cryptocurrencies in recent years. Having access in this country to a means of monetary value other than the bolivar has become a way of surviving the crisis. But if that currency is also a stablecoin with parity almost equal to the dollar, the interest in having it is even greater.
But what can I buy with HBD in Caracas?
At the time of writing this:
1 HBD = 0,97 USD = 4,50 Bs
Many of the prices here, as I mentioned before, are referenced in USD.
- Fuel
If anything remains cheap in Venezuela compared to the rest of the world, it is petrol. 1 liter costs 0.50 US$ of freely sold petrol. But in Venezuela, there is also subsidized petrol that the government sells through a system of quota allocation that has a lot of social control, but that is another matter, and it costs Bs 0.11 per liter. So
1 Liter of free sale petrol = 0,485 HBD
1 Liter of subsidized petrol = 0,024 HBD
So with 10 HBD, I can put 20,62 liters of petrol in my 40-liter car. Half a tank that can last me a week if I drive only in the areas nearby and if I don't have to go to the city center. And if I am willing to make the queues for the subsidized petrol, with 10 HBD, I could put 416,67 liters. This is enough to fill the tank of my car ten times, which is the petrol I would need for three months.
- Food
Food in Venezuela is expensive. Prices vary a lot from place to place. In the popular markets, which have proliferated a lot, you can buy some items such as cheese and vegetables a little cheaper than in supermarkets.
The prices I show below are from a supermarket near my home, which is in the expensive range. I only go there when I am short of something at home, and I only have to buy a few things. But to give you an idea.
1 kilo of tomatoes = 3,04 USD = 2,95 HBD
1 kilo of mangoes = 0,96 USD = 0,93 HBD
1 kilo of pineapple = 2,04 USD = 1,98 HBD
1 kilo of green apples = 5,54 USD = 5,37 HBD
1 kilo of lemons = 2,91 USD = 2,82 HBD
On the day I took the pictures last week, already thinking about this post, I bought a few things I needed at home.
I spent 93,94 Bs equivalent to 20,87 HBD. And I bought 1 liter of corn oil, 1 mayonnaise, about half a kilo of chicken fillets, tomatoes, garlic, 1 can of tuna, and 1 kilo of washing detergent. Pretty expensive, isn't it?
There are three of us at home, and the average weekly expenditure on food and toiletries is around 100 HBD per week, maybe a little more. If I do buy fish and seafood, which are quite expensive and have gone up in price a lot. For example, a little over a year ago, the fish supplier I usually go to, had a kilo of shrimp for about 12-14 HBD. Today it costs 20 HBD. It is not something I buy often, but it is an example of how prices have skyrocketed in the last year. Not only in Bs, but in dollar reference as well.
- Eating Out
This can be as expensive as you want it to be. In a mid-range restaurant, the cost per person can range from 15 to 30 HBD. Eating a hot dog on the street costs 2 HBD. A hamburger and fries in a sit-down restaurant cost between 6 and 10 HBD. A big mac combo at Mcdonald's costs around 8 HBD.
A coffee (latte or cappuccino) in a coffee shop or bakery can cost 1,5 to 2,5 HBD. And in some places even more expensive than that.
- Services
Most services in Venezuela are a disaster, and some would say that you pay for what you get since some are cheap. For example, our monthly electricity bill is less than 5 HBD. But service failures are constant. It would be great to pay a little more and have good service, but that is far from happening.
Conclusion and final thoughts
Venezuela has emerged from hyperinflation, but the economy is far from being on the road to recovery.
The false sense of improvement that a sector of the population has is only based on the increase in consumption and the supply of goods to be consumed. But the production of goods in the country is scarce, and the foreign capital that has left after years of bad and restrictive policies has not returned and will not return until there is legal security.
The bolivar continues to devalue daily. The country's infrastructure and public services are in terrible condition. And having access to a hard currency and other payment alternatives remains a priority for the population.
In this scenario, cryptocurrencies, and this case, HBD, has a value that goes beyond the purchasing power. Being able to save in HBD is a great opportunity, and it is even more so if we can have a good return by placing them in the pHBD pool or keeping them in savings at 20% APR.
This is all for now. Thank you for reading!
You can find me at:
Noise.Cash ⊛ Read.Cash ⊛ Liketu ⊛ Torum ⊛ Twitter