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Financial System and Transactions In The Aftermath Of Venezuela´s Economic Collapse

Avatar for Jose Martinez Jose Martinez  |  Updated: January 20, 2020
Financial System and Transactions In The Aftermath Of Venezuela´s Economic Collapse

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This is an extensive topic. I´ve asked constantly about it all these years after we left (it seems to have been many years ago ☹ ) I´ve been abroad to friends and family. Those receiving the devalued national currency are taking the worst part. Those with some land and who know how to grow a few crops or take care of some kind of cattle, poultry, rabbits or similar, not so much and are making a living with decent standards. The national currency is being used for electronic transactions, mostly. 

Venezuelan currency has lost so much value it is used to make crafts that are sold on the street. This picture shows Venezuelan refugees selling crafts in Bogota.

The mess with the hyperinflation already rendered paper currency almost useless except for other transactions that can´t be made like that: gasoline, some retail items, like small portions of coffee and sugar, and other similar ones. Those running a shop, usually get paid with some of the most popular payment systems worldwide. There are plenty of people with accounts in Panama or somewhere else, in USD. 

Go figure. 

A mechanic charges $10 to check your car, and will ask for cash or electronic money. A timing chain change for an Aveo is $180 and that is just the labor. Changing and balancing a new set of tires, $20. Scanning your car computer same price.  

People have looked for plenty of ways to keep going. The dollar price is artificially manipulated, and really no one knows how, nor the owner of the websites where the price are updated to the minute. Websites like “dollar today” and many others publish this information. 

People asking, say, $350 for something with a price of $250 will soon find out they’re being greedy and no one is buying them. I have seen people selling something being listed for MONTHS, and often they finish by not selling. Inflating a price in USDs is not so easy, and I love how that thugs learn the lesson the hard way. That’s more than enough to blacklist them.  

Whether these sites announcing “dollar prices in Bolivares (our currency)” is reliable and trustable or not, it´s another issue. The country already had a foreign currency exchange platform, but after the communists took over in 1999 this changed for the worst (commies hate people using currency from the free world, have you noticed it?). Traveler checks were banned, and no one could freely buy currency of any kind, anymore. This was the first step. 

The excuse? To avoid the “flying capitals’ ‘. We should know this was not true, but with the oil prices back then and the country experiencing a huge positive flow of money, with Hugo managing the checkbook…well, you know. 

As usual in sociopathic politicians with resources that don’t belong to them, it was used to establish a network in the entire Caribbean to take over the OEA (Organization of American States in Spanish). 

And to buy another support, like the one from Belarus, and later some more radical alliances that now are exploding in the face of these gangsters, like the one with Iraq, and much worse, the one with North Korea. Not my business, tough. 

Financially, I’ve suffered a financial tsunami like I never thought would happen even in my wildest dreams. Savings washed away, and investments paralyzed. The only positive thing about all this, is the mortgage debt being statistically insignificant. 

Of course, it’s not like it matters now in this mess where even the employees of the seized banks flee away after they saw their wages dilute. Private companies are still holding, but the mafia makes everything in their possibilities to mess with their operations. Tax stuff, permits, you know how it is. 

People need to keep working, and charging their fees, and buying food. Somehow life must go on. 

Modern technologies have worked in favor of us, although have been used to screw people and business, by the lack of scrupulous of the gang. Those gangsters are trying to impose their own cryptocurrency, the “Petro”.

 It’s a valueless invention. 

It´s not backed up with ANYTHING. 

They have created a matrix with their propaganda machinery to deceive people, and make them believe this backup is “oil reserves”. Guess what. Our Constitution (yes, the same one Hugo left us) FORBIDS using the reserves for any financial mechanism, like those cryptos and other derivatives. Such as this…invention of the “Petro”.

 The very own concept itself already locates this thing in another niche, quite different to a cryptocurrency. It’s just another means to launder money according to all the investigators. They will sell in USDs, but they won’t exchange the other way around. Having Petros just will buy you some food after days in a row, and some other taxes for important paperwork. They even try to impose that deceiving fake crypto to the airlines, so they have to buy fuel.

And in one of the most hypocritical twists any “revolution” has experienced (remember when Castro ordered to close the cabarets?) we have…this!! (Casinos now will have to work with the “petro” altcoin)

It was something to be expected though. In the past, the origin of trade was based in what people needed, and what valuables they had available. Verbal agreements to set a fair price was a standard. Civilization brought upon (as we all know) just a new method of implementing value exchange. It´s exactly the same situation now but in the digital era. There is an infamous office, the SUDEBAN, supposedly intended to control and regulate financial and banking institutions.

Of course, this is just another control mechanism to impose over the citizens and crush and restrict the economy, making everyone dependent on the ruling gov-mafia. This is an intricate conglomerate of bureaucracy institutions, to dilute responsibilities and asphyxiate the private initiative of creating business. This is a hard, long and expensive process in Venezuela. Therefore, plenty of people just go commando, business-wise.

Taxes in Venezuela are just a joke. For some important paperwork like passports ($200 each) of course, they are updated, as the mafia does not have another means to get liquidity, but for most of the transactions, they charge until not so much time ago, the useless national currency.

Lately, they have decided to charge in USDs, something that the USA Government should forbid and sanction much more severely, as it is oxygenating the establishment already qualified as a rogue state. 

And I mention this “institution”, the SUDEBAN because after they have been working against the citizens for years now, impeding people to manage their accounts in local banks in Venezuela and in the national currency, by BLOCKING the foreign IPs, illegally allowing people to access to their financial resources, and they affected thousands of innocents in the process. 

This generated a huge crisis, and an incredible opportunity for corruption (still in place). The IT people at control of the system that blocks the accounts if they go over a limited amount, ask for a bribe to unlock the accounts. This is now a common practice, with lots of foreigners (living in Venezuela!) negotiating with money shipping from overseas, and transferring money to the relatives of those who deposit in their accounts in other countries. 

Huge fortunes are being made with this illegal and highly unregulated exchange scheme, and the national currency just remains circulating in a huge downward spiral. Without the creation of wealth by other means than money laundering, the question is how long this scheme will be able to hold itself before spreading to the neighboring countries. We all have seen what happened in Chile and Ecuador, and know where the origin was. 

Important note: for those fans of the PM, they´re on the right path and they will have good leverage. In the Argentinian collapse, people sold broken gold jewelry, directly using it to buy food. However, in order to be really effective, those interested in this type of exchange scheme must-have tools and knowledge enough to avoid scams (something incredibly common). As a matter of fact, the deal to be expected is treated initially as a scam. Once some degree of trust is established, then it is much more possible to barter.

 Not just scams are frequent. There’s a threat much more dangerous: armed robbery.

 Criminal organizations in Venezuela are in a level that have nothing to envy to the most developed countries. They have intelligence, they sell information, have their own companies to launder, and it´s very likely a high degree of infiltration in the LE institutions. 

That being said, selling (or buying) gold openly, in a “pawn shop” is Russian roulette. You go with $500 of gold, sell it, they give you the cash, text after you leave and say how you’re dressed or the plate of your car, and two or three blocks away, couple of guys in a small motorcycle will stop in front of you and peel you off everything valuable, possibly even shooting if they´re high enough.  

A possible solution? Using a faster motorcycle. Or a large car to stomp over someone idiot enough to get in the middle. Wear a hoodie and shorts, for instance, and keeping gym trousers in a backpack, taking the hoodie off and wearing the gym pants over the shorts immediately after leaving the place so your description can´t be found. Or have some friend or your husband/wife outside, give the valuables and go home via different roads. 

Sounds exaggerated? Well, living under situations of economic collapse usually is not a walk in the park. (I will write an article about this specific experience once I´ve come back)

In the Argentine experience, the wealth accumulated by the savers disappeared.

I know someone who was there for those years. One of her neighbors committed suicide, like many others. This is a consequence of collapse, as everyone informed about the crash back then in 1929 knows. I will write another article with that specific topic soon though.  

It’s quite interesting to learn that the ruling mafia seems to be desperate to provide some means to ease the deep cataclysm they created. Just check and translate this official link. 

On the other hand, some interesting initiatives have appeared, in order to provide supplies, ranging from basic staples up to personal hygiene products, chocolates, and candy.

Honestly, I don’t have the means to investigate who the owners of these sites are, but they seem to be legit. Related to the 350 billion stolen in these 20 years, the amount of money they can launder via these payment methods seems to be small change, and their fees are among the international expected prices, therefore it´s unlikely they have some mafia-related people behind.

What it is more interesting is the entire native origin of the initiatives: this is a real homage to our creativity and legendary inventive Venezuelans have shown. One of these are just for our local “ebay” equivalent, but as people learns to have trust in the system, they will use it more and more. 

Many payment systems exist and are used regularly.

I am NOT related to any of these following payment systems in any way nor will receive any money from them. (But I should! I´m going to be so famous after my first book that everyone will be reading my past work. Just kidding! But not so much. If they want to send something every now and then I´ll be happy to receive it. Seriously. I´m so broke that can hardly pay attention), (an online shop selling basic goodies that I intend to use once I go back…and they even deliver to my own small hometown…awesome!!), Stripe, Paypal of course, Zelle, and some of the bigger platforms are generally accepted in most of the good-sized shops in the major cities (not in the open, but they do).

Local platforms like MercadoPago and Neopago, Instapago and Pagoflash, added to some mobile solutions from the weakened private banking still standing are seeing themselves under fast development. This is encouraging. After having experienced the (rather extreme) anguish of having money (at hand, in my bank and in a prepaid card overseas) for buying food, our pantry stripped naked with just over 10 kilograms of supplies between sugar, corn, and wheat flour and pasta, a few vegetable oil bottles, 4 kg worth of grain, maybe 6 kilos worth of protein distributed in pork, beef and poultry in the fridge, and a few cans…and no food in the stores.

Our beef/pork/poultry provider warned us he would be out of business for some time. After I left, he effectively went broke and closed. A few months ago I learned he came back, but with a change in his business model, selling just to customers under request, and not the general public. I suppose he´s not opening, but instead sending the packages already prepared with a messenger. I promise an interview with him. He´s a good fellow, a working-class man who made a business out of nothing and suffered a lot with this crisis, just like us. 

This has many reasons to be this way: the mafia is FORCING business to accept that useless “petro” altcoin. They want to IMPOSE it by force. At gunpoint. It´s useless because it´s not accepted by the National Assembly, our only democratic institution remaining. (Forget about the Supreme Court orders: its “president” was in prison by manslaughter in the 90s, and was imposed there to create fear and terror)

Evidence? Sure. 

I have provided some links that will show you what I mean.

As I mentioned earlier, the “petro” design is just a way to get around sanctions.

I apologize for not translating this, but I prefer you to use your favorite translators, and see for yourself. Because when you read stuff like this (3 days in a row to buy with the “petro”) then anyone will comment I am not telling the truth. Please follow and translate this link with your software of choice.

(This is the link to the written transcription) 

Something that many Venezuelans don’t know about this fake “crypto” is, that Coinbase specialists consider a real joke according to this BBC article.

This last year was definitely decisive. This ruling mafia is not going to be much longer. I am sure about that now, as sure as I was we had to leave to avoid the worst part of the collapse, as it happened, indeed. 

(Note: I will be forever thankful to those who collaborated to buy the tickets for my family to leave on time. Thanks again, from my heart, and God bless your soul)

Things have been slowly going in a different direction. They had to open the borders to allow imported goods…with a meaty black market business in the middle. Having learned how mafias operate…I doubt the guys who made money with this will enjoy their lifestyle for too long. They´ve harmed so many people in the process that it’s very likely they are in someone´s list, in someplace. Their own kind will terminate them. LOL. As the old Arab adage says “Just have a sit on your front door, and you will see pass your enemies´ remains”.  

Of course, these already described are not the only methods. People will exchange everything, often with a benefit for both parts that using a formal currency wouldn’t be possible. I´ve known of one dozen eggs being exchanged for half a gasoline tank, and a couple of new tires for a brand new alternator. I have some stuff that my former boss would be more than happy to trade for his solar panel and 12V inverter, and that would benefit both of us. 

This is a surface essay that will be much more completed with better references once we can come back.  

Thanks for your reading, be patient, as I in the next few weeks will be uploading some videos in my channel, and please stay tuned for more information. 


About the Author: Jose Martinez is a former worker of the oil state company with a Bachelor’s degree from one of the best national Universities. Jose is a prepper and shares his eyewitness accounts and survival stories from the collapse of his beloved Venezuela. Follow Jose on YouTube and gain access to his exclusive content on Patreon

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