To paraphrase noted economic expert Obi-Wan Kenobi, many of the truths we cling to about currencies really do depend greatly on our own point-of-view.
Take Venezuela. The good news is that, if you look at it over a long enough timeline, its currency hasn’t changed much the past month. The bad news, though, is that’s because it’s gone from being almost worthless to almost entirely worthless. And the worse news is that it’s actually lost over a third of its value during this stretch.
Now, there’s never been a country that should have been so rich been so poor as Venezuela. Indeed, it has the world’s largest oil reserves, but has still managed to have the world’s worst-performing economy. The International Monetary Fund estimates that its gross domestic product will end up shrinking 10 percent this year, and its inflation rate will reach 720 percent. Nor is this expected to get any better any time soon. Inflation is supposed to get up to 2,200 percent next year, and 3,000 percent the one after that.
