Reprinted from PeterCEarle.com
â€¦in the knife fight known as the global currency war is Venezuela, which just an hour agoÂ announced that it would devalue its Bolivar Fuerte (looking ratherÂ dÃ©bilÂ today) to 6.30/dollar from 4.30/dollar. In one move, consumer purchasing power has essentially been cut in half.
Things are not going well in Chavezâ€™ interpretation of a â€œworkerâ€™s paradiseâ€, with monthly inflation notching in at just over 3% in January 2013 and surpassing 22% on an annual basis.
The first devaluation in any currency war is a big step, indicating a willingness to vault clean over the comparatively somnolent monetary policies associated with quantitative easing into the realm of unannounced overnight amputations of chunks of individual savings and wealth.Â But to those Venezuelans â€“ however few there might be -Â who saw the proverbial writing on the wall (or never quite bought into the idea that any government can be all things to all people) and consequently put their Bolivar into gold, silver, or Bitcoin: congratulations on your one day, 46% return.