Tuesday, May 24, 2016

Why Don't People Just Leave Venezuela?

I've been wondering this for a while. The place is a total wreck and everything is collapsing around them. Why don't they just hop a ship or a plane and get out? ZeroHedge has the answer.
For the average middle class person in Venezuela -- educated and still holding on to a good job -- he needs two years of wages to buy a single plane ticket in his own currency. He needs to work for two full years to buy one single plane ticket -- he's stuck there. The problem is that he waited too long to leave. That's something important that I write about often: You have to know when to leave. You needed to leave Venezuela at least three or four years ago; now you're getting to the point where you're stuck there. The official exchange rate between the USD and Bolivar is 1 to 10, but unofficially which is the real one you experience, is more like 1 to 1,000. So they basically are starving you to death through a completely devaluated currency which is what you're getting paid in.
I hadn't thought of that. You used to have money enough to buy tickets out of the country. Now you've just got worthless paper. If you've got a family and a home, if you've got roots in the place, you're much less likely to make a run for it, so you stay, hoping things will get better until it's too late and leaving is no longer an option.



IlĂ­on said...

You also have to have someplace to go.

WC Varones said...

Always a good idea to hold some gold and property overseas.

Or if you can stand the Orwellian IRS FATCA reporting, some foreign bank accounts.

K T Cat said...

I'm not a fan of gold, but keeping some of your money in a foreign bank and a foreign currency would provide a backstop.