You know what one sign is that your socialist economy is doing very, very poorly? When people are using your national currency as a building material.
The stark reality of that was illustrated recently when a CBS News reporter discovered a 13-year-old boy making a purse out of Venezuelan paper bills.
“What did you make this out of?” asked journalist Adriana Diaz in both Spanish and English for the benefit of her viewers.
“From bills, from money,” the boy responded in Spanish while holding the beautifully crafted purse.
“Can you show me how to make it?” Diaz asked next, leading the boy to demonstrate his meticulous folding technique with a $100 Venezuelan Bolivar.
The boy wasn’t planning to sell his creation, but other Venezuelan artists have been found recently using paper bills to create things to sell.
“The bill itself isn't worth anything anymore. It doesn't have any value. People will throw it away, they'll tear it up,” said Venezuelan Jorge Cordero through a translator, according to NPR. “And that's why I started using the bills to make bags and other things.”
Asked by NPR host Ari Shapiro how much he’d try to sell the bag for, Cordero replied, "$10, $15. But you're not paying for the cash. You're paying for the work.”
Asked how it feels to be using money as a building material now, the man replied, “I never imagined working with money. I used to make these things out of magazines or candy wrappers. Back in the day, this stack of cash would be a ton of money. You could buy food, give some extra to your girlfriend. Now it's worthless.”
Shapiro spoke with Northwestern University’s Daniel Lansberg-Rodriguez about what caused Venezuelan money to become so worthless so quickly.
Lansberg-Rodriguez explained that the Venezuelan economy had been built up almost entirely on oil — a foolhardy movie since the price of oil fluctuates so much. The system continued under socialist President Hugo Chavez, who had a stranglehold on the economy.
Then President Nicolas Maduro took control. When the price of oil dropped, the socialist government already had very little money left and decided to start printing more — as quickly as possible.
That led to hyperinflation, which led to an economic domino-effect of decline. For instance, citizens stopped saving and investing their money because of their — justified — fear that its value would drop drastically before they could spend it.
Lansberg-Rodriguez concluded: “And with this government, which has very little credibility, you know, towards any semblance of fiscal or economic reform, the chances that anything could realistically change while Maduro is in charge are essentially nil.”