Julio César Alonso
August 18, 2018
There are no official figures for inflation in Venezuela, but the International Monetary Fund (IMF) expects the rate to reach around 1,000,000% by the end of 2018. Whether or not that is precise to the decimal point, clearly Venezuela is suffering from hyperinflation.
Inflation is the phenomenon of rising prices for all goods and services, which is normal. In Colombia for example, the inflation rate for 2017 was 4.09%. But hyperinflation is when price rises exceed a minimum of 50% in a month and it lasts for a period of at least one year.
Some analysts estimate conservatively that daily inflation in Venezuela is 2.8%, which means roughly a 200% increase in prices monthly. Hyperinflation means banknotes and coins lose their purchasing power fast. For example, with a daily 2.8% inflation rate and supposing it will not rise further, if you were given a 100,000-bolivar note, within 30 days, you could buy only half of what you could purchase today. After 60 days, that would drop to 25% of what you could buy today, and after 100 days, the note would have 10% of its present purchasing power. In 365 days, the 100,000-bolivar note would have about 0.02% of today's purchasing power — in other words practically none. In layman's terms, a crazy situation.
Protests against President Maduro in Valencia, Venezuela, on July 27. — Photo: Juan Carlos Hernandez/ZUMA.
How did the country get here? There is no single reason, but clearly there are two important causes. One is the dearth of goods and services that pushes up prices. The second is the Central Bank's utter dependence on the government. This has meant an exaggerated emission of banknotes to finance public spending (including subsidies). This acted as a stimulus to inflation, which then accelerated to historic levels. Now with its own momentum, it is going so fast you cannot print banknotes fast enough to stay apace with it. There is already a shortage of banknotes to pay for the few goods you might find on supermarket shelves.
The logistics of distributing the bills are complicated.
In recent days, the government of President Nicolás Maduro announced new measures to curb hyperinflation. On August 20, five zeros will be eliminated from all current prices and existing banknotes will be removed from circulation to make way for a new currency, the "sovereign bolivar" (bolívar soberano). This is like trying to stop a train with a cardboard wall. It is impossible to adapt an economy to such a change within a month. The logistics of distributing the bills (supposing they have already been printed) across the land are complicated. In Colombia, for example, we have often discussed removing three zeros from the peso and all projects have proposed transition periods of between one and five years. This type of change in so short a period is unthinkable, especially in an economy that does not function efficiently.
One of the most serious problems remains unresolved in any case, namely the Central Bank's independence (as the body emitting banknotes) from the government (which spends them). There is no assurance the Bank will not start pumping up emissions of sovereign bolivars to finance public spending, which would perpetuate hyperinflation.
Certain other countries have turned to using the U.S. dollar as an anchor to curb inflationary processes. An example is Ecuador (which had an inflation rate of 96% in 2000). Using dollars would at least dry up this source of inflation while the government tackles the other front, namely reactivating the productive apparatus to boost the supply of goods and services. But that too is unthinkable in present-day Venezuela, for obvious reasons. Regrettably, hyperinflation won't disappear any time soon.
America Economia is Latin America's leading business magazine, founded in 1986 by Elias Selman and Nils Strandberg. Headquartered in Santiago, Chile, it features a region-wide monthly edition and regularly updated articles online, as well as country-specific editions in Chile, Brazil, Ecuador and Mexico.
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food / travel
With Halloween arriving, we have dug up the would-be ghosts of documented evil and bloodshed from the past.
Laure Gautherin and Carl-Johan Karlsson
October 26, 2021
When Hallows Eve was first introduced as a Celtic festival some 2,000 years ago, bonfires and costumes were seen as a legitimate way to ward off ghosts and evil spirits. Today of course, with science and logic being real ghostbusters, spine-chilling tales of haunted forests, abandoned asylums and deserted graveyards have rather become a way to add some mystery and suspense to our lives.
And yet there are still spooky places around the world that have something more than legend attached to them. From Spain to Uzbekistan and Australia, these locations prove that haunting lore is sometimes rooted in very real, and often terrible events.
Shahr-e Gholghola, City of Screams - Afghanistan
The ruins of Shahr-e Gholghola, the City of Screams, in Afghanistan
According to locals, ghosts from this ancient royal citadel located in the Valley of Bamyan, 150 miles northwest of Kabul, have been screaming for 800 years. You can hear them from miles away, at twilight, when they relive their massacre.
In the spring 1221, the fortress built by Buddhist Ghorids in the 6th century became the theater of the final battle between Jalal ad-Din Mingburnu, last ruler of the Khwarezmian Empire, and the Mongol Horde led by Genghis Khan. It is said that Khan's beloved grandson, Mutakhan, had been killed on his mission to sack Bamyan. To avenge him, the Mongol leader went himself and ordered to kill every living creature in the city, children included.
The ruins today bear the name of Shahr-e Gholghola, meaning City of Screams or City of Sorrows. The archeological site, rich in Afghan history, is open to the public and though its remaining walls stay quiet during the day, locals say that the night brings the echoes of fear and agony. Others claim the place comes back to life eight centuries ago, and one can hear the bustle of the city and people calling each other.
Gettysburg, Civil War battlefield - U.S.
View of the battlefields from Little Round Top, Gettysburg, PA, USA
Even ghosts non-believers agree there is something eerie about Gettysbury. The city in the state of Pennsylvania is now one of the most popular destinations in the U.S. for spirits and paranormal activities sight-seeing; and many visitors report they witness exactly what they came for: sounds of drums and gunshots, spooky encounters and camera malfunctions in one specific spot… just to name a few!
The Battle of Gettysburg, for which President Abraham Lincoln wrote his best known public address, is considered a turning point in the Civil War that led to the Union's victory. It lasted three days, from July 1st to July 3rd, 1863, but it accounts for the worst casualties of the entire conflict, with 23,000 on the Union side (3,100 men killed) and 28,000 for the Confederates (including 3,900 deaths). Thousands of soldiers were buried on the battlefield in mass graves - without proper rites, legend says - before being relocated to the National Military Park Cemetery for the Unionists.
Since then, legend has it, their restless souls wander, unaware the war has ended. You can find them everywhere, on the battlefield or in the town's preserved Inns and hotels turned into field hospitals back then.
Belchite, Civil War massacre - Spain
Old Belchite, Spain
Shy lost souls wandering and briefly appearing in front of visitors, unexplainable forces attracting some to specific places of the town, recorded noises of planes, gunshots and bombs, like forever echoes of a drama which left an open wound in Spanish history…
That wound, still unhealed, is the Spanish Civil War; and at its height in 1937, Belchite village, located in the Zaragoza Province in the northeast of Spain, represented a strategic objective of the Republican forces to take over the nearby capital city of Zaragoza.
Instead of being a simple step in their operation, it became the field of an intense battle opposing the loyalist army and that of General Francisco Franco's. Between August 24 and September 6, more than 5,000 people were killed, including half of Belchite's population. The town was left in rubble. As a way to illustrate the Republicans' violence, Franco decided to leave the old town in ruins and build a new Belchite nearby. All the survivors were relocated there, but they had to wait 15 years for it to be complete.
If nothing particular happens in new Belchite, home to around 1,500 residents, the remains of old Belchite offer their share of chilling ghost stories. Some visitors say they felt a presence, someone watching them, sudden change of temperatures and strange sounds. The ruins of the old village have been used as a film set for Terry Gilliam's The Adventures of Baron Munchausen - with the crew reporting the apparition of two women dressed in period costumes - and Guillermo del Toro's Pan's Labyrinth. And in October 1986, members of the television program "Cuarta Dimensión" (the 4th dimension) spent a night in Belchite and came back with some spooky recordings of war sounds.
Gur Emir, a conquerer’s mausoleum - Uzbekistan
Gur Emir (Tomb of Timur) in Samarkand, Uzbekistan
The news echoed through the streets and bazaars of Samarkand: "The Russian expedition will open the tomb of Tamerlane the Great. It will be our curse!" It was June 1941, and a small team of Soviet researchers began excavations in the Gur-Emir mausoleum in southeastern Uzbekistan.
The aim was to prove that the remains in the tomb did in fact belong to Tamerlane — the infamous 14th-century conqueror and first ruler of the Timurid dynasty who some historians say massacred 1% of the world's population in 1360.
Still, on June 20, despite protests from local residents and Muslim clergy, Tamerlame's tomb was cracked open — marked with the inscription: "When I Rise From the Dead, The World Shall Tremble."
Only two days later, Nazi Germany invaded the Soviet Union, with the people of Samarkand linking it to the disturbing of Tamerlane's peace. Amid local protests, the excavation was immediately wrapped up and the remains of the Turkish/Mongol conqueror were sent to Moscow. The turning point in the war came with the victory in the Battle of Stalingrad — only a month after a superstitious Stalin ordered the return of Tamerlane's remains to Samarkand where the former emperor was re-buried with full honors.
Gamla Stan, a royal massacre - Sweden
The red house of Gamla Stan, Stockholm, Sweden
After Danish King Kristian II successfully invaded Sweden and was anointed King in November 1520, the new ruler called Swedish leaders to join for festivities at the royal palace in Stockholm. At dusk, after three days of wine, beer and spectacles, Danish soldiers carrying lanterns and torches entered the great hall and imprisoned the gathered nobles who were considered potential opponents of the Danish king. In the days that followed, 92 people were swiftly sentenced to death, and either hanged or beheaded on Stortorget, the main square in Gamla Stan (Old Town).
Until this day, the Stockholm Bloodbath is considered one of the most brutal events in Scandinavian history, and some people have reported visions of blood flowing across the cobblestoned square in early November. A little over a century later, a red house on the square was rebuilt as a monument for the executed — fitted with 92 white stones for each slain man. Legend has it that should one of the stones be removed, the ghost of the represented will rise from the dead and haunt the streets of Stockholm for all eternity.
Port Arthur, gruesome prison - Australia
Port Arthur Prison Settlement, Tasmania, Australia
During its 47-year history as a penal settlement, Port Arthur in southern Tasmania earned a reputation as one of the most notorious prisons in the British Empire. The institution — known for a brutal slavery system and punishment of the most hardened criminals sent from the motherland— claimed the lives of more than 1,000 inmates until its closure in 1877.
Since then, documented stories have spanned the paranormal gamut: poltergeist prisoners terrorizing visitors, weeping children roaming the port and tourists running into a weeping 'lady in blue' (apparently the spirit of a woman who died in childbirth). The museum even has an 'incidence form' ready for anyone wanting to report an otherworldly event.
Poveglia Island, plague victims - Italy
Poveglia Island, Italy
Located off the coast of Venice and Lido, Poveglia sadly reunites all the classical elements of a horror movie: plagues, mass burial ground and mental institute (from the 1920's).
During the bubonic plague and other subsequent pandemics, the island served as a quarantine station for the sick and anyone showing any signs of what could be Black Death contamination. Some 160,000 victims are thought to have died there and the seven acres of land became a mass burial ground so full that it is said that human ash makes up more than 50% of Poveglia's soil.
In 1922 a retirement home for the elderly — used as a clandestine mental institution— opened on the island and with it a fair amount of rumors involving torture of patients. The hospital and consequently the whole island was closed in 1968, leaving all the dead trapped off-land.
Poveglia's terrifying past earned it the nickname of 'Island of Ghosts'. Despite being strictly off-limits to visitors, the site has been attracting paranormal activity hunters looking for the apparition of lost and angry souls. The island would be so evil that some locals say that when an evil person dies, he wakes up in Poveglia, another kind of hell.
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