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VENEZUELA CRISIS: Money in stricken communist state WORTHLESS due to SEVERE hyperinflation

VENEZUELA CRISIS: Money in stricken communist state WORTHLESS due to SEVERE hyperinflation

ATMs in the stricken South American nation now have a daily limit of 10,000 bolivars, which is just about enough to buy a few cups of coffee.

Marta Milano, a Venezuelan national said: "Sometimes, bank tellers will only pay you half of your pension and suggest that you come back later for the rest."

State spending in the communist state has been seen as out-of-control and other policies have simply led to hyperinflation. 

A vicious cycle has occurred where there is now not enough cash in circulation to keep up with the rapidly rising prices.

Jean Paul Leidenz, a senior economist at the Caracas think tank Ecoanalitica commenting on the worthless currency said there are about 13 billion banknotes in circulation in Venezuela. 

However, around half of these are 100-bolivar notes which equates to a fraction of one pence. 

The central bank has introduced higher-denomination bill such as the 100,000-bolivar note. These new banknotes are printed in Europe and the government lacks the money to import enough of them to meet demand. 

The government is currently dealing with falling production of oil, its main export and a huge amount of foreign debt. 

Mr Leidenz added: "Prices are doubling around every two months. So at that rate of price increases you can’t keep up with inflation even if you start importing bills."

He and others in the financial sector are calling for market reforms. 

They wish for the government to lift currency controls to help fight inflation and increase national production.

The Nicolas Maduro government have made no attempt to implement these new rules.

President Maduro places the blame on Colombia. Stating that Colombian President Juan Manuel Santos is working with private banks.

He believes smugglers are carrying cash across to Colombia, as part of a conspiracy to bring down his economy and government.

President Maduro recently said in a speech: "Juan Manuel Santos of Colombia along with the (border) mafias are leading this attack against Venezuela. They are stealing 50- and 100-bolívar banknotes to take them out of the country." 

Maduro is attempting to turn this problem in to an opportunity for Venezuela by turning 95 per cent of all payments in to electronic transactions by next year. 

However, this may prove difficult as only 40 per cent of Venezuelans have bank accounts.

The bolivar is named after Simon Bolivar the 19th Century hero who is worshipped across South America as the man who fought the Spanish for independence.