Yeah, that solution will drag Venezuela out of the crap. Not.

Nicolas Maduro has gone utterly bat-shit crazy, his latest attempt to drive Venezuela into the ground by pegging their currency to a crypto-currency: Quote:

Chaos and confusion erupted across Venezuela, and most stores were shuttered on Saturday, after president Nicolas Maduro announced that the government would enact a massive currency devaluation, implement a new minimum wage, hike taxes, and also raise gasoline prices for most citizens even as the country struggles with the greatest hyperinflation on record,?surpassing even that of the Weimar Republic.

As a result of the enacted actions, the new version of the bolivar will be pegged to the value of the state cryptocurrency, the petro, which according to Bloomberg?amounts to a 95% devaluation?of the official rate, and will trade in line with where the black market was; the government will also raise the minimum wage more than 3,000 percent,? which works out to about $30 a month.

Maduro said the new currency, set to enter circulation on Monday, will be called the “sovereign bolivar” and will be based on the petro, which is valued at $60 or 3,600 sovereign bolivars, after the redenomination planned for August 20 slashes five zeroes off the national currency. The minimum wage will be set at half that, 1,800 sovereign bolivars.? The government would cover the minimum wage increase at small and medium-size companies for 90 days, Maduro added. It was not clear what happens after.?End quote.

What happens after is economic collapse, revolution and mass deaths. It is only a matter of time.?Quote:

“They’ve dollarized our prices. I am petrolizing salaries and petrolizing prices,” Maduro?explained?in a Friday televised address.?“We are going to convert the petro into the reference that pegs the entire economy’s movements.”

In other words, for the first time ever, an oil-linked cryptocurrency effectively replaces the sovereign currency. As a result the petro, which will fluctuate dramatically, will be used to set prices for goods. The package of measures combine the necessary with the baffling, Luis Vicente Leon, president of the Caracas-based pollster Datanalisis, said in a Twitter post on Friday.

?The government has recognized the need to anchor the economy to an external variable outside of its control, such as the international price of oil. A wise decision, but it does so by hiding it in a vehicle that suffers from lack of confidence and viability, such as the Petro,? Leon said.

“You won?t find the IMF?s claws or ill-gotten prescriptions here,? Maduro said, although after years of socialist torment, it is not clear if Venezuela’s ordinary citizens would not have opted for that alternative. Maduro also said that “no experts were involved who do not feel the clamor of the people”… Just dictators.

Maduro also said he intends to create a unified exchange rate across the country. The new petro-to-dollar-to-bolivar rate would bring the official price of one US dollar to six million (or 60 post-redenomination), which is about the same as the current black market exchange rate and about 25 times worse than the official rate.

To implement the bizarre plan, information Minister Jorge Rodriguez said Saturday the government will open 300 currency exchange kiosks in hotels, airports and shopping malls as part of a bid to supersede the country?s black market. Maduro said Friday that the central bank will increase the frequency of weekly foreign exchange auctions to three and eventually five.

Speaking to Bloomberg, Henkel Garcia, director of the Caracas consultancy Econometrica, said the announcements amounted to a head-scratcher. ?This series of measures is a mix of incoherent and contradictory ideas.?It is a worrying contraption that generates a lot of uncertainty about how it will be executed.??End quote.

Ain’t socialism grand.?Quote:

Besides the token minimum wage hike, Maduro also raised the value-added tax on luxury items to 16% from 12%, and said a tax on financial transactions would range from zero to 2%.

Venezuela’s economy remains in shambles, with record-beating hyperinflation crushing any purchasing power the locals may have and thousands of people fleeing poverty to nearby countries. Over the past year, the US has imposed increasingly restrictive sanctions on Venezuela?s finances and debt issuance, aiming to drive ‘dictator’ Maduro out of power. However, the US remains Venezuela’s top oil importer and Washington has been reluctant to apply any direct penalties to the country’s oil industry.

Maduro?s actions come as unrest grows over the collapse of the economy, including a foiled coup attempt and a drone attack on Maduro. In May, scores of highly-decorated servicemen and women unsuccessfully conspired to launch a palace coup and put the socialist president on trial. Earlier this month, Maduro survived what the government claimed was a drone attack as explosive-laden devices were detonated during a military parade.

Meanwhile,?Venezuela is now in default on??more than $6 billion of its bonds after the government missed a principal payment on one of its bonds for the first time this week. The missed payment, while hardly a surprise for investors, confirmed that creditors creditors are unlikely to get much, if any, of their money as the overdue payments pile up with no resolution in sight to Venezuela’s collapsing economy, cryptocurrency-pegged bolivar notwithstanding. End quote.

It is going to end in more than tears an take a generation to recover from the assault socialism has taken on Venezuela.