Venezuela coin scam update

Hannah Dreier, the wonderful AP correspondent in Caracas, reports that coins have disappeared there. And yet the Venezuelan mint says it continues to produce them (Excel sheet).

Here are the number of pieces in circulation over the past couple years:

Venezuela Central Bank pieces in circulation

Thanks to the miracles of Excel, I was able to use that table to calculate a minimum number of how many pieces have been minted in the past two years, past year, and past month. (Note that this is net of any coins intentionally taken out of service, but that number is probably very small.)

Coins:

change 0.01 0.05 0.10 0.125 0.25 0.50 1
April13-April15 2,651,534 729,845 38,756,047 2,031,396 104,434,773 215,540,440 256,012,268
April14-April15 372,171 252,266 9,642,052 827,783 70,682,828 86,379,074 145,431,257
March15-April15 10,503 6,078 361,085 22,032 2,757,111 471,734 8,346,286

Bills:

2 5 10 20 50 100
142,343,456 381,895,292 200,112,816 357,261,457 454,259,700 1,071,587,881
32,524,953 186,575,559 21,878,334 186,130,523 195,628,489 723,924,363
17,181,440 6,835,634 -11,949,103 5,067,159 26,675,079 46,071,589

Hannah then asks, again on Twitter, where they all went. My guess, as I mentioned a couple years ago, is that they get sold for scrap metal, most likely before ever leaving the mint.

(Getting the convo started was Tim Worstall, who wrote a nice enough column in Forbes about “reverse seigniorage” but who bizarrely “predicted” that Venezuela would soon face a coin shortage, a prediction that apparently has long since come to pass. Ah, good old Forbes.)

But it occurs to me that the best scam of all would be for someone to buy the coins at face value and then sell them back — to the mint! That way the people at the mint could keep releasing coins into circulation without using the country’s valuable electricity supplies, or cutting into people’s valuable lunch hours. Wouldn’t that be great? Easy money in every sense of the word. Who would notice?

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6 thoughts on “Venezuela coin scam update

  1. JB Lenoir

    Have you considered that perhaps the official coin mintage figures are fabricated…that perhaps coins disappeared simply because the BCV stopped minting coins?

  2. Francisco Toro

    wrote a nice enough column in Forbes about “reverse seigniorage” but who bizarrely “predicted” that Venezuela would soon face a coin shortage, a prediction that apparently has long since come to pass.

    Reverse predictionage?!

  3. notiven

    Regarding coin usage, something strange happened to me this week .

    I had to pay Bs. 9.oo for parking gave out a Bs 10 bill expecting one Bolivar back.

    The lady asked if I had a one Bolivar coin so she could give me back a Two Bolivar bill.

    Javier

  4. pitiyanqui

    Every time we have gone to Venezuela, typically for three weeks to a month per, we generally would toss the change into one of the bags at the end of each day. I recall, shortly after the bolivar fuerte’s advent, we ended up bringing home something like 300 bolivars (200+ in coinage) in 2008 and I was rather grumpy because that was about $100 at the parallel rate of 3.1 at the time.

    Go forward several years, and we probably have a couple kilograms of coins (adding less each time we come back) and three thousand in bills, aggregated over that time until our last trip. We brought home over 5000 (at around 70 per), almost exclusively in 100 BsF notes. Not a single coin was in the bunch.

    Takeaways:
    1. Power of devaluation/depreciation.
    2. It seems the casa de moneda is extremely interested in proving Milton Friedman correct.
    3. Clearly, the lack of coins is a long-term imperialist/neo-colonialist plot caused by the millions upon millions of yanqui tourists who are obviously funded by the government in an attempt to destabilize the country and create a “sensación de inflación”.

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