What to Do When Government Money Goes Bad
First, they sold their car.
Then, they downsized from a house to a small apartment.
Next, they cut meat from their diets. And now, they skip meals to ensure survival.
This is the story of Vanessa Posada and her husband Adolfo.
They live in Venezuela. And their money simply doesn’t go that far anymore.
Falling oil prices have sent the economy into free fall. Per experts, the inflation rate is 720% and rising.
And today, an estimated 93% of Venezuelans don’t have enough money to buy food.
It’s a sad story… especially considering that Vanessa did everything right.
But that’s not enough to save her from government money gone bad.
Consider that at the beginning of 2014, one Venezuelan bolivar equaled roughly 16 cents. Today, that bolivar will supposedly get you just 10 cents – a 38% decrease.
But that’s the official rate… the one no one pays attention to.
Today, one bolivar will actually get you just 0.000625 cents.
Put another way, at the beginning of 2014, you needed 6.25 bolivars to get $1. Today, using the black-market rate, you need 16,000 bolivars to get that same $1.
That means Vanessa’s bolivars are worth 99% less than just three years ago.
This story shows how governments can inflate a currency away. And it can leave those using that currency in a dire situation.
There’s a way Vanessa could have protected herself from government-driven inflation.
I’ll show you that in a moment. But first, don’t think it can’t happen to you.
Government Money: It’s Not Really Your Money
Venezuela is an extreme case. Folks tend to dismiss it. They think it can’t happen in their country.
But there’s no shortage of extraordinary situations going on in developed economies, too.
Take Switzerland, for example.
She completed her university studies. Then she got a job as a schoolteacher. And she later got married and had a child.
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