How Bitcoin is saving lives in Venezuela
By Justin Spittler
To some folks, bitcoin is a speculation. To others, it’s a fad.
But to the people of Zimbabwe, it’s a lifeline.
That’s because Zimbabwe’s economy is a basket case. It’s been this way for years.
A decade ago, the central bank of Zimbabwe tried to solve its economic problems by printing money…with predictable results.
In 2007, the inflation rate in Zimbabwe was running at 24,411% per year.
By 2008, the situation was so bad that the government stopped tracking inflation.
But experts say the annual inflation rate hit 231 million percent in July 2008. By November 2008, inflation hit 79.6 billion percent.
• That’s when the government finally admitted that its currency was worthless…
It abandoned its own currency and started to use the U.S. dollar and the South African rand instead.
But this hasn’t fixed the country’s problems—not by a long shot.
Inflation in Zimbabwe is still sky-high. Unemployment is at 90%. About 74% of the population lives on less than $5.50 per day.
It’s a complete disaster.
• So, the people of Zimbabwe are turning to bitcoin…
And they’re paying a steep premium for it.
According to Bloomberg, one bitcoin in Zimbabwe will now set you back $13,000. That’s almost double the international price.
It seems hard to believe.
But you’ve got to understand something. Cash is still hard to come by in Zimbabwe. Some banks can’t even give their depositors $20 per day.
Plus, many people in Zimbabwe don’t have bank accounts. But a growing number own smartphones. And that’s all you need to buy bitcoin.
But this isn’t just happening in Zimbabwe.
• People in Venezuela are loading up on bitcoin, too…
That’s because their economy is also in shambles.
Unemployment is through the roof. Food shortages are common. And the annual inflation rate is in the triple digits…and rising.
In fact, the International Monetary Fund (IMF) estimates that inflation could top 2,800% next year.
The people of Venezuela are becoming increasingly desperate. And many are buying bitcoin to survive.
That’s because bitcoin doesn’t lose value by the day like the bolivar, Venezuela’s currency. Instead, it becomes more valuable.
Some Venezuelans are even using their bitcoin to buy essential items for survival such as medicine and food.
• Others are also “mining” bitcoin…
Mining is how new bitcoins are created.
But you obviously can’t mine bitcoin like you would copper or gold. It’s a digital currency.
Instead, people mine new bitcoins by using computers to solve complex math problems. People who successfully mine bitcoins earn money.
Now, mining bitcoin is normally expensive. That’s because it requires a lot of energy.
But energy is basically free in Venezuela. That’s why an estimated 100,000 Venezuelans are now mining it. Their costs are next to nothing.
According to Bloomberg, some people are now earning $500 per month doing this. That’s a small fortune in Venezuela these days.
• Doug Casey predicted this would happen…
Here’s what Doug told me over the phone back in September:
In all of Africa, most of South America, and a great part of Asia, fiat currencies issued by governments are a joke. They’re extremely unreliable within those countries. And they’re totally worthless outside the physical borders of the country. That’s why those people want dollars.
I think that the Third World will adopt Bitcoin and some other coins in a huge way.
This is because people who own cryptocurrencies, at least for the time being, are making money. They’re saving an appreciating asset rather than a depreciating asset. You’re on a Sisyphean treadmill if you try to save a Third World currency—but ¾ of humanity have no alternative.
In other words, Zimbabwe and Venezuela are just a taste of what’s to come.
Think about it. Right now, central banks across the world are recklessly printing money.
Every paper currency in the world is now rapidly approaching its intrinsic value of zero. It’s a giant race to the bottom.
Until recently, there was very little that people in places like Zimbabwe could do to protect themselves. Gold was really their only option.
But it’s not always easy for people in the Third World to get their hands on gold, especially when ruthless dictators are in charge.
• Bitcoin is a much better option for these people…
That’s why Doug thinks the Third World will be a major buyer of bitcoin in the coming years.
Most people haven’t considered this. They think the only people buying bitcoin are millennials in search of quick profits.
But, as you’ve seen today, many people are buying it out of necessity. And that’s not going to change anytime soon…
• So, consider buying bitcoin if you haven’t already…
Just remember to treat it like a speculation.
Have an exit strategy. Take profits when you get them. And most importantly, don’t bet more money than you can afford to lose.
If Doug’s right, you won’t need to own a lot of bitcoin to make an absolute fortune.