By IMF figures, Venezuela has the world’s worst negative growth rate and the worst inflation rate (482%). The unemployment rate is 17% but is expected to climb to near 30% in the coming few years.

Venezuela has been thrown into turmoil by the collapse in oil prices, Maduro government has responded to the crisis in public finances by printing money and fuelling inflation. It’s estimated that the cost of basic goods that would keep a family going through a week increased by more than 25% between March and April and now costs 22 times the state minimum salary.

At ground level, there is no hiding today's reality: people are queuing all night for food and medicine; murders and kidnappings are spiraling out of control . Black markets are rising because of goverment price controls. Physical gold and silver are both superseding the soaring price inflation tied to paper currencies. According to Tom Cloud (precious metals expert) a missionary who lives and works in Venezuela says that a single ounce of silver can buy enough food for a family to last three or four months, and an ounce of gold can buy you a house.

When inflation rates exceed 50% per month, economists call it hyperinflation. It is the ultimate repudiation by a government of its currency, an item that costs $10 today, will cost $1,290 a year from now. Hyperinflation makes all citizens poorer at a very fast pace, so why would a government ever allow inflation to reach such destructive levels? The answer is very simple: if inflation is high enough, the real cost to the government of redeeming money in terms of goods and services is nothing. A country with high levels of public debt has an incentive to create and tolerate high levels of inflation. As it becomes clear to citizens that the government is printing money to finance a deficit, people become reluctant to holding paper money, they quickly exchange it for goods that they feel will not lose value as fast as the currency does (precious metals, apartments, land, food ect.).

Politics trump economics and governments play loosely with the money supply. Venezuela is currently in the later of these two cases. A dramatic change needs to happen for markets to trust Venezuela and its currency again. The government needs to signal to the world that they will stop manipulating the money supply. Vice President for Economic Policy Miguel Perez Abad said that Venezuela will continue to use international reserves to help meet its commitments, while cutting back on imports.