Venezuelans Buy Cars, Blackberries As An Inflation Hedge

Gold Mercedes Car

Inflation is so bad in Venezuela that two of the most rapidly depreciating products you can imagine, cars and tech, are being purchased as inflation hedges. Insane.

Bloomberg: Some Venezuelans, boxed in by currency controls, inflation and low interest rates, are spending more on consumer goods rather than put depreciating bolivars in the bank. Cars in particular are a hedge against 29 per cent annual inflation. Secondhand models often fetch higher prices.

“There’s irrational consumption in Venezuela because of inflation,” said Asdrubal Oliveros, a director at economic consulting firm Ecoanalitica in Caracas. “It’s great to borrow but horrible to save. Venezuelans also have a very high brand awareness and the BlackBerry has become a symbol of status and fashion.”

Read more here.

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