Markets

The Troubling Trajectory of Hyperinflation in Venezuela

Published

7 years ago

June 29, 2016

Jeff Desjardins

Presented by:

The Troubling Trajectory of Hyperinflation in Venezuela

The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

Extreme shortages of food and power continue to ravage the country of Venezuela, and ordinary people have been paying the price.

With triple-digit inflation, that “price” is expected to continue to soar even higher. The International Monetary Fund (IMF), in its most recent set April forecasts, expects inflation in Venezuela to hit 481% by the end of 2016.
Even scarier is the estimated pace of acceleration – by 2017, the IMF expects Venezuelan hyperinflation to climb to a whopping 1,642%.

Our brains have trouble computing numbers of this magnitude, so we created today’s infographic to put things in perspective. We look at it from two angles, including a historical comparison as well as a more tangible example.

This Pattern Looks Familiar…

If the chart for the Venezuelan bolivar looks eerily familiar, it may be because its trajectory thus far is almost identical to that of the Papiermark during hyperinflation in the Weimar Republic from 1918-1923.

Although the Papiermark would eventually peak at an inflation rate of 3.5 billion percent in 1923, the pace of inflation started relatively modestly. It started in the double-digits after the war in 1918.

This is similar to today’s bolivar. In 2013 and 2014, the pace of inflation in Venezuela was increasing, but still confined to double-digits. Now things are accelerating fast, and if the IMF is correct with its predictions, there could be huge consequences.

Could hyperinflation in Venezuela ever hit the peak levels associated with Weimar Germany? It’s hard to say, but it’s not impossible.

A More Tangible Example

To put things from a more tangible perspective, let’s do the math based on IMF projections to see what may be in store for ordinary Venezuelans.

In 2012, one U.S. dollar could buy approximately four bolivars.
At the end of 2015, one U.S. dollar could buy 900 bolivars at the black market rate.
Based on IMF projected inflation rates, by the end of 2017, one U.S. dollar should be able to buy 90,000 bolivars.

Where things go after that is anybody’s guess.

About the Money Project

The Money Project aims to use intuitive visualizations to explore ideas around the very concept of money itself. Founded in 2015 by Visual Capitalist and Texas Precious Metals, the Money Project will look at the evolving nature of money, and will try to answer the difficult questions that prevent us from truly understanding the role that money plays in finance, investments, and accumulating wealth.

Related Topics:venezuela hyperinflation germany weimar

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Mining

Ranked: The World’s Top Diamond Mining Countries, by Carats and Value

Who are the leaders in rough diamond production and how much is their diamond output worth?

Creator Program

Published

3 days ago

September 29, 2023

Pallavi Rao

A cropped chart showing the leaders in rough diamond mining and how much their diamond output is worth.

Ranked: World Diamond Mining By Country, Carat, and Value

Only 22 countries in the world engage in rough diamond production—also known as uncut, raw or natural diamonds—mining for them from deposits within their territories.

This chart, by Sam Parker illustrates the leaders in rough diamond production by weight and value. It uses data from Kimberly Process (an international certification organization) along with estimates by Dr. Ashok Damarupurshad, a precious metals and diamond specialist in South Africa.

Rough Diamond Production, By Weight

Russia takes the top spot as the world’s largest rough diamond producer, mining close to 42 million carats in 2022, well ahead of its peers.

ℹ️ Carat is the unit of measurement for the physical weight of diamonds. One carat equals 0.200 grams, which means it takes over 2,265 carats to equal 1 pound.

Russia’s large lead over second-place Botswana (24.8 million carats) and third-ranked Canada (16.2 million carats) indicates that the country’s diamond production is circumventing sanctions due to the difficulties in tracing a diamond’s origin.

Here’s a quick breakdown of rough diamond production in the world.

Rank	Country	Rough Diamond Production (Carats)
1	🇷🇺 Russia	41,923,910
2	🇧🇼 Botswana	24,752,967
3	🇨🇦 Canada	16,249,218
4	🇨🇩 DRC	9,908,998
5	🇿🇦 South Africa	9,660,233
6	🇦🇴 Angola	8,763,309
7	🇿🇼 Zimbabwe	4,461,450
8	🇳🇦 Namibia	2,054,227
9	🇱🇸 Lesotho	727,737
10	🇸🇱 Sierra Leone	688,970
11	🇹🇿 Tanzania	375,533
12	🇧🇷 Brazil	158,420
13	🇬🇳 Guinea	128,771
14	🇨🇫 Central African Republic	118,044
15	🇬🇾 Guyana	83,382
16	🇬🇭 Ghana	82,500
17	🇱🇷 Liberia	52,165
18	🇨🇮 Cote D'Ivoire	3,904
19	🇨🇬 Republic of Congo	3,534
20	🇨🇲 Cameroon	2,431
21	🇻🇪 Venezuela	1,665
22	🇲🇱 Mali	92
	Total	120,201,460

Note: South Africa’s figures are estimated.

As with most other resources, (oil, gold, uranium), rough diamond production is distributed unequally. The top 10 rough diamond producing countries by weight account for 99.2% of all rough diamonds mined in 2022.

Diamond Mining, by Country

However, higher carat mined doesn’t necessarily mean better value for the diamond. Other factors like the cut, color, and clarity also influence a diamond’s value.

Here’s a quick breakdown of diamond production by value (USD) in 2022.

Rank	Country	Rough Diamond Value (USD)
1	🇧🇼 Botswana	$4,975M
2	🇷🇺 Russia	$3,553M
3	🇦🇴 Angola	$1,965M
4	🇨🇦 Canada	$1,877M
5	🇿🇦 South Africa	$1,538M
6	🇳🇦 Namibia	$1,234M
7	🇿🇼 Zimbabwe	$424M
8	🇱🇸 Lesotho	$314M
9	🇸🇱 Sierra Leone	$143M
10	🇹🇿 Tanzania	$110M
11	🇨🇩 DRC	$65M
12	🇧🇷 Brazil	$30M
13	🇱🇷 Liberia	$18M
14	🇨🇫 Central African Republic	$15M
15	🇬🇾 Guyana	$14M
16	🇬🇳 Guinea	$6M
17	🇬🇭 Ghana	$3M
18	🇨🇲 Cameroon	$0.25M
19	🇨🇬 Republic of Congo	$0.20M
20	🇨🇮 Cote D'Ivoire	$0.16M
21	🇻🇪 Venezuela	$0.10M
22	🇲🇱 Mali	$0.06M
	Total	$16,290M

Note: South Africa’s figures are estimated. Furthermore, numbers have been rounded and may not sum to the total.

Thus, even though Botswana only produced 59% of Russia’s diamond weight in 2022, it had a trade value of nearly $5 billion, approximately 1.5 times higher than Russia’s for the same year.

Another example is Angola, which is ranked 6th in diamond production, but 3rd in diamond value.

Both countries (as well as South Africa, Canada, and Namibia) produce gem-quality rough diamonds versus countries like Russia and the DRC whose diamonds are produced mainly for industrial use.

Which Regions Produce the Most Diamonds in 2022?

Unsurprisingly, Africa is the largest rough diamond producing region, accounting for 51% of output by weight, and 66% by value.

Rank	Region	Share of Rough Diamond Production (%)	Share of Rough Diamond Value (%)
1	Africa	51.4%	66.4%
2	Europe	34.9%	32.9%
3	North America	13.5%	52.8%
4	South America	0.2%	2.4%

However diamond mining in Africa is a relatively recent phenomenon, fewer than 200 years old. Diamonds had been discovered—and prized—as far back as 2,000 years ago in India, later on spreading west to Egyptian pharaohs and the Roman Empire.

By the start of the 20th century, diamond production on a large scale took off: first in South Africa, and decades later in other African countries. In fact between 1889–1959, Africa produced 98% of the world’s diamonds.

And in the latter half of the 20th century, the term blood diamond evolved from diamonds mined in African conflict zones used to finance insurgency or crime.