Venezuela Launches First Nuke In Currency Wars, Devalues Currency By 46%; Venezuelan Devaluation Sparks Panic

From Zero Hedge:

While the rest of the developed world is scrambling here and there, politely prodding its central bankers to destroy their relative currencies, all the while naming said devaluation assorted names, "quantitative easing" being the most popular, here comes Venezuela and shows the banana republics of the developed world what lobbing a nuclear bomb into a currency war knife fight looks like:

• VENEZUELA DEVALUES FROM 4.30 TO 6.30 BOLIVARS
• VENEZUELA NEW CURRENCY BODY TO MANAGE DOLLAR INFLOWS
• CARACAS CONSUMER PRICES ROSE 3.3% IN JAN.

And that, ladies and gents of Caracas, is how you just lost 46% of your purchasing power, unless of course your fiat was in gold and silver, which just jumped by about 46%. And, in case there is confusion, this is in process, and coming soon to every "developed world" banana republic near you.

http://www.zerohedge.com/news/2013-02-08/venezuela-devalues-its-currency-32

From The Financial Times:

Panic buyers thronged Venezuelan shops over the carnival weekend after the government of Hugo Chávez announced a surprise devaluation that analysts said was overdue but would only partly right the listing economy.

But while the government gains, most Venezuelans lose out, with Ecoanalitica estimating an 8 per cent fall in consumers’ purchasing power. Until the government next decrees an increase in minimum wages, the relative value of workers’ salaries will fall.

“Those most affected, apart from consumers, are the multinational companies that couldn’t repatriate capital, and they will end up losing from one day to the next 46.5 per cent of their funds accumulated in bolívars,” said Mr Oliveros.

Shares in companies with Venezuelan operations, including Colgate-Palmolive and Avon, fell on the announcement.

Mr Oliveros added that the devaluation was also likely to spur inflation, which at more than 20 per cent is one of the highest in the world, since more than a third of the goods consumed by Venezuelans are imported, while around half of locally produced goods rely on imports for their production.

http://www.ft.com/intl/cms/s/0/12e9f32e-739e-11e2-9e92-00144feabdc0.html#axzz2KXzI60UD