Strength and Sovereignty
VEN91, 2007-2016 (2014), 20 VEF

Slot Comment:

Bolivares Fuertes (Strong Bolivar)

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Note Details

  

Set Details
Note Description: 20 Bolívares 2014 - Printer: CMV
Grade: 66 EPQ
Country: Venezuela
Note Number: VEN91g
Signatures/
Vignettes: 		- Wmk: L. Arismendi & 20
Certification #: 8046364-053
Owner: Revenant
Set Category: World
Set Name: Strength and Sovereignty
Slot Name: VEN91, 2007-2016 (2014), 20 VEF
Research: Currently not available

Owner's Description

At the time it was announced and placed into circulation, at least officially, this note was worth about US$9.30.



The government of Hugo Chavez announced on 7 Mar 2007 that the Bolivar Fuerte (ISO Code VEF) would replace the Bolivar (ISO Code VEB) at an exchange rate of 1000 VEB to 1 VEF, “to facilitate the ease of transaction and accounting.” The new currency code was needed in part because the old currency would still be circulating for a while. At the time of its demise, the Bolivar had been the currency of Venezuela for about 130 years, nearly its entire history as an independent state.



“Bolivar Fuerte” literally translates to “Strong Bolivar” in English. This would seem to be insanely ironic given that this currency change had to happen because the Bolivar was anything but strong and because in the US you hear people refer to “Strong Dollar” policies, meaning policies that are meant to protect or raise the value of the dollar relative to other currencies. However, the name is a reference to an old coin that was called a “Peso Fuerte,” that was worth 10 Spanish Reales.



Unlike in Zimbabwe, this first redenomination happened before the country went into hyperinflation. The Bolivar Fuerte entered the world stage with inflation at 13.70% in 2006, 18.70% in 2007 and 31.4% in 2008. Inflation averaged about 25% from 2009 to 2012, and only then started to march higher with 43.5% in 2013, 57.3% in 2014, and 111.8% in 2015. It hit 254.4% in 2016. That double-digit inflation from 2006 to 2012 was high but it wasn’t hyperinflation and it wasn’t really accelerating. The inflation starting to spike up more coincided with the death of Chavez - in March 2013 - and not the great financial crisis of 2008 or the collapse of the price of oil in 2014. I am not sure if his death caused a loss of confidence or if it just added uncertainty amidst already bad time. Venezuela devalued its currency in February 2013 - before he died - due to rising shortages of basic needs items, which included milk, and flour. This led to an increase in malnutrition, especially among children. 2013 was also the year that Venezuela officially entered a recession and the national economy started to shrink - a recession that still had not ended as of Oct 2020. A 7-year recession! When oil prices started to drop in mid-2014, President Maduro, who replaced Chavez, compensated by printing money, and that started the country down the road to hyperinflation in earnest.



There is maybe a “chicken and egg” question to be had here - you have to wonder, what caused what? Did Chavez’s death cause the loss of confidence in the government and currency? Declining oil exports? Was the loss of confidence and inflation caused by public dissatisfaction with the government?



Through most of its life the Bolivar Fuerte was officially pegged to the US dollar, but the value on the black market or parallel market was pretty much always lower than the official rate and the official rate changed several times as the government repeatedly devalued it. When the Bolivar Fuerte launched on 1 January 2008 the exchange rate was 2.15 BsF to 1 USD. Two years later, on 8 January 2010 it was devalued to 2.6-4.3 BsF to 1 USD, depending on what you were buying. On 1 January 2011, it became 4.3 BsF to 1 USD for everything. On 13 February 2013 it became 6.3 BsF to 1 USD – the parallel exchange rate, which is illegal to publish in Venezuela, was 20 VEF:1 USD at this time. On 18 February 2016, new President Maduro made it 10 BsF per 1 USD – the parallel rate was 1000 VEF to 1 USD at that time according to “DolarToday.”



This was attributed to general, public dissatisfaction with "the absence of internal debate on its content, as well as dissatisfaction with the running of the social programs, increasing street crime, and with corruption within the government" - but 44% did not vote.



To ensure that his “Bolivarian Revolution” became socially ingrained in Venezuela, Chávez sought to run for re-election when his term ran out in 2013 and spoke of ruling beyond 2030. Under the 1999 constitution, he could not legally stand for re-election again, and so brought about a referendum on 15 February 2009 to abolish the two-term limit for all public offices, including the presidency. Approximately 70% of the Venezuelan electorate voted, and they approved this alteration to the constitution with over 54% in favor, allowing any elected official the chance to try to run indefinitely - showing he still had a lot of support at this point, but this was before the price of oil and the economy really tanked.



The Bolivares Fuertes notes were mostly issued in two 6-note series that can basically be thought of as a "Series 1" and "Series 2". The "Series 2" notes use the same designs, in the same order of ascending denominations, but with different color schemes and face values. The “Series 1” notes released in 2007 alongside a new group of 7 coins, which included a 1 Bolivar coin. This is the reason the lowest note in this series is the 2 Bolivar note. The government had intended that the "Series 1" notes - which were basically worthless by the time "Series 2" came out (in 2016) - would be withdrawn from circulation. So, these two groups of notes were not meant to circulate together and so there was less perceived risk with people getting the notes confused with each other. The “Series 2” notes came out with new 10 Boilvar, 50 Bolivar, and 100 Bolivar coins that were supposed to replace VEN90, VEN92, and VEN93 with coins. As a result, VEN91 and VEN97 look essentially the same.



The front of this note shows Luisa Cáceres de Arismendi. The back of the note shows Hawksbill turtle (Eretmochelys imbricata) with Macanao Mountain in the background. For more information on the design of this note and the significance of the people and things in it, look at my description for VEN97. For more information on the design of this note and the significance on the things in it, look at my description for VEN97.



In case anyone ever wonders, the words “pagaderos al portador en las oficinas del banco” under the denomination translate to “payable to the bearer at the bank’s offices.”

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