In what is an absolute lack of surprise to anyone who’s thought about the issue, the severe regulations imposed by the state of California on legal marijuana shops means the majority of marijuana sales take place in the black market.
After five years of legal recreational marijuana, sales in the illegal market are estimated to be twice the volume in legal stores.
This is the 32nd article I have written covering the legalized recreational marijuana market. You can see my other articles by clicking on the regulation experiment tag.
One way to measure how severely the legal marijuana business has been restricted is to look at the number of licensed marijuana shops per 100,000 residents. For six Western states that allow recreational sales, here is the number of legal dispensaries per 100,000 people:
Seems like most industries have a tangled supply chain. The entire transportation system is sorely distressed.
The elitists in federal and state governments have a staggering level of hubris. They think waving their hands, clicking on their laptops, issuing press releases will make the entire economy bend to their will. What they accomplish is willfully causing disruption in your life and in my life.
Here are merely a few of the recent articles describing the tangled impact of Covid dictats and sundry government policies:
Lots of cargo ships are waiting to unload off the California coast.
Large port operator expects disruptions to last into 2023.
Workers in transportation sector warn of possible system collapse.
Chip shortage for carmakers will last into late 2022.
Looks like it might take another 15 or 18 months to untangle the worldwide supply chain.
A tweet I saw this morning (10/9/21) from someone flying out of Long Beach indicated the individual counted 50 ships waiting to unload.
At around 10,000 containers per ship that is somewhere around 370,000 containers waiting to be unloaded back in the middle of August and is now currently somewhere in the range of half a million containers sitting off the coast.
Article says a few months ago it was only nine. Normally it is zero.
The supply chain in most industries is tangled up somehow somewhere.
The people in federal and state governments with the staggering level of hubris to think they can wave their hands and make the entire economy do their bidding are willfully causing disruption in your life and in my life.
Previous post showed the obverse of the bills issued in June 2019. That post also discussed the hyperinflation that made it necessary to add a couple of zeros to the bills. Unfortunately by the time the largest bill was issued it was only worth less than one US dollar.
Here are the reverses (back) of the bills issued in June 2019:
10,000 Bs. S, equal to 1,000,000,000 Bs. F., yes one billion
Mausoleo del Libertador Simon Bolivar – Mausoleum of liberator Simon Bolivar
Ongoing hyperinflation in Venezuela was so severe after the conversion to Bolivar soberano (Bs.S) in August 2018 that far higher denomination currency had to be introduced in June 2019.
To illustrate the concept, the exchange rate at the end of July 2018 was 3,600,000 Bs. F. to $1. That would be equivalent to 36 Bs. S. to $1 using the new currency.
At the end of August 2018 the exchange rate was 90 Bs.S to $1. From 36 to 90 in a month.
At the end of December 2018, the exchange rate was 730 Bs. S to $1.00. That meant that the highest denomination note in circulation, the 500 Bs.S. was worth less than one US dollar. By the way it had been worth it $8.47 at the end of August 2018, just four months earlier.
By the time the new denominations were in circulation at the end of June 2019 the exchange rate was 7,880 Bs. S to $1.
Oh, that 500 Bs. S. issued back in August 2018? It was worth $0.06 at the end of June 2019.
That one bill dropped from being worth US$8.47 in August 2018 all the way down to US$0.06 in June 2019.
The obverse (front) of the bills issued in June 2019:
10,000 Bs. S, equal to 1,000,000,000 Bs. F., yes one billion
Inflation was so severe in Venezuela during the 2017 and 2018 timeframe that currency in circulation was worthless. In 2018 the government replaced the previous currency, called the Bolivar fuerte (Bs.F) with a new currency, called the Bolivar soberano (Bs. S).
The exchange rate was 100,000 of the old Bs. F. for 1 of the new Bs. S. . Essentially that lopped five digits off currency and prices.
To illustrate the concept, the highest denominated old currency was 100,000 Bs. F. The lowest denominated new currency was 2 Bs. S., which is the equivalent to 200,000 Bs. F.
In 2019 the government issued three extremely high denomination notes. More on that in future posts.
This post and the next will illustrate the 2018 currency. As you would expect it is beautiful. Full-color, with nice portrait on the obverse, fun illustration of animals on the reverse, a metal security band, and a large watermark.
The currency is a delight to view. Each obverse and reverse is a lovely work of art. I’m being serious. The generous doses of sarcasm heaped on socialism will follow later. For the moment let’s enjoy the visually pleasing currency.
To illustrate the devastation from hyperinflation, we will now use Venezuelan Bolivares currency to see what that destruction looks like in terms of paper money.
To start, we will look at the currency itself.
As usual for currency outside the U.S., the paper money of Venezuela are esthetically beautiful. All the bills are colorful with lovely illustrations. All the ones we will now see have a nice sized watermark at the otherwise empty space. The watermarks are same face at the bottom of the obverse (front).
Portraits on the obverse of the currency are patriotic reminders of the struggle for Venezuelan independence.
To start our pictorial excursion, here are the obverses of the 2 Bolivar through 100,000 Bolivar currency:
2 – dated 12/27/12, featuring Francisco de Miranda, his efforts for independence in South America failed; he served as forerunner of Simon Bolivar.
Final graph in this series of posts showing the devastating hyperinflation currently running loose in Venezuela will combine two sets of data.
Purpose of doing so is to see if the two sets of data overlap so that there is some good longer-term information that can be used into the future. The source for current data only goes back to late 2020.
Graph at the top of this post shows exchange rate of Venezuelan Bolivars into US dollars between June 2019 and March 2021. This graph is expressed in Bolivar soberanos (Bv.s).
Let’s look at the exchange rate in Venezuela in more detail, breaking out the exchange rate before and after 2018. On the previous graphs it looked like the exchange rate deterioration wasn’t that bad in the lead up to 2018 and it looks like things turned real bad starting in 2019.
That’s the weird thing about hyperinflation. If you remove the recent severe acceleration you still see the rapid increase earlier.
Graph at the top of this post shows exchange rate through 2018. It looks like hyperinflation kicked off in early 2018. Actually, it was going crazy before that. Inflation so severe as to destroy the economy has been running since 2012. Let’s change that graph above to a logarithmic scale to show the percentage changes better.
Socialism in Venezuela has produced the expected results – poverty, a collapsing economy, and people fleeing for their lives. Twenty some odd years of socialism has also produced another foreseeable consequence – hyperinflation.
Let’s track the exchange rate of Venezuelan Bolivars to US dollar as an indicator.