Quico says: Say a long history of devaluations, interest rate swings and double digit inflation has left people skeptical that your currency can function as a reliable store of value. Say you want to make it strong again, but you're not sure how.
What do you do?
Well, you could clamp down on the runaway government spending that's causing runaway liquidity growth. Y'know, that boring stuff that actually affects the bolivar's value.
Would that work? Yes. Could you sell it to Chávez? Not a chance. To carry it through, he'd have to alter his behavior, and God knows he won't consider that.
What you need is not a policy so much as a gesture...preferably one feeble minded enough to get Chávez on board. Like, you could knock three zeros off of the bolivar, put the word "strong" in front of it and leave it at that!
See, that way it has to be strong...hell, it's right in the name!
Whoever thought of pitching this idea to Chávez is a genius. It's just the kind of vaudeville the guy continually mistakes for policy; he must've loved it!
Addendum: Google "Bolivar Fuerte" and what you find are these...
Turns out, before it was a stupid chavista idea, Bolivar Fuerte was a brand of cigars - Cuban cigars, no less. Coincidence? You decide.
(Or maybe this is what we'll be using for cash come January...talk about your money going up in smoke.)