“It’s a cosmetic thing that’s happening, the zeros,” said Steve Hanke, an applied economics professor at Johns Hopkins University who has advised governments facing hyperinflation. “It means nothing unless you change economic policy.”
By removing the zeros, Maduro is looking to solve what economists call hyperinflation’s “wheelbarrow problem” — the point when the currency has become so worthless that a wheelbarrow of cash is necessary to make purchases.
The new currency, which will be phased in as the old one is phased out, would bring the price of that cup of coffee at Nowak’s shop down to the more manageable sum of 20 sovereign bolivars. But few think that price will hold for long.
“We’re expecting an increase in more than 1,000 percent for the minimum wage, and of course, more inflation,” Nowak said. The tumult is so great, she said, “we’re not going to open Monday.”