sábado, 30 de mayo de 2015

What is the impact of mass media on the currency of nations? The Venezuelan case

A practical example of the influence of the media on the monetary situation of the countries is found in what has happened in Venezuela between 2014 and 2015, time during which a digital media, a website written from outside Venezuela has determined the value of the national currency of the country against the dollar in the unofficial currency market.
The most striking event occurred the week beginning May 25, 2015, when the parity set by the website doubled the maximum official rate established by the Venezuelan monetary authorities, which placed the value at about 200 bolivars per dollar. But that week, the aforementioned web page, placed the value of the bolivar in the unofficial market at about 220 per dollar, more than doubled. The page authors have explained that they make their calculations based on the average resulting from the addition of two values: a) the implicit value of money (M1 / International Reserves) and the price of the bolivar against the dollar in the city of Cucuta on the border between Venezuela and Colombia. But the resulting average of the two figures never justifies the amount allocated by the website to the value of the Venezuelan currency against the dollar. As a simple example we can say that the week that began on May 18, 2015, the implied value of the bolivar against the dollar was 128 bolivars. In addition, the values of transactions bolivar / dollar on the Colombian-Venezuelan border are not registered in official records to establish with certainty the reality exchange. So, therefore, that the figures published by the website indicated constitute a double speculation: a) to establish a figure speculation with no basis in economic and b) speculation in the stockjobber sense.
But how can this happen?
Well, all social phenomena can be explained. In this case, it occurs because in Venezuela there is an exchange control since 2006 that difficult transaction in the economy and creates a situation in which demand outstrip supply of foreign exchange at the official price; there are also three exchange rates, which exacerbates the problem.
Why economic actors assign credibility to mass media?
Since the media appeared on the social scene, most people assigned them great credibility. The word spread by the media, the press first and then radio and television has always enjoyed great prestige and very few people question its veracity. In the cyber world of the XXI century, the tradition of media credibility has been extended to the new forms of communication: Internet and digital media; therefore, the information disclosed by the website portals as the mentioned in this article have captured the attention and credibility of an important part of the public.
But in the case of Venezuela, the damage caused to the economy by the manipulated information of the webstite without economic objectivity is such that the Central Bank of Venezuela and the association of private banks in the country during the week of May 25, 2015 had to express its alert to economic actors to avoid believing in baseless figures released by the mentioned digital media, confirming that the only official figures that should be respected by economic actors for their own benefit are the figures disclosed by the monetary authority .
In the link below the official declaration of the Banking Association of Venezuela can be seen:
What happened in Venezuela regarding information on the monetary reality is an extraordinary communication phenomenon which confirms the great power of the media and its influence in politics, economics and social change, as amply explains the book entitled Sobrepoder (Spanish) Overpower:
Sobrepoder, Amazon, print edition, paperback 

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