The melt-up of Venezuela’s stock market as measured by the Caracas Stock Market index (IBVC) has been accelerating.
Friday’s 5.5% gains is part of to the weekly 18.52% advance.
Year to date, the same index has been up a whopping 144%.
Last year, the same index posted around 300% nominal currency gains.
This isn’t your conventional stock market boom-bust cycle though.
Instead Venezuela’s skyrocketing stock markets are symptoms of hyperinflation or a currency crisis. It’s Zimbabwe all over again.
Cato’s Steve Hanke has a chart of Venezuela’s currency, the bolivar, as of March 2013.
I improvised it to include the June 26th black market exchange rate quote at 31.6 which is 5x the official rate.
The rate of collapse of the bolivar has been inversely reflected on the stock market. Venezuelans have increasingly used stock markets (titles to real assets and capital goods) as shelter to their savings.
If hyperinflation in Venezuela will reach the scale of Zimbabwe, then zooming stock markets would only buy 3 eggs.
Interesting to see in real time, what seems as another fiat money regime on the brink of extinction.