Venezuela had the most oil, then killed its currency
Venezuela once had the largest proven oil reserves in the world. By 2018, its currency had lost 99.9% of its value, and a kilo of tomatoes cost more than a monthly salary. What the collapse of the bolivar reveals about the mechanics, and the political roots, of hyperinflation.
Maduro’s Abduction in Venezuela: How Hyperinflation Destroyed the State
The facts
On January 4, 2026, U.S. special forces abducted Venezuelan President Nicolás Maduro from his home in Caracas and transferred him to New York to stand trial. The U.S. military operation in Venezuela left at least 100 people dead. The scene is surreal: a sovereign nation’s head of state, handcuffed in an American courtroom, pleading “I was kidnapped.”
What makes this abduction possible is Venezuela’s complete collapse. And behind this collapse lies a precise mechanism: hyperinflation.
Here’s what happened. Venezuela lived off oil, 95% of its revenues. When oil prices crashed in 2014, the state ran out of money. Rather than cut spending, Maduro’s government chose to print money to keep paying civil servants, subsidies, and imports. Result: too much money chasing too few goods. Inflation in Venezuela exploded.
By 2018, hyperinflation reached 130,000% per year. In practical terms, what cost 100 bolivars on Monday cost 200 the following Monday. Wages became worthless hours after being paid. The country had to remove 14 zeros from its currency.
This monetary destruction swept everything away: 8 million Venezuelans fled (out of 30 million inhabitants), businesses closed, hospitals ran out of medicine, electricity became sporadic. The Venezuelan state hollowed out. A country with the world’s largest oil reserves became a failed state.
This void made the unthinkable possible: a foreign power could kidnap a president without fearing serious retaliation. A state without credible currency has no resources. Without resources, it has no functional military. Without a functional military, it cannot defend its sovereignty.
Hyperinflation doesn’t just destroy purchasing power. It destroys a state’s capacity to exist.
To understand how a currency can lose almost all its value and what hyperinflation really is, read the Fundamental: “Inflation: mechanisms, causes and consequences.”
You’ll learn what drives prices up, why financing deficits with the printing press ends in disaster, and how central banks try to keep inflation under control.
Read the Fundamental →
