A couple of weeks ago, during the discussion of international reserves I said that in Venezuela the “implicit exchange rate”, that which results from dividing all of the monetary mass by international reserves, is typically below the exchange rate which means that there is always backing in dollars for the bolivars in the financial system. I also said that I had not checked the number much since exchange controls were started but my guess was that it was around Bs. 2,000 per US$. Well, today I looked it up and was surprised that it is currently at Bs. 1,403 per US$, while the official rate is Bs. 1,600 per US$ and the parallel market arte is somewhere around Bs. 3,200 per US$. This means that in Venezuela today you could start a currency board, convert all bolivars to dollars at the official exchange rate and have money leftover. Of course, the Government could not function. The amazing Venezuelan economy!