There has been much talk about the Venezuelan situation. Bad policies, corruption, and a blockade imposed by the United States have caused the population of that country to suffer one of the worst economic episodes in its contemporary history.

People also talk about how the Venezuelan Bolivar has lost 99% of its value, how inflation is reaching 10,000,000% and although much of this is true, it is also important to note that there is an active component of manipulation that many want to hide.

When global media outlets start using Twitter accounts instead of data from international organizations as statistical references, it is a sign that something is not ok. We are not asking you to put on your aluminum foil hat, but we do believe that it is essential that you see the other side of the coin and that in Venezuela things are not always as the means tell them.

Venezuela's reality is very complex to analyze, and although it is interesting to debate whether the country really lives with a salary of less than $ 10 per month, today we are going to show how the media have influenced Venezuela's image and how two Twitter accounts manipulated the country's economy in front of a world that prefers to see Venezuela on fire if that burns a president they don't like.

Here we will see another side of the coin and one more reason behind the fall in the value of the Bolivar against the dollar

DOLARTODAY

Dolartoday is a company based in the United States, which focuses on delivering news parcialized against Nicolas Maduro and also provide information about the price of one dollar in Venezuelan Bolivars

Since its creation, the DolarToday team proudly claimed they never wanted to influentiate the markets, instead, they simply showed what the Venezuelan reality reflected...

If that were the case, the usual thing would be for a scientific methodology to be applied to calculate the true value of the Dollar: Let's see how serious and impartial its methods have been through the years:

There are links in the titles. Please check them out if you read spanish or use google translate to have a more in-depth explanation. Make sure to stop loading the site once you see the letter because now the link redirects you to the original Dolartoday instead of the archived information. Also, surf around different timelins to see how they randomly changed the methodology in different months

May 27, 2013

Serious and Standardized Methodology to calculate the dollar and the country's inflation

They showed an official average of price of a Colombian peso both in dollars and bolivars according to the exchange rates of a Peso against the Bolivar set by the illegal exchanges from Cucuta averaged against the official rate of a Dollar vs a Colombian Peso set by legal exchanges spread through the country.

Why not using just the official or illegal rates without mixing them? We'll never know

Below that, they offered a value known as the implicit dollar: (total liquidity of USD / Total reserves) which showed how much a person could pay to convert all the country's Bolivars into all the Dollars circulating and stored in the country.

What happened? Each person chose the value that was most convenient for them... But since the implicit dollar had a higher value than the one offered by the illegal exchanges in Colombia, these businesses slowly started to use that value in order to get more bolivars for each traded dollar.

The "DolarToday indicator" was the average of the implicit dollar and the rate set by illegal exchanges.

This was good until it stopped working for them...

June 14, 2014

They used a formula similar to the previous one, but they decided it was a good idea to increase the value of the dollar in Cucuta by 5% over than the rate set by the exchanges... just because ;)

This was good until it stopped working for them...

March 15, 2015

Well, here they decided that it was better to increase the price 7% instead of 5%

But besides that, they decided that the price of the dollar in Bolivars would be the one for electronic transfers instead of the usual cash trades. Why? Well, because most of the trades on illegal exchanges use cash, so those businesses add a percentage over the price for those who need to make a transaction instead of using cash... Of course, don't forget to add the 7% price increase that we covered before ;)

OH! and since the Venezuelan Bolivar was recovering, and the value of the implicit dollar against Bolivars was very low, they decided to stop using this indicator as a way to determine the price of the dollar in illegal markets.

Remember that before they used the implicit dollar as a reference because it was worth more than the rates offered by exchanges from Cucuta? Well, now, in a very objective way, the implicit was not very convenient for them because it was lowering the price of the dollar.

This was the year they decided to create the famous "Dolar Today:" Now, instead of people checking out what is the price on the markets, they just waited to see what was the price set by Dolar Today.

"This is the value you need to check out... The other numbers don't matter... We are Dolar Today, and all you need to know about is what Dolar Today reflects"

This was good until it stopped working for them...

April 28, 2016

Well, since the TRM (the legal exchange rate) did not work for them, they decided to use a "parallel" price illegally set by unregistered exchanges (which of course used Dolar Today as a reference... cyclical redundancy error?)

So there is absolutely no standardized indicator to give them any credibility... But it was very cool to say that in Venezuela everyone lives in extreme poverty conditions...

Well... This was good until it stopped working for them...

June 27, 2017

Well, by this time, they decided it was enough of trying to use any logical fact-based indicators, and instead, it would be more scientifically sustainable if they just googled what the people in social media said about the price of the dollar ¯\_(ツ)_/¯

This was good until it stopped working for them... 😉 lol and wait until you see what they invented next year ;)

Year 2018

They no longer wanted to search in the social networks of the Colombians, because now their totally reliable proprietary algorithm to establish a standardized and verifiable measurement started to collect data from the social media accounts of venezuelans ;)

MONITORDOLAR

In April 2018 a Twitter account by the name of Monitor Dolar emerged. It gained wide popularity among Venezuelan speculators and counterfeiters as it came up with a methodology even less logical than the one used by Dolar Today to show even higher prices.

In a few months, the site gained hundreds of thousands of subscribers, becoming the personal reference for those who had dollars.

To determine the price of one dollar, the page looked for the values of other Twitter accounts and averaged the rates established by the "chosen ones."

Of course, these other sites began to use MonitorDolar as a reference, making that account Venezuela's biggest market influencer.

In order to show these price fluctuations, Monitor Dolar arbitrarily shared the values set by other accounts, which were fighting to show the highest price possible to appear in the next day's tweet as free advertising.

This method was so illogical that MonitorDolar once picked references from accounts like @dolaroso which had less than 500 followers at the time, but showed the highest prices of the list.

The hype around this account allowed it to achieve something that Dolartoday could not. During its short lifespan, the value of the parallel dollar climbed so much that in one day, Venezuelans saw tweets showing a devaluation of up to 30%... and they believed those tweets.

How the prices of the dollar rised almost 15% in 5 hours

Basically, this page began to raise the value of the dollar to see at what point people began to protest and get upset about the account's arbitrary rates, or if on the contrary, they adapted. And it looks like they got the answer they were looking for.

At the beginning of 2019, the account shut down as if it were a social experiment that had already collected all the data needed.

In a goodbye message, the account managers were clear in basically telling Venezuelans to stop being sheep that follow whatever a group of Twitter accounts arbitrarily tell them and instead start operating as a real market.

"Do not ask us who to follow now; we caused enough commotion to believe that many of our followers were able to wake up to and understand the country's economic environment and that it is time for them to follow their own decisions and not a marker that anyone can set."

Of course, it is essential to note that whoever can influence the market also can benefit from manipulation.

CONCLUSION

It seems that Nicolas Maduro lost the battle against social media. A few months ago, the government stopped fighting against these market manipulators and decided to legalize once again the free traded of currencies.

Now the official value of the dollar is very similar to the ones showed by these twitter accounts, however there are yet some restrictions due to the lack of dollars available in banks.

Now, the country is living a unique phenomenon, The American Dollar is actually losing value.

Now, prices rise in dollars and the value of one dollar against the Bolivar has decreased a little bit. Also, One dollar bills and coins are not accepted by merchants and the old 100 Dollar bills are actually less valuable than the new ones.

Why is that? stick around until our next article