Having lived with double-digit inflation since Ronald Reagan was in the White House, Venezuelans know a money-stretching trick or two the rest of the world could heed as soaring commodities push up prices.

A relatively wealthy country with some of the world's largest crude reserves, Venezuela's reliance on exports of one commodity have produced a string of booms and crashes accompanied by double-digit inflation since 1985.

Round the world, soaring commodities caused by bad weather, unrest and fund volumes are spreading the inflation phenomenon and putting central banks on alert.

But Venezuela's central bank is hamstrung: the state sets interest rates below inflation, leaving few anti-inflation monetary levers.

The OPEC member's economy is often a topsy-turvy world where spending is more profitable than saving, bond investing is encouraged by socialist President Hugo Chavez and government employees moonlight as taxi drivers to make ends meet.

Over the past 25 years, its citizens have developed all sorts of techniques for stretching their money and offsetting price rises. The main rule is get rid of cash fast.

There's no point leaving it in the bank, it's better to invest. I bought this car for example, said Caracas town hall official Jorge Juarez, who leaves home at 4 a.m. to beat the snarled traffic and uses his 2007 Fiat as a taxi after work.

Juarez is in many ways a typical middle-class Venezuelan. Through a mix of hard work and shrewdness he has kept up his family's living standard even as his salary's buying power shrinks.

Cars are a good investment in the Caribbean nation, where gasoline is subsidized to the point of being almost free and demand for vehicles far outstrips supply. As such, they increase in value as they age, faster than consumer prices.

Savings rates are about half of inflation, which was 27 percent last year. Lending rates are par with that, so those who can, borrow and spend on property, cars, bonds, even gold -- all goods that quickly gain value in the bolivar currency.

Venezuelans call it killing tigers -- business on the side that augment a regular wage. Juarez is now thinking of opening a food stall at weekends to pay for his daughter's college education and to build a beach house.

Others sell imported clothes at marked up prices, or collect jewelry that can be pawned or sold when needed.

Sales have dropped recently but in Venezuela there are always buyers, we are a very consumerist country, said Evelyn Fernandez, working in a jewelry store in the giant Sambil mall in Caracas, bustling even on a weekday afternoon.

Gold is a good way of investing because prices are linked to the dollar. When you sell you get a good amount of bolivars, she said, holding an 18 carat chain that cost 5,700 bolivars. Two years ago, this cost 2,000 bolivars.

For businesses who can stomach Chavez's stridently socialist rhetoric and scattergun expropriations, there are opportunities to make money.

The Venezuelan businessman has higher profit margins than any other country in Latin America and additionally has ways of recovering investment in the very short terms, said economist Asdrubal Oliveros. We are still a very profitable economy.

It is a chicken and egg situation -- the government blames inflation on companies seeking quick profit.

Delia Tua has sold honey and spices from a wooden stall in Caracas' central market for 30 years. She has made enough to build a small house and see her daughter through university. She charges 50 percent over wholesale for her wares but says profits have diminished over the years.

I buy the spices once a month, I know that when I go back next month they will cost almost double what they did today. What I earn I have to reinvest to buy more stock, she said, clutching a roll of bolivar notes.

OIL ADDICTION

Underlying the inflation problem, at the same time as making it bearable, is Venezuela's addiction to its oil wells.

Oil has been our blessing and curse. economist Oliveros said. I'm 34 and basically the lowest inflation my generation has known is 12 percent. We're used to it.

The flow of cash through government coffers leads to massive rises in public spending when oil prices are high and inflation-fueling devaluations when the party is over.

But it has also allowed Chavez and his predecessors to subsidize products such as food and gasoline, which helps stop inflation getting out of control, while importing most goods to replace struggling local production.

A decade ago South America was still strongly associated with hyperinflation. In Bolivia in 1985, prices rose almost 12,000 percent. A strict focus on controlling prices, largely through monetary policy, has now changed that story.

Venezuela, whose annual average consumer price index increases were at times the lowest in South America, now looks like the laggard.

Inflation is lower than before Chavez, averaging 22 percent annually during his 12 years in office. The latest data shows inflation notching an advance of 28.5 percent in the 12-month period through January.

Venezuela has avoided making tough decisions needed to rein in prices, partly because of its oil wealth, but also because of Chavez's view that it more important to channel money to the poor than stamp out inflation. Minimum wage and public sector pay hikes of up to 30 percent are common.

Price controls on many goods provide a cushion for the poorest, but create distortions and opportunities for black marketeering that ends up pushing some prices up faster.

An opposition lawmaker brandished vegetables in parliament on Thursday saying prices have multiplied under Chavez. The president's socialist party responded real wages had risen and food consumption almost doubled in a decade.

( Editing by W Simon )

Inflation