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Re: Venezuela nears total collapse #159393
03/24/2018 05:25 AM
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Nicolas Maduro has a wonderful plan...nancial persecution" facing his country.

He's... going to eliminate three zeros from his nation's currency.

You can't make this stuff up.

Onward and upward,
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Re: Venezuela nears total collapse #159394
04/17/2018 04:47 AM
04/17/2018 04:47 AM
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With it's oil industry collapsing, Venezuela now has to import oil . They're paying $80 or $90 a barrel for oil, and selling it at the pumps for $0.

This is like something out of Atlas Shrugged.

Quote
... The long queues for food and medicine in Venezuela are now well documented, but lines of cars waiting outside petrol stations – something that would have been unthinkable a few years ago, when petrol cost $0.01 (0.7p) per litre – are becoming more common.

Filling your tank is still cheaper than drinking water in Venezuela, but the industry can no longer meet domestic demands – and is having to put exports first. Monaldi says that if production continues to fall to below a million barrels, the consequences could be catastrophic.

“The domestic consumption of oil is around 450,000 barrels and Venezuela needs the exports to repay its debt with Russia and China,” he says.

“They have to import for two reasons. One is the collapse of the refining infrastructure and the other is that its oil is naturally heavy so they need to import diluents to blend with their oil to re-export it.

“One of the craziest things is that a part of Venezuela’s imports is for the domestic market, but given its price, they practically give gasoline away for free. They are importing barrels that cost $80 to $90 and selling them at $0.” ...
Onward and upward,
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Re: Venezuela nears total collapse #159395
04/30/2018 08:42 AM
04/30/2018 08:42 AM
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Here's another socialist success. Venezuela is importing oil from the U.S. , paying $80 to $90 a barrel and selling it for $0.

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Venezuela has the world's largest proven reserves of petroleum. In 1998, when Bolivarian socialist Hugo Chavez was elected president, the country was producing about 3.5 million barrels of oil a day. As recently as 2013, when Nicolas Maduro ascended to the presidencey upon Chavez's death, the country was still pumping out about 2.8 million barrels a day. Since 2016, month daily production has dropped to 1.5 million barrels.

Venezuela's heavy crude oil needs to be diluted with lighter petroleum products so that it can be refined into fuels. The Independent reports that as a result of the ongoing collapse of domestic refining, the South American country is now obliged to import about 200,000 barrels a day of diluents from the United States. The Venezuelan government sells gasoline at 1 cent per liter (80 cents in the U.S.). Even with the fanciful assumption that all the petroleum in a barrel could be refined into vehicle fuel, a rough calculation implies a value of $1.60 per barrel. The diluents from the U.S. cost about $80 to $90 per barrel.

"One of the craziest things is that a part of Venezuela's imports is for the domestic market, but given its price, they practically give gasoline away for free," Francisco Monaldi, a fellow in Latin American energy policy at Rice University, tells The Independent. "They are importing barrels that cost $80 to $90 and selling them at $0."

Despite Chavez's dysfunctional economic policies, Venezuela's GDP ascended along with oil prices during the first decade of the 21st century. But since peaking at $334 billion in 2011, the country's GDP has dropped to $215 billion. The economy shrank by 16 percent last year, and the International Monetary Fund projects it will shrink by another 15 percent this year. Inflation, meanwhile, is nearing an annual rate of 9,000 percent.

As The Independent notes:

Quote
Oil makes up more than 90 per cent of the nation's exports, but a combination of government corruption, lack of investment and the migration of qualified staff have left the industry in ruins. It's a crisis that has directly hit the country's ability to import resources like food or medicine for the Venezuelan population.

It is a vicious spiral. It is estimated that 10 per cent of the population has emigrated. Almost two thirds of all households have at least one family member living abroad. And among those 3 million migrants are young and competent workers who have escaped from a country that sinks deeper into crisis.
This is what real socialism looks like.
Onward and upward,
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Re: Venezuela nears total collapse #159396
05/06/2018 07:57 AM
05/06/2018 07:57 AM
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Mounting economic chaos leaves many Venezuelans in the dark

SCOTT SMITH,Associated Press•May 4, 2018

MARACAIBO, Venezuela (AP) — A month-long blackout in Jennifer Naranjo's neighborhood in the Venezuelan port city of Maracaibo leaves her anxious. She's eight months pregnant and passes hot, sleepless nights with no air conditioning, swatting away mosquitoes, worried about her unborn daughter's future.

"I dream about getting ahead for my baby," said Naranjo, whose husband left in January to find work in Chile. "In Venezuela, the situation gets worse every day."

Blackouts are nothing new under two decades of socialist rule in Venezuela. But they've grown more frequent, and are lasting longer, as the OPEC nation's economy hits a breaking point with hyperinflation making increasingly scarce food and medicine unaffordable for many.

Naranjo's La Chinita neighborhood has gone without power since late March, when a transformer exploded. Officials repeatedly promised the parts needed to repair it would arrive the next day. So far they haven't come.

The four-block area is a small symptom of a vastly more widespread problem that is generating unrest across much of Venezuela, including Maracaibo, a city of 1.5 million people that has long exported energy in the form of oil across the world.

Venezuela's government doesn't publish figures charting power outages, but the human rights organization Venezuelan Observatory of Social Conflict reports that blackouts prompted 325 street protests across Venezuela in the first three months of 2018.

Maracaibo witnessed the greatest number of protests, said organization director Marco Ponce, including one where residents blocked a busy street and a 15-year-old boy was shot dead by a passing motorist.

A massive blackout put most of Maracaibo in the dark for Christmas Eve, and since then officials have rationed power across the sprawling city. Scheduled blackouts eat up at least 11 hours a day, not counting unplanned failures.

With air conditioners idle and daytime April temperatures often nearing 95 degrees Fahrenheit (35 degrees Celsius), families throw open their doors and windows to allow in any hint of a breeze — along with mosquitoes. Naranjo, 20, fears a bite could infect her and her daughter, Pamela, with the Zika virus, which has stricken about 70 of Maracaibo's infants with microcephaly, according to the local charity My Miracle Foundation, which supports children with the illness.

With failing light switches and wall plugs, residents also can't charge phones or run television sets, so they often pass time chatting with neighbors in the street. They have to cook and eat by candles, which are costly.

"We can't wait any longer," said homemaker Elsa de Suarez, 58, who says her lifeless refrigerator doesn't allow her to keep food from spoiling. "It's an emergency."

Venezuela's status as home to the world's largest fossil fuel reserves should have made it immune to an energy crisis. It also has the Guri Dam, one of the world's largest hydro-electric projects and the cornerstone of an electrical grid once the envy of Latin America that has now fallen into disrepair.

Experts say only two or three of Maracaibo's 24 fuel-powered turbines still run after years of neglect, eking out just 10 percent of their previous output. Other power comes from the dilapidated national grid.

Maj. Gen. Luis Motta, Maduro's minister of electrical power, blamed a series of recent outages in Maracaibo on saboteurs attempting to undermine the government. They attacked power substations using Molotov cocktails, he said on state TV, without providing evidence. He didn't respond to a request from The Associated Press for comment.

However, experts say the power crisis is the government's own making. Powerful officials have been accused in U.S. court proceedings of looting investments earmarked for the electrical system and the country has kept home power bills among the cheapest in the world, around 1 cent a month, meaning the grid depends heavily on subsidies from a government with increasing financial problems.

The shortages are adding to the misery of a Venezuelan economic collapse on the scale of the Great Depression of the 1930s and as production in the oil industry — the largest consumer of power — has fallen to the lowest levels in decades.

Winston Cabas, president of the Association of Electrical Engineers of Venezuela, estimates that it would take an infusion of $50 billion over a decade to restore the country's electrical system, which he said is as precarious as Haiti's after the 2010 earthquake.

"The problem is not sabotage or terrorism," said Cabas. "The problem is corruption."

Venezuelans just want their lights on.

In downtown Maracaibo, more than 100 senior citizens recently grew frustrated standing in line for hours outside a bank waiting for the power to come so they could cash their monthly pension checks to buy food.

Across the bay, a group of fisherman mending shrimping nets paused when they heard the hum of their refrigerator die from another outage. They worried this was the one that would finally fry the refrigerator where they store their catches.

La Chinita residents show visitors the charred transformer box hanging on a pole. Then they roll up a sleeve to reveal fresh mosquito bites from the night before.

Many gather each evening on a corner in front of a mustard-colored flat-roofed home as dusk turns to dark. Bug repellent is too expensive, so one man burns a cardboard egg carton, which smolders slowly and helps keep the mosquitoes away.

A woman flips through the pages on a clipboard detailing the blackout's impact on La Chinita's 135 residents, including 29 young children and at least three bedridden elderly neighbors. She shows the record to officials urging their help.

Naranjo, pregnant, eats by the light of a shrinking candle stub. Unable to charge her phone at home, she can only talk to her husband in Chile once every three or four days. They often talk about her following him abroad.

For now, Naranjo remains fixated on finding money to deliver her baby in a good clinic and on buying her own mosquito net. She feels guilty asking relatives for too much help.

"Everything is so expensive," she says.

The candle flickers from a breeze and she stops eating to cup her hand behind the flame to shield it from blowing out and leaving her in the dark.


"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861
Re: Venezuela nears total collapse #159397
05/10/2018 05:18 AM
05/10/2018 05:18 AM
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Nikki Haley says it\'s time for Maduro to go.

Quote
U.S. Ambassador to the United Nations Nikki Haley called on Venezuelan dictator Nicolás Maduro to step down on Tuesday, calling the elections scheduled for May 20 a "sham." She noted that Venezuelan migrants are causing a crisis in Latin America similar to the crisis of Syrian migrants in Europe, and that Venezuela's "implosion" represents a threat to Latin America.

"The systematic oppression of the Venezuelan people has become an active threat to the entire region," Haley declared at a conference on Latin America at the State Department. "For the safety and the security of all people in Latin America, it is time for Maduro to go."

Haley powerfully backed up this call for regime change by referencing the current state of affairs in Venezuela and the surrounding region, and the ideological divide in the region....
He won't go until there's nothing left to loot.

Onward and upward,
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Re: Venezuela nears total collapse #159398
05/11/2018 03:57 AM
05/11/2018 03:57 AM
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Late-stage socialism,Venezuela edition. There is a wave under way to seize the assets of Venezuela's state-owned oil company, because "No one wants to be last in line."

Quote
... The decision, which came amid the accelerating deterioration of Petroleos de Venezuela S.A.’s production capacity, could lead creditors to try to seize other Venezuelan assets abroad, including oil exports, to recover the more than $40 billion they claim they are owed.

“Creditors are now saying to themselves, ‘Look, we now have confirmation that you can go out and embargo PDVSA,’ and many of them are going to rush into court to ask for their own seizures,” said Antonio De La Cruz, executive director of Inter American Trends in Washington, D.C.

“We are at the start of a snowball” rolling downhill, added Russ Dallen, managing partner of Caracas Capital Markets, an investment bank in Miami. “Now that people have started to file lawsuits, we are going to see a run because no one wants to be the last in line.” ...
Onward and upward,
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Re: Venezuela nears total collapse #159399
05/21/2018 04:50 AM
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Nicolas Maduro has won another term as president of Venezuela. Not exactly a surprise.

Onward and upward,
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Re: Venezuela nears total collapse #159400
05/23/2018 05:10 AM
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Could China save Venezuela?

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Nicolás Maduro may have received more votes in Venezuela’s recent presidential election, but the record-low voter turnout is widely seen as its own form of protest against his increasingly oppressive socialist regime. So as long as Maduro’s government controls the voting process, his opponents will continue to advocate elections boycotts to try to erode the legitimacy of his government. Once again we see democracy being wielded as a weapon by tyrants, rather than an answer for political victims.

The true challenge to Maduro’s regime will not come from elections, but rather the growing threat of a coup. While the political heir to Chavez has managed to keep the military loyal by allowing them to profit from cartelizing vital supplies, the continuing deterioration of the nation’s economy has sparked growing rebellion and desertion among the ranks. As Maduro’s government has continued to doubled-down on the same failed socialist policies that created one of the world’s gravest humanitarian crises, action by the military is increasingly seen as inevitable – including by the leaders of neighboring countries.

Of course the destruction of Venezuela is not the result of a single man, and the issues plaguing the country will not simply disappear with his removal. So the question is what options realistically exist for a post-Maduro Venezuela, and what would those ramifications be for both its people and the rest of the world?

A few years ago I looked at what Ludwig von Mises would recommend Venezuela do, drawing inspiration from his writings on post-World War I Austria. Policy recommendations included condemning the socialist ideology that destroyed the country, mass-privatization of the economy, abandoning the bolivar, and abandoning all trade restrictions. While these would still be the ideal tonic for what ills the country, even in the face of socialist ruin the intellectual climate of Venezuela is still far from the classical liberalism of Mises.

This is demonstrated by the sad reality that the leading opposition parties, including Justice First, Popular Will, Democratic Unity Roundtable, and Democratic Action are a reaction to the violent crackdown and growing unconstitutional authoritarianism of Maduro’s government, rather than socialist ideology itself. In fact, all but Justice First still explicitly make socialist appeals in their political campaigns. The continued appeal of socialism among the public is so great that Henrique Capriles, a leading oppositional figure, called for a socialist-coalition as the best strategy to take down Maduro.

So if the public will does not exist to embrace true market reforms, what options exist for the country?

The first issue Venezuela faces is transitioning away from the bolivar that has become worth less than World of Warcraft currency thanks to Maduro’s hyperinflationary policies.

The best recent example of transitioning away from such monetary chaos is Zimbabwe, which stopped printing its own worthless currency in 2009 and transitioned to using the US dollar at an exchange rate of $1 for Z$35,000,000,000,000,000. It’s possible that Venezuela could make a similar move – especially as US dollars are already circulating in what few markets still function in the country.

Unfortunately this may not work quite as well in today’s Venezuela.

If the Venezuelan people are not prepared to completely discard the personality cult of the late-Hugo Chavez, a full embrace of the American dollar may face complications – in part due to the US’s militarization of financial markets in recent years. While the pros may still outweigh the cons to formally adopting the dollar, there may be another option with unique appeal to Venezuela: the Chinese yuan.

Will China Bailout Venezuela?

Even during the peaks of the oil boom, the Venezuela’s socialist economy relied greatly on the Chinese government. China is already Venezuela's biggest lender, and has already been forced to restructure payments with its largest investment in Latin America. Of course Venezuela is going to need more than debt restructuring to stabilize its financial situation. Given its aggressive desire to expand its global economic footprint, China may see potential in a broad Venezuelan bailout package – one that could include the country formally adopting the yuan.

In 2015, the Mugabe government of Zimbabwe tried to make a big deal out of adopting the yuan as a legal currency in exchange for debt cancelation. The problem is that the announcement ignored that the yuan had already been legal currency dating back to 2009, and the debt forgiveness package was largely “a mirage.” This is understandable. Zimbabwe is of modest value to China outside of its use in projecting a growing global Chinese influence – with its tobacco industry the most lucrative trade the African nation has with its Eastern benefactor.

Venezuela’s oil reserves, on the other hand, have long interested China’s Communist Party – and Maduro’s government already prices it in renminbi as a way to get around the US dollar. What if China offers a bailout package – including perhaps skilled workers to replace those that have fled the government-operated PDVSA – dependent on Venezuela receiving oil payments made in the yuan? Given how vital the oil economy is to Venezuela’s economy – making up 50% of GDP - renminbi would likely begin to quickly circulate through the Venezuelan economy in a way that hasn’t happened in Zimbabwe markets.

China would benefit from this arrangement in ways beyond its own energy consumption. A formal adoption of the yuan would give the country its strongest foothold in Latin America to date, a new partner to its “One Belt, One Road” initative, and would offer the most significant challenge yet to the dollars' hegemony in energy markets due to the sheer size of Venezuela’s reserves. Since Chinese officials have made it clear that they want to reduce global dependence on the dollar in the future, this could be a strong power play – particularly given the back and forth on trade we’ve seen between Xi and the Trump Administration (which could possibly see this as a 21st Century violation of the Monroe Doctrine.)

Of course Venezuela’s hyperinflation is really a consequence of the country's larger economic evils: the destruction of economic productivity due to the nationalization of industry and an expensive welfare state.

The rise of China is itself a testament to what even modest steps to market liberalization can do for a previously socialist economy. If Chinese support comes with stronger property rights than we see under Maduro – whose government recently nationalized a Kellogg’s plant – then this too would represent a positive step forward for Venezuelan citizens, even if it would reduce the country to more of a vassal state of China.

China Can’t Save Venezuela

While a Chinese bailout of Venezuela could offer desperately needed relief to the country, this third-way approach can’t go on forever – and China itself may end up being an illustration of this. For all the talk of China’s economic strength, the country has been forced to resort to overstating its own economic growth in recent years, and is very likely still doing so today.

Even more troubling is China’s own reliance on debt to keep its economy growing. While lacking the massive welfare programs of Chavez and Maduro, China has been indulging in a decade-long debt binge with massive government spending on everything from infrastructure, industry, and island creation. While the strength of China’s government gives it significant power in kicking the can down the road, global officials – such as the Reserve Bank of Australia - are starting to get alarmed.

The threat to China stems from the same reason that could make it attractive to a future Venezuelan government: their shared socialist ideology and belief in central planning. While China has long departed from the communist policies in Mao – even if Xi aspires for his degree of power – its continued reliance on government-centric five year plans and bloated state-run firms has created its own form of Keynesian nightmare.

In the words of Per Bylund:

Quote
The Chinese economy obviously relies very heavily on state-sponsored, state-planned projects such as these constructions of buildings. It probably wouldn’t be much of an exaggeration to say that the Chinese economy is a Keynesian jobs project of outrageous scale, which also means that is as removed from real value creation as any Keynesian undertaking....

What China teaches us about economics and economic policy is the lesson that is generally not provided in college classrooms: the important distinction within production between value creation and capital consumption. The story of China’s economic development is to a great extent one of unsustainable, centrally planned growth specifically in terms of GDP — but a lack of sustainable value creation, capital accumulation, and entrepreneurship.
In conclusion, while my wish is to see the Venezuelan people be rid of the vile Maduro government as quickly as possible, the country is haunted far more by its continued loyalty to socialism than it is the actions of a particular government leader. While the realities of modern Venezuela – combined with the global ambitions of China – could make a deal between the two countries a logical outcome, the Chinese model is not one that will bring prolonged prosperity.

True hope for Venezuela, and the rest of Latin America, must come from rejecting the inevitable failures of Marxism and embracing a Misesian understanding of economics and classical liberalism.

In other words, Menos Marx, Mas Mises.
Onward and upward,
airforce

Re: Venezuela nears total collapse [Re: ConSigCor] #167221
06/22/2018 12:29 PM
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Killings by security forces rife in Venezuela, rule of law 'virtually absent': U.N.

Stephanie Nebehay


GENEVA (Reuters) - Venezuelan security forces suspected of killing hundreds of demonstrators and alleged criminals enjoy immunity from prosecution, indicating that the rule of law is “virtually absent” in the country, the United Nations said on Friday.

The U.N. human rights office called on the government to bring perpetrators to justice and said it was sending its report to the International Criminal Court (ICC), whose prosecutor opened a preliminary investigation in February.

The U.N. report cited “credible, shocking” accounts of extrajudicial killings of young men during crime-fighting operations in poor neighbourhoods conducted without arrest warrants. Security forces would tamper with the scene so that there appeared to have been an exchange of fire, it said.

There was no immediate response from the government of President Nicolas Maduro to the report.

Critics say Maduro has used increasingly authoritarian tactics as the OPEC nation’s economy has spiralled deeper into recession and hyperinflation, fuelling discontent and prompting hundreds of thousands to emigrate in the past year.

About 125 people died in anti-government protests last year.

Security forces were allegedly responsible for killing at least 46 of them, U.N. rights spokeswoman Ravina Shamdasani told a news briefing, adding: “Evidence has reportedly disappeared from case files.”

Maduro says the opposition protests were aimed at overthrowing him and accuses the United States of directing an “economic war” against Venezuela.

“The failure to hold security forces accountable for such serious human rights violations suggests that the rule of law is virtually absent in Venezuela,” said Zeid Ra’ad Al Hussein, U.N. High Commissioner for Human Rights. “The impunity must end.”

Zeid called on the U.N. Human Rights Council on Monday to set up an international commission of inquiry into alleged violations in Venezuela — one of its 47 member states.

“The time has come for the Council to use its voice to speak out before this tragic downward spiral becomes irreversible,” Leila Swan of Human Rights Watch said in a statement on Friday.

The unpopular Maduro has cast the release of dozens of opposition members as a peace gesture following his re-election to a new six-year term last month, which was condemned by most Western nations as an undemocratic farce. His government denies the detainees are political prisoners.

Venezuela is suffering from an economic collapse that includes chronic shortages of food and medicine and annualised inflation around 25,000 percent. Maduro blames an “economic war” directed by the opposition and the United States — which has imposed new sanctions on Venezuela’s oil industry.

Under previous attorney-general Luisa Ortega Diaz, who fled Venezuela last year, 357 security officers were believed to be under investigation for crime-related killings, but there has been no public information since then, the report said.


"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861
Re: Venezuela nears total collapse [Re: ConSigCor] #167466
07/13/2018 01:09 PM
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Higher oil prices won't save Venezuela. Venezuela was one of the richest countries in South America - when oil was $18 a barrel. The price of oil is not what's wrong with Venezuela.

Quote
... Now that crude prices are rising again, the political and economic pressures are easing on oil exporters as revenues, in most cases, begin to surge. But there is one glaring exception, one country that relies on oil exports for essentially all its export revenue and whose economy is continuing its downward spiral despite the sharp rise in oil prices: Venezuela.

The simplest way to gauge the impact of oil price fluctuations on the economy and the potential effect on policy is to look at an exporter’s fiscal break-even price. The break-even price is the level at which oil prices need to sell in order to allow an exporter to meet government spending and produce a balanced budget. When crude prices fall below break-even, budget deficits start to balloon, eroding reserves and threatening economic stability. Depending on the availability of other exports and the size of reserves, large gaps between break-even and market prices can force a government to cut spending, raise taxes and borrow heavily. It can squeeze an economy well beyond the oil industry.

The most dramatic response to the drop in global oil prices came in Saudi Arabia, where an ambitious and daring crown prince, Mohammed bin Salman, launched revolutionary reforms with an eye toward, among other things, reducing the country’s overreliance on oil. While the success of many of his reform plans remains unclear, the crown prince’s efforts to lower Saudi Arabia’s break-even price has been little short of spectacular. Before prices fell, Saudi Arabia’s break-even price was $105.70 per barrel. The government has since slashed expenditures by about one-fifth, cutting subsidies and other expenses, and raising taxes. The break-even level now stands at $74.40, and a recent study by a Japanese bank predicts it will reach $55 a barrel by 2021, giving the kingdom ample room to finance Crown Prince Mohammed’s goal of diversifying the economy.

Other Gulf states have also moved to narrow the gap, introducing a value-added tax, lowering subsidy payments and promoting new industries. Now, with oil prices climbing, these petroleum producers are set to reap a sharp rise in revenues against a lowered level of national expenditures.

The contrast with Venezuela could not be starker. Despite the rise in prices, Venezuela, holder of the world’s largest known oil reserves, is seeing its oil income continue to plummet, along with the rest of its economy.


Onward and upward,
airforce

Re: Venezuela nears total collapse [Re: ConSigCor] #167591
07/25/2018 01:06 PM
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Venezuela's inflation rate could reach ONE MILLION PERCENT by the end of the year. And that, folks, is hyper-inflation.

What does an inflation rate like that even mean? If you can buy a candy bar for a dollar now, ONE HOUR FROM NOW it will cost $2.15.

Onward and upward,
airforce

Last edited by airforce; 07/25/2018 02:25 PM.
Re: Venezuela nears total collapse [Re: ConSigCor] #167632
07/31/2018 12:12 PM
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Venezuela removes zeros from currency to slash inflation. Yes, you read that right. That should cure the 1,000,000% inflation in Venezuela. crazy

Quote
Venezuelan President Nicola Maduro took to television last week to announce his solution to the country's monetary woes: eliminating five zeros on all new Venezuelan bolivar bills.

Sure, that's an unorthodox—some might say useless—attempt to combat hyperinflation, but the great Venezuelan experiment with socialism continues apace.

At present, the highest denomination bill available is 100,000 bolivars. The new bills, set to hit the streets on August 20, will range from two to 500, with each unit representing 100,000 bolivars. To put that into perspective, as of last month, a cup of coffee in Venezuela cost 1 million bolivars. Maduro initially floated the idea of eliminating three zeros from bolivar bills in March, but didn't follow through—and four months later it's seemingly clear that hacking a mere three zeros off the currency won't solve anything. But five, ah, now you're getting somewhere.

Hyperinflation has been a consistent problem in socialist Venezuela. Maduro's predecessor, President Hugo Chavez, enacted a similar policy in 2008, eliminating three zeros from the national currency. It did little to fight the underlying causes of Venezuela's inflation. Instead of trying the same silly plan again, Maduro must address the underlying problems leading to Venezuela's inflation if he has any real intention of alleviating the problems facing his country.

With price and wage controls, and a largely centrally planned economy inherently incapable of meeting the needs of its populace despite being gifted with the largest oil reserves in the world, inflation in Venezuela is here to stay until people abandon the state-sponsored currency.

Already in some parts of Venezuela, many people have turned to Bitcoin, derided as highly unstable in the developed world, for an alternate store of value to the overabundant bolivar. As Matt O'Brien noted on Thursday in The Washington Post, the International Monetary Fund increased its end of year projections for Venezuelan inflation from 12,875 percent to 1 million percent in just a few short months.

On Tuesday, economist Daniel Mitchell examined the World Bank report that compared the Chilean and Venezuelan economies on his blog. Despite their similar histories and cultures, Chile abandoned the socialist experiment in 1973 while Venezuela embraced brutal economic collectivism 1999 under Chavez.

The differences are astonishing. Chile has been blessed with enormous economic growth and some of the highest standards of living in South America while Venezuela lags behind with what the IMF has described as one of the worst economic crises in the last 60 years.

Even as socialists in America assert that "Venezuela wasn't real socialism," the evidence to the contrary is clearer than ever. The number of zeros on the bolivar is a symptom; socialist central planning is the disease.


Socialist countries eventually run out of everything except zeros. You can't make this stuff up.

Onward and upward,
airforce

Re: Venezuela nears total collapse [Re: ConSigCor] #168073
09/14/2018 12:27 PM
09/14/2018 12:27 PM
Joined: Jan 2002
Posts: 18,392
Tulsa
airforce Online content
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airforce  Online Content
Administrator
Senior Member
Joined: Jan 2002
Posts: 18,392
Tulsa
Venezuela just raised the minimum wage 3000%. Can you guess what happened?

Yep. Workers are getting fired.

Quote
Venezuelan workers who earned a pittance are now earning a slightly larger pittance, thanks to a big increase in the minimum wage. What they may not have are jobs.

Starting this week, 7 million employees are guaranteed 1,800 bolivars a month -- worth about $20 at the black-market rate. President Nicolas Maduro intended the mandate as political boost, but it’s having the opposite effect as companies, already hit by Venezuela’s epic economic contraction, tell workers they can’t afford to keep them.

While there have been many similar moves in the past, never has one been so disruptive, arriving amid hyperinflation, depression and devaluation. Some employers are restructuring costs, rejiggering pay scales and negotiating settlements with workers. Others are simply dismissing people. Much of the action happens secretively as companies try to avoid punishment by the government, which has been jailing those it believes are flouting the rules....


Onward and upward,
airforce

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