General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region Forums$150 for a dozen eggs? The price of inflation and shortages in Venezuela
[link:http://www.latimes.com/world/mexico-americas/la-fg-venezuela-inflation-0531-snap-htmlstory.html|Los Angeles Times
The International Monetary Fund has predicted that inflation in Venezuela will hit 720% this year. That might be an optimistic assessment, according to some local economic analysts, who expect the rate to reach as high as 1,200%.
A sharp drop in global prices for oil -- on which Venezuela depends for most of its foreign currency -- is a big part of the problem. Critics also accuse the government of irresponsible spending on social welfare programs and oil subsidies to Cuba and other countries.
To understand what that kind of inflation means, we spoke to Maria Linares, a 42-year-old single mother who works as an accounting assistant at a government ministry and lives in an impoverished neighborhood of the capital, Caracas.
Her monthly pay, including a food allowance, is 27,000 bolivars.
Thats $2,700 a month at the official exchange rate of 10 bolivars to the dollar. But Venezuelans have so little faith in their currency -- or the government's ability to fix the country's deepening economic crisis -- that a dollar can fetch upward of 1,000 bolivars on the black market. At that rate, Linares earns just $27 a month
TampaAnimusVortex
(785 posts)Inflation on this scale can only come from mass money printing, and the problem there is that it mostly benefits the first people who get the cash infusion, which is rarely the poor. By the time it "trickles down", it has devalued all the currency units and is pretty much a wash on the help it can provide.
CurtEastPoint
(18,644 posts)I don't think that's true, is it?
Lee-Lee
(6,324 posts)"Socialism" is not one set way of doing things, and just because someone implements socialism doesn't mean they will manage it and run the country correctly.
This is mismanaged socialism done wrong, that is all.
hack89
(39,171 posts)harrose
(380 posts)... who helped to loot the country.
hack89
(39,171 posts)harrose
(380 posts).. but that doesn't excuse the Rethug banksters who helped to loot the country and took their share.
hack89
(39,171 posts)harrose
(380 posts)Experience has shown that every time there is financial chaos, it is either caused by Rethug banksters' criminal activity or incompetence. So, why should this time be any different?
Adrahil
(13,340 posts)It's not that their policies are socialist, but that the people running it are morons who think that command the economy to do as they will. Other fairly socialist countries manage to not go bankrupt.
roamer65
(36,745 posts)When Saudi Arabia crashed the oil market, Venezuela was ready made for a fiscal crisis. The majority of Venezuelan GDP comes from oil sales.
Nigeria is having fiscal issues as well.