Did George Soros Short the Venezuelan Currency?
If it isn't the islamic morons of the middle east driving economies into the dirt, it's strutting Latin American dictators who are running their ships of state into the rocks.
The devaluation of the Venezuelan currency is latest step in a series of moves that will end with the collapse of an economy that is becoming more and more dependent on sales of oil. Like muslim countries, Venezuela produces little in addition to oil. The nation's growing socialist drive is going to create obligations that far exceed the economy's productive capacity.
Worse, as the following article points out, the new two-tiered exchange system is perfect for corruption. It gives opportunists an easy play -- buy low and sell high, and best of all, buying and selling with no risk. The two-tiered exchange makes it a breeze.
Devaluation ups stakes in Venezuela election year
Venezuela's Chavez devalues currency
Venezuela stagflation persists, prices up 25 pct
Venezuela's Chavez threatens to oust Toyota
CARACAS, Jan 9 (Reuters) - Venezuelans rushed to the shops on Saturday, fearful of price rises after a currency devaluation that will let President Hugo Chavez boost government spending ahead of an election but feeds opposition charges of economic mismanagement.
In a bid to jump-start the recession-hit economy of South America's top oil exporter, Chavez on Friday announced a dual system for the fixed-rate bolivar.
It devalues the currency to 4.3 and 2.6 against the dollar, from a rate of 2.15 per dollar in place since 2005, giving the better rate for basic goods in an attempt to limit the impact of the measure on consumer prices.
The opposition seized on fears that prices for imported goods will double as shoppers formed lines of more than a hundred people outside some stores in the capital Caracas.
The socialist Chavez believes the state should have a weighty role in managing the economy. During his 11 years in office he has nationalized most heavy industry, and business and finance are tightly regulated.
"By establishing the exchange rate at 4.3 bolivars per dollar, the quality of life for Venezuelans is automatically devalued since we now have half the money we had before," said Caracas Mayor Antonio Ledezma, a Chavez opponent.
BLACKOUTS, WATER SHORTAGES
Opposition parties, emboldened by public dissatisfaction at frequent blackouts and water shortages and a 2.9 percent economic contraction in 2009, hope to strip Chavez of his legislative majority in September.
The devaluation is embarrassing for Chavez, who resisted calls from economists and many government allies to make the move last year when oil prices were at their lowest and elections a long way off.
Finance Minister Ali Rodriguez said the devaluation will add 3 percent to 5 percent to inflation, already the highest in the Americas at 25 percent last year.
"The popularity of the government is obviously going to be sharply and negatively affected," said economist Pedro Palma. "The inflationary impact of the measure diminishes the real income of people. People can consume less."
The new two-tiered exchange system offers the 2.6/dollar rate for goods deemed essential including food, medicine and industrial machinery. Other products, including cars and telephones, will be imported at the higher 4.3 rate.
Economist Pavel Gomez of the IESA economic school said the new system will increase opportunities for graft in a country that already is corruption-ridden.
"Multiple exchange schemes are incentives for corruption, more so if they are applied in the Venezuela way," he said. "Those who have good contacts can buy at 2.6 and sell at 4.3."
The devaluation of the Venezuelan currency is latest step in a series of moves that will end with the collapse of an economy that is becoming more and more dependent on sales of oil. Like muslim countries, Venezuela produces little in addition to oil. The nation's growing socialist drive is going to create obligations that far exceed the economy's productive capacity.
Worse, as the following article points out, the new two-tiered exchange system is perfect for corruption. It gives opportunists an easy play -- buy low and sell high, and best of all, buying and selling with no risk. The two-tiered exchange makes it a breeze.
Devaluation ups stakes in Venezuela election year
Venezuela's Chavez devalues currency
Venezuela stagflation persists, prices up 25 pct
Venezuela's Chavez threatens to oust Toyota
CARACAS, Jan 9 (Reuters) - Venezuelans rushed to the shops on Saturday, fearful of price rises after a currency devaluation that will let President Hugo Chavez boost government spending ahead of an election but feeds opposition charges of economic mismanagement.
In a bid to jump-start the recession-hit economy of South America's top oil exporter, Chavez on Friday announced a dual system for the fixed-rate bolivar.
It devalues the currency to 4.3 and 2.6 against the dollar, from a rate of 2.15 per dollar in place since 2005, giving the better rate for basic goods in an attempt to limit the impact of the measure on consumer prices.
The opposition seized on fears that prices for imported goods will double as shoppers formed lines of more than a hundred people outside some stores in the capital Caracas.
The socialist Chavez believes the state should have a weighty role in managing the economy. During his 11 years in office he has nationalized most heavy industry, and business and finance are tightly regulated.
"By establishing the exchange rate at 4.3 bolivars per dollar, the quality of life for Venezuelans is automatically devalued since we now have half the money we had before," said Caracas Mayor Antonio Ledezma, a Chavez opponent.
BLACKOUTS, WATER SHORTAGES
Opposition parties, emboldened by public dissatisfaction at frequent blackouts and water shortages and a 2.9 percent economic contraction in 2009, hope to strip Chavez of his legislative majority in September.
The devaluation is embarrassing for Chavez, who resisted calls from economists and many government allies to make the move last year when oil prices were at their lowest and elections a long way off.
Finance Minister Ali Rodriguez said the devaluation will add 3 percent to 5 percent to inflation, already the highest in the Americas at 25 percent last year.
"The popularity of the government is obviously going to be sharply and negatively affected," said economist Pedro Palma. "The inflationary impact of the measure diminishes the real income of people. People can consume less."
The new two-tiered exchange system offers the 2.6/dollar rate for goods deemed essential including food, medicine and industrial machinery. Other products, including cars and telephones, will be imported at the higher 4.3 rate.
Economist Pavel Gomez of the IESA economic school said the new system will increase opportunities for graft in a country that already is corruption-ridden.
"Multiple exchange schemes are incentives for corruption, more so if they are applied in the Venezuela way," he said. "Those who have good contacts can buy at 2.6 and sell at 4.3."
posted by no_slappz at 9:11 PM
4 Comments:
Hi there!
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For quite a long time, I earn money with the help of these programs.
I don't have problems with money now, but there are heights that must be conquered . I make 2G daily, and my first investment was 500 dollars only.
Right now, I'm very close at catching at last a guaranteed variant to make a sharp rise . Turn to my web site to get additional info.
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Chavez has become so desperate for an external problem, he's inventing American aircraft that fly into Venezuelan airspace.
Of course, even if the US military sent a plane over the border, so what?
Obviously Venezuela is not capable of shooting down invading aircraft. That alone should embarrass Chavez into keeping his trap shut.
Former Cubans tell me Castro runs drills in the schools where they claim that Americans are coming to harm them. Chavez emulates the old fraud.
Winfred,
As I have probably said, Cuba will become the site of a great real estate boom in the next decade.
Once Fidel is dead and Raul begins to lose his grip, the island will slide toward capitalism, though the path will be chaotic.
However, when that time comes, I am certain Cuban emigres in the US who re-assert themselves in Cuba will bring on an economic revolution that will send the communists running for cover.
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