On Friday night, just as most Venezuelans were starting a long holiday weekend, the government of that country devalued the bolivar by over 30%. For a country like Venezuela that takes in enormous revenues from its oil production, a devaluation of that sort is nothing short of stunning. It is an acknowledgement that the Venezuelan economy is failing badly in the global economic competition.
Let's look at what devaluation means for the average Venezuelan. The bulk of the population holds its savings and its wealth in assets denominated in bolivars. That means that all of those people just saw over one third of their assets disappear in a moment's time. If they want to buy a new car imported into the Venezuelan workers' paradise created by Chavez and his party, those people will now have to come up with half again as much money for the same vehicle. If they want to buy an imported refrigerator or even imported clothing, the costs for those products just went through the roof. Locally produced products should still be priced the same, but within a matter of weeks or months, all of those prices will start rising to keep pace with the new value of the bolivar. In short, the devaluation of the bolivar by this great amount means many more Venezuelans have been moved into poverty and those already in poverty have been crushed.
Congratulations to the geniuses running the Venezuelan economy. Chavez has managed to take a prosperous country and turn it into a basket case in just a few short years.
Doesn't it make you feel good to know that president Obama is following many of the Chavez style policies?
Let's look at what devaluation means for the average Venezuelan. The bulk of the population holds its savings and its wealth in assets denominated in bolivars. That means that all of those people just saw over one third of their assets disappear in a moment's time. If they want to buy a new car imported into the Venezuelan workers' paradise created by Chavez and his party, those people will now have to come up with half again as much money for the same vehicle. If they want to buy an imported refrigerator or even imported clothing, the costs for those products just went through the roof. Locally produced products should still be priced the same, but within a matter of weeks or months, all of those prices will start rising to keep pace with the new value of the bolivar. In short, the devaluation of the bolivar by this great amount means many more Venezuelans have been moved into poverty and those already in poverty have been crushed.
Congratulations to the geniuses running the Venezuelan economy. Chavez has managed to take a prosperous country and turn it into a basket case in just a few short years.
Doesn't it make you feel good to know that president Obama is following many of the Chavez style policies?
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