Posted on 01/17/2010 5:34:44 AM PST by La Lydia
A lot has been written about the economic impact of the maxi-devaluation announced Friday by Venezuela's authoritarian-populist President Hugo Chavez. But the measure's political impact may be just as important, if not more. With his drastic devaluation of the Venezuelan currency, Chavez can transform the dollars his government gets from oil exports into twice as many bolivares, the local currency.
Once converted, the Chavez government's oil export income will increase from 47 billion to 94 billion bolivares, which it will be able to spend in social programs before September's crucial congressional election...
But in the long run, this is a financial gimmick that -- without measures to re-invest in Venezuela's crippling oil industry infrastructure or address the government's economic mismanagement -- will sink the economy even further.
Venezuelan opposition leaders told me...they don't believe the devaluation will help Chavez in the congressional vote, among other things because the local currency will be eaten up by galloping inflation...
Caracas Mayor Antonio Ledezma, a leading opposition figure, told me that Chavez's political future will be threatened by Venezuela's growing electricity cuts, increasing water shortages, massive corruption and rising crime rates...."This government wants to make the country poorer so that a depressed society ends up exchanging a promising tomorrow for crumbs today."...
...given sound economic management, devaluations can be handled without causing hyper-inflation. But Venezuela imports virtually everything its consumes, including most of its food, which will drive importers to increase prices and further drive inflation...
If things go his way, he could win the September elections, and then, when the lights finally go out in Venezuela, he will try to pull his usual trick -- blaming the U.S. "empire" for the total destruction of the country's economy and growing poverty rates.
(Excerpt) Read more at mcclatchydc.com ...
What he is doing makes perfect sense, if you are a liberal, totally clueless about the laws of cause and effect as it pertains to the economy.
He has no choice but to grow the oppression up to the point where he must abandon all pretense of democracy and abandon all but his decree as law.
The only recourse is to kill him ASAP.
Thing is, he’s a dictator, and dictators don’t really care about their “stock.”
That is so sary, exactly what Rush, Bexck, etc. say about Chavez wannabe Obama.
Pretense?
Communism strikes again, spreading misery and poverty equally amongst the people.
.”This government wants to make the country poorer so that a depressed society ends up exchanging a promising tomorrow for crumbs today.”...
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That’s quite a statement there.
Wonder if Barry keeps a pix of Hugo in his wallet ?
Leftists are reliant on shortages and rationing for their power, so they often advocate policies that will cause it, such as in our own case, Cap and Trade, and the refusal to allow any new energy infrastructure that might possibly create abundance, to be built.
This can become monstrous, such as in old East Germany, where even music and color were rationed, to be used only to honor the state, which left their decaying nation a place of asphalt and concrete, ugly off white, black and gray.
Shortage, rationing, scarcity and deprivation are tools of state power to socialists. All good must flow from the state, at the pleasure of the state. The elites, of course, are exempt from such limits, and are even encouraged to indulge and waste, like Al Gore.
However, as with all such short sighted and vicious thought, they never think these things through, which is why eventually the people rise up against their self-appointed “masters”.
Hopefully, in the case of Chavez, even if his Cuban bodyguard kill some Venezuelans in the process, the Cubans and he will get to decorate some festive poles while getting a final bit of crowd approval in the streets of Caracas.
” He has no choice but to grow the oppression up to the point where he must abandon all pretense of democracy and abandon all but his decree as law.”
You mean Obama?
Can somebody explain to me why the mayor of Caracas talking about the United States? He understands the marxists perfectly.
British spelling vs US "pretence"
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