10-09-2018, 11:05 PM
*** 10-Oct-18 World View -- China aids Venezuela as inflation rate exceeds one million percent
This morning's key headlines from GenerationalDynamics.com
****
**** China aids Venezuela as inflation rate exceeds one million percent
****
![[Image: g171103b.jpg]](http://Media.GenerationalDynamics.com/ww2010/g171103b.jpg)
During his televised speech last year, Maduro grabs an empanada (a rich pastry) from his desk drawer when he thinks the cameras are off, while most of his people are starving (Caracas Chronicle)
In mid-August, Nicolás Maduro, president of the Socialist government
of Venezuela, announced a new package of economic reforms that were
supposed to stop the country's slide into economic disaster. ( "19-Aug-18 World View -- Socialist Venezuela introduces new fantasy currency and new Socialist changes"
)
At that time, Maduro said:
<QUOTE>"I want the country to recover and I have the
formula. Trust me."<END QUOTE>
To the surprise of few if any people, his "formula" has only
sped up the economic disaster.
The first part of Maduro's formula was to devalue the bolivar currency
by 96%, and then introduce a new currency, the Bolivar Soberano
("sovereign bolivar"). Well, that doesn't seem to have stopped
inflation.
There are no longer any official Venezuelan government figures on
inflation, because the figures were so embarrassing to the Socialists
there, they decided to stop publishing them three years ago. So the
opposition congress has been computing its own figures, and
publishing them.
According to opposition legislator Angel Alvarado, daily inflation is
now 4%, which comes to 1.7 million percent per year. During the past
year, prices rose a mere 488,865%, but the inflation rate continues to
accelerate.
On Tuesday, the International Monetary Fund (IMF) issued its own
estimate of Venezuela's inflation rate, saying that it would rise 1.4
million percent in 2018, and up to 10 million percent in 2019.
The second part of Maduro's magic formula was to raise the minimum
wage by 3000%. Maduro has raised the minimum wage 24 times since
2013. I always have to blink my eyes in disbelief when I read stuff
like this, since apparently Maduro and his Socialist acolytes are too
stupid to understand that when you increase wages then you increase
inflation proportionately. So that's one more reason why the
inflation rate increase has been accelerating.
But it's worse than that, in this case. Within a month it
was clear that the minimum wage increase was causing an additional
economic disaster: Few companies or shops were able to pay the
increased minimum wage, so massive numbers of people lost
their jobs.
In September, Maduro paid a visit to Xi Jinping in Beijing,
and apparently came back home to Caracas with a lifeline.
China agreed to invest an additional $5 billion, and the investment
would boost oil production, and nearly double its oil exports to
China. "We are taking the first steps into a new economic era," said
Maduro. Reuters and Reuters and Bloomberg (19-Sep) and Al Jazeera (19-Sep)
****
**** Venezuela migration crisis continues to grow
****
Some six million people have fled from Syria since the
war began in 2011, and that's currently the worst migration crisis
in the world. The second worst is the Venezuelan crisis, where
some 2.3 million Venezuelans have fled from the Socialist paradise.
Unable to feed their children or provide medicines for illnesses, or
running from violence, there are 4,000 more Venezuelans crossing the
border into Colombia each day. Colombia has called for a regional
response, saying the migrant crisis was costing it about 0.5% of GDP –
around $1.5m. Thousands travel on to Ecuador, Peru, Chile, Mexico,
Brazil, This has placed an enormous financial burder on neighboring
countries, and many have been closing their borders. The migrants are
willing to work for little pay, and so they take the jobs of each
country's citizens, further destabilizing the region. UNHCR and Guardian (London) and Merco Press and Fair Observer
Related Articles:
KEYS: Generational Dynamics, Venezuela, Hugo Chávez, Nicolás Maduro,
Angel Alvarado, International Monetary Fund, IMF,
Peru, Ecuador, Colombia, Chile, empanada
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
This morning's key headlines from GenerationalDynamics.com
- China aids Venezuela as inflation rate exceeds one million percent
- Venezuela migration crisis continues to grow
****
**** China aids Venezuela as inflation rate exceeds one million percent
****
During his televised speech last year, Maduro grabs an empanada (a rich pastry) from his desk drawer when he thinks the cameras are off, while most of his people are starving (Caracas Chronicle)
In mid-August, Nicolás Maduro, president of the Socialist government
of Venezuela, announced a new package of economic reforms that were
supposed to stop the country's slide into economic disaster. ( "19-Aug-18 World View -- Socialist Venezuela introduces new fantasy currency and new Socialist changes"
)
At that time, Maduro said:
<QUOTE>"I want the country to recover and I have the
formula. Trust me."<END QUOTE>
To the surprise of few if any people, his "formula" has only
sped up the economic disaster.
The first part of Maduro's formula was to devalue the bolivar currency
by 96%, and then introduce a new currency, the Bolivar Soberano
("sovereign bolivar"). Well, that doesn't seem to have stopped
inflation.
There are no longer any official Venezuelan government figures on
inflation, because the figures were so embarrassing to the Socialists
there, they decided to stop publishing them three years ago. So the
opposition congress has been computing its own figures, and
publishing them.
According to opposition legislator Angel Alvarado, daily inflation is
now 4%, which comes to 1.7 million percent per year. During the past
year, prices rose a mere 488,865%, but the inflation rate continues to
accelerate.
On Tuesday, the International Monetary Fund (IMF) issued its own
estimate of Venezuela's inflation rate, saying that it would rise 1.4
million percent in 2018, and up to 10 million percent in 2019.
The second part of Maduro's magic formula was to raise the minimum
wage by 3000%. Maduro has raised the minimum wage 24 times since
2013. I always have to blink my eyes in disbelief when I read stuff
like this, since apparently Maduro and his Socialist acolytes are too
stupid to understand that when you increase wages then you increase
inflation proportionately. So that's one more reason why the
inflation rate increase has been accelerating.
But it's worse than that, in this case. Within a month it
was clear that the minimum wage increase was causing an additional
economic disaster: Few companies or shops were able to pay the
increased minimum wage, so massive numbers of people lost
their jobs.
In September, Maduro paid a visit to Xi Jinping in Beijing,
and apparently came back home to Caracas with a lifeline.
China agreed to invest an additional $5 billion, and the investment
would boost oil production, and nearly double its oil exports to
China. "We are taking the first steps into a new economic era," said
Maduro. Reuters and Reuters and Bloomberg (19-Sep) and Al Jazeera (19-Sep)
****
**** Venezuela migration crisis continues to grow
****
Some six million people have fled from Syria since the
war began in 2011, and that's currently the worst migration crisis
in the world. The second worst is the Venezuelan crisis, where
some 2.3 million Venezuelans have fled from the Socialist paradise.
Unable to feed their children or provide medicines for illnesses, or
running from violence, there are 4,000 more Venezuelans crossing the
border into Colombia each day. Colombia has called for a regional
response, saying the migrant crisis was costing it about 0.5% of GDP –
around $1.5m. Thousands travel on to Ecuador, Peru, Chile, Mexico,
Brazil, This has placed an enormous financial burder on neighboring
countries, and many have been closing their borders. The migrants are
willing to work for little pay, and so they take the jobs of each
country's citizens, further destabilizing the region. UNHCR and Guardian (London) and Merco Press and Fair Observer
Related Articles:
- Socialist Venezuela introduces new fantasy currency and new Socialist changes (19-Aug-2018)
- Hugo Chávez dismantled Venezuela's businesses on purpose to create Socialist Paradise (29-May-2016)
- Colombia's president Ivan Duque takes office amidst accusations from Venezuela (12-Aug-2018)
- Socialist Venezuela's state-owned PDVSA oil company near total collapse (21-Apr-2018)
KEYS: Generational Dynamics, Venezuela, Hugo Chávez, Nicolás Maduro,
Angel Alvarado, International Monetary Fund, IMF,
Peru, Ecuador, Colombia, Chile, empanada
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
