Hugo Chavez's Inflation cure = cut off 3 zeros
#1
Posted 16 February 2007 - 11:18 PM
By Guillermo Parra-Bernal and Alex Kennedy
Feb. 16 (Bloomberg) -- Venezuela President Hugo Chavez's plan to curb inflation by lopping three zeros from the currency may backfire because the move fails to address production bottlenecks that are pushing prices higher, economists said.
The government will cut three zeros from the bolivar's exchange rate by February 2008, Chavez said last night in a televised speech, citing rising consumer prices. He also will cut the value-added tax rate and clamp down on ``speculators'' to halt last month's 4 percent increase in the cost of food.
The steps aimed at slowing inflation and boosting local output miss the root causes exacerbating imbalances in South America's third-biggest economy, according to economists at Goldman Sachs Group Inc. and Bear Stearns & Co. Flush with oil money and government spending, which jumped about 50 percent last year, economic growth and inflation are both surging.
``He has a funny understanding of the problem,'' Alberto Bernal, a Latin America economist with Bear Stearns & Co., said in an interview. ``Cutting a number of zeros from the bolivar is irrelevant in the end.''
Chavez, who won a third term in December, was granted decree powers last month by Congress in his drive to seize key industries and put the country on the path of socialism. The president said he plans in ``coming hours'' to decree a law that allows the government to expropriate any business that sells food products higher than government-set prices.
The annual inflation rate rose to 18.4 percent last month, the highest in Latin America, from 10.4 percent in May.
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BIGGEST SCIENCE SCANDAL EVER...Official records systematically 'adjusted'.
#2
Posted 17 February 2007 - 09:29 AM
In case anyone is interested, this is called Communism and not Socialism.The president said he plans in "coming hours'' to decree a law that allows the government to expropriate any business that sells food products higher than government-set prices.
And yes, this Marxist policy will fail to do "what was intended" as it has so many times before - and the people, not the dictator, will sadly suffer.
Fib
Better to ignore me than abhor me.
“Wise men don't need advice. Fools won't take it” - Benjamin Franklin
"Beware of false knowledge; it is more dangerous than ignorance" - George Bernard Shaw
Demagogue: A leader who makes use of popular prejudices, false claims and promises in order to gain power.
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#3
Posted 17 February 2007 - 10:55 AM
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#4
Posted 17 February 2007 - 11:01 AM
The US seems to be slipping into the same pit.Hugo is just dumber than a box of rocks and not evil or power mad.
I think of the eminent domain issue with private property being given to developers merely for the potential of increasing the tax base for local government.
Then there is the Presidential candidate who recently said "I want to take those profits..."
Hopefully there is a pendulum effect which will keep us centered over time...I hope.
Edited by Rogerdodger, 17 February 2007 - 11:04 AM.
BIGGEST SCIENCE SCANDAL EVER...Official records systematically 'adjusted'.
#5
Posted 17 February 2007 - 11:05 AM
#6
Posted 17 February 2007 - 01:03 PM
~ Johann Wolfgang Von Goethe ~
#7
Posted 17 February 2007 - 02:16 PM
You maybe confusing the terms "Nationalism", "Universalism", and that of "Fascism".Nazis ( National Socialists Party ) are the extreme right wing of the Socialists
"Nationalism" is when a collective group of people decree that all of its peoples live under one ideological social belief of being separate from all others and that all other cultures (and languages) are sub dominate to their way of life.
"Universalism" believes that these same cultures (and languages) should be the dominate doctrine of all others around them. This can range from left wing socialism to right wing (religious) conservatism.
"Fascism" is the enforcement of these same cultural differences on others who choose not to assimilate to such practices.
This is where education can make the difference between tyranny and freedom, and even then, humans are such gullible creatures that even those who are educated can be easily swayed if they're told long enough that they are wrong in their thinking and character.It was a sad day when people started cheering and supporting this clown, he's going to cause a lot of suffering and destroy a lot of lives before they realize that he was a fool not a hero.
Fib
Better to ignore me than abhor me.
“Wise men don't need advice. Fools won't take it” - Benjamin Franklin
"Beware of false knowledge; it is more dangerous than ignorance" - George Bernard Shaw
Demagogue: A leader who makes use of popular prejudices, false claims and promises in order to gain power.
Technical Watch Subscriptions
#8
Posted 17 February 2007 - 02:21 PM
Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"
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#9
Posted 17 February 2007 - 02:24 PM
Edited by Rogerdodger, 17 February 2007 - 02:26 PM.
BIGGEST SCIENCE SCANDAL EVER...Official records systematically 'adjusted'.