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Venezuela’s Woes are Mounting as it turns the Lights Off

mbig

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The unbelievable Venezuela Death Spiral continues/accelerates.
Last one out, turn of the lights. Oh Wait!

Venezuela’s woes are mounting as it turns the lights off
http://www.cnbc.com/2016/04/28/venezuelas-woes-are-mounting-as-it-turns-the-lights-off.html
Luke Graham
28 Apr 2016
Venezuela's economic problems hit a new peak this week as rolling blackouts and a two-day working week were introduced to alleviate an energy crisis.

Venezuela's government announced earlier in the week that it was cutting public sector employees' working hours down to two days a week for at least two weeks in order to reduce electricity consumption.

The country's president, Nicolas Maduro, had already decided Venezuela's 2.8 million state workers would have Fridays off through April and May. Daily four-hour power cuts around the country were also planned to further save energy.

The plans are a response to a drought that has left the country's largest hydroelectric dam near its minimum operating level. But according to Michael Henderson, lead economist at risk consultancy Verisk Maplecroft, the plans indicate just how poorly the country is doing as a whole.

"Venezuela is in the Final throes of a downward social and economic spiral borne out of a legacy of terribly misguided policymaking....
[......]
 
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TheDemSocialist

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Venezuela needs to reform, but not reforms that move back to capitalism. The contradictions of Venezuela's "Bolivarian revolution" existing side by side with large capitalist economy is what we are seeing here. Also we have to factor in that the economy is dominated by oil with prices being incredibly low, and that in the past years as prices were high it gave room for Venezuela to develop under Chavez but at the same time they did not develop more of their economy and instead relied only on oil. They need to develop other parts of the economy such as ag.
 

joG

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joG

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Venezuela needs to reform, but not reforms that move back to capitalism. The contradictions of Venezuela's "Bolivarian revolution" existing side by side with large capitalist economy is what we are seeing here.

Gobbledygook capitalism. They need a equalizing but well structured redistribution of wealth and then a market driven economy with strict rule of law and a bare minimum of government economic activity restricted to public goods. That would be a fine experiment.
 

TheDemSocialist

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Gobbledygook capitalism. They need a equalizing but well structured redistribution of wealth and then a market driven economy with strict rule of law and a bare minimum of government economic activity restricted to public goods. That would be a fine experiment.

There is a market economy in Venezuela. Much of the economy is still based on the "market". True, there were many reforms brought about by Chavez that mitigated this market such as worker coops, nationalization of the oil etc. But there is still a large "market based" economy along side of the "socialized economy". Also before Chavez came to power there was essentially solely a market based economy with little wealth redistribution, and poverty was sky rocket high.
 

antiquity

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This what socialism/Communism gives its people. No toilet paper and no lights.
 

Carjosse

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Venezuela needs to reform, but not reforms that move back to capitalism. The contradictions of Venezuela's "Bolivarian revolution" existing side by side with large capitalist economy is what we are seeing here. Also we have to factor in that the economy is dominated by oil with prices being incredibly low, and that in the past years as prices were high it gave room for Venezuela to develop under Chavez but at the same time they did not develop more of their economy and instead relied only on oil. They need to develop other parts of the economy such as ag.

They do need to move back to capitalism, they need a market economy for goods. Government control of consumer goods always fails miserably as Venezuela has shown even when it was apparently doing well, they suffer from the same problems as the Soviet Union. Use their cheap resources to start a manufacturing goods industry, get something besides oil that can trade for other goods. Let the government control oil but it should be run to make a profit for the country. Unfortunately it looks like the country will have to collapse and wait for a new president for that to happen.
 

joG

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There is a market economy in Venezuela. Much of the economy is still based on the "market". True, there were many reforms brought about by Chavez that mitigated this market such as worker coops, nationalization of the oil etc. But there is still a large "market based" economy along side of the "socialized economy". Also before Chavez came to power there was essentially solely a market based economy with little wealth redistribution, and poverty was sky rocket high.

Not really. The tax and legal situations are such that costs and risks might allow individuals to make decisions. The problem is that the decision space government defined was such that most rational solutions were outside the allowed ie possible area.
 

mbig

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This what socialism/Communism gives its people. No toilet paper and no lights.
And I believe another New First by post-Chavez Vz.

Venezuela Doesn't Have Enough Money to Pay for Its Money - Bloomberg
Andrew Rosati
April 27, 2016

Venezuela’s epic shortages are nothing new at this point. No diapers or car parts or aspirin -- it’s all been well documented. But now the country is at risk of running out of money itself.

In a tale that highlights the chaos of unbridled inflation, Venezuela is scrambling to print new bills fast enough to keep up with the torrid pace of price increases. Most of the cash, like nearly everything else in the oil-exporting country, is imported. And with hard currency reserves sinking to critically low levels, the central bank is doling out payments so slowly to foreign providers that they are foregoing further business. Venezuela, in other words, is now so broke that it may not have enough money to pay for its money.
[......]
The story began last year when the government of President Nicolas Maduro tried to tamp down a growing currency shortfall. [......]Last month, De La Rue, the world’s largest currency maker, sent a letter to the central bank complaining that it was owed $71 million and would inform its shareholders if the money were not forthcoming. The letter was leaked to a Venezuelan news website and confirmed by Bloomberg News.

It’s an Unprecedented case in history that a country with such high inflation cannot get new bills,” said Jose Guerra, an opposition law maker and former director of economic research at the central bank. Late last year, the central bank ordered more than 10 billion bank notes, surpassing the 7.6 billion the U.S. Federal Reserve requested this year for an economy many times the size of Venezuela’s.

World’s Highest Inflation
The currency crisis sheds light on the magnitude of the country’s financial woes and its limited ability to remedy them as Oil -- the mainstay of its economy -- continues to flatline. Venezuela’s inflation, the world’s highest, is expected to rise this year to close to 500%, according to the International Monetary Fund.
[......]
 
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PIPEWRENCH

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But don't we need more government to micro-manage our lives. That way we can get down to a 2 day work week and everyone can be on the government gravy train.:lamo:lamo:lamo
 

notquiteright

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They do need to move back to capitalism, they need a market economy for goods. Government control of consumer goods always fails miserably as Venezuela has shown even when it was apparently doing well, they suffer from the same problems as the Soviet Union. Use their cheap resources to start a manufacturing goods industry, get something besides oil that can trade for other goods. Let the government control oil but it should be run to make a profit for the country. Unfortunately it looks like the country will have to collapse and wait for a new president for that to happen.

Like good ol Capitalist Alaska- adopted home of Sarah Palin???

Yes it seems Alaska is doing real well in a collapsing oil market... :roll:

Just saw where the Governor is considering an INCOME tax, reducing the socialist annual handout and taxing the oil industry... :shock:

Apparently the state budget is so bad no amount of cutting back gubmint services will save the day... :peace
 

Carjosse

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Like good ol Capitalist Alaska- adopted home of Sarah Palin???

Yes it seems Alaska is doing real well in a collapsing oil market... :roll:

Just saw where the Governor is considering an INCOME tax, reducing the socialist annual handout and taxing the oil industry... :shock:

Apparently the state budget is so bad no amount of cutting back gubmint services will save the day... :peace

Alaska and Venezuela are two completely different situations.
 

iguanaman

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Venezuela needs to reform, but not reforms that move back to capitalism. The contradictions of Venezuela's "Bolivarian revolution" existing side by side with large capitalist economy is what we are seeing here. Also we have to factor in that the economy is dominated by oil with prices being incredibly low, and that in the past years as prices were high it gave room for Venezuela to develop under Chavez but at the same time they did not develop more of their economy and instead relied only on oil. They need to develop other parts of the economy such as ag.

Isn't agriculture where collectives always fail? Farmers who lose their lands are not likely to bring good harvests especially when that harvest belongs to the State.
 

FreedomFromAll

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Venezuela needs to reform, but not reforms that move back to capitalism. The contradictions of Venezuela's "Bolivarian revolution" existing side by side with large capitalist economy is what we are seeing here. Also we have to factor in that the economy is dominated by oil with prices being incredibly low, and that in the past years as prices were high it gave room for Venezuela to develop under Chavez but at the same time they did not develop more of their economy and instead relied only on oil. They need to develop other parts of the economy such as ag.

Chavez's "Bolivarian revolution" was centered on making Chavez the sole ruler and had nothing to do with your pipe dreams. The "people" are not in control of Venezuela and havent been since a longtime before Chavez's rule. All that happened was that the government went from one bad dictatorship to another. The people always lose in such situations. And Venezuelans will continue to lose if they continue to listen to the false hope that the so called "Bolivarian revolution" offered.
 

jmotivator

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Alaska and Venezuela are two completely different situations.

Tell me about it. It's jaw dropping that anyone would try to compare them.

"Venezuela is out of food, money and toilet paper... b..b..but Alaska might institute an income tax!" :roll:
 

jmotivator

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Isn't agriculture where collectives always fail? Farmers who lose their lands are not likely to bring good harvests especially when that harvest belongs to the State.

I think farms fail because, on the whole, farming is the most difficult job in ANY economy. In any system that strives for equal rewards for everyone the farmer will always be the one screwed over, doing most of the work and seeing no benefit.
 

Carjosse

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Isn't agriculture where collectives always fail? Farmers who lose their lands are not likely to bring good harvests especially when that harvest belongs to the State.

That is another reason Venezuela's economy is failing because not only can they not buy toilet paper or food, they also can't buy fertilizer or seeds.
 

David_N

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That is another reason Venezuela's economy is failing because not only can they not buy toilet paper or food, they also can't buy fertilizer or seeds.

Venezuela is an example of what happens when a country destroys it supply/runs out businesses.
 

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Venezuela is an example of what happens when a country destroys it supply/runs out businesses.

They didn't run out of Supply David.

They defaulted on their debt and started printing and now their importers dont want to be paid with worthless bolivars.

And who said earlier in this thread that they SHOULDNT turn towards Capitalism ?

Lol !
 

Thrilla

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Venezuela needs to reform, but not reforms that move back to capitalism. The contradictions of Venezuela's "Bolivarian revolution" existing side by side with large capitalist economy is what we are seeing here. Also we have to factor in that the economy is dominated by oil with prices being incredibly low, and that in the past years as prices were high it gave room for Venezuela to develop under Chavez but at the same time they did not develop more of their economy and instead relied only on oil. They need to develop other parts of the economy such as ag.

:lamo

socialism ruining your country?... why, you need more socialism!
 

Fenton

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There is a market economy in Venezuela. Much of the economy is still based on the "market". True, there were many reforms brought about by Chavez that mitigated this market such as worker coops, nationalization of the oil etc. But there is still a large "market based" economy along side of the "socialized economy". Also before Chavez came to power there was essentially solely a market based economy with little wealth redistribution, and poverty was sky rocket high.

Chavez and his Socialist Central planners ran every industry they stole ( Nationalized ) into the ground, Oil included

Central planners operating on the tennants of Socialism and not Free markets do not a Market economy make.
 

Van Basten

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Another failed experiment by left wing, Latin American thugs. And by experiment, I mean scam.
 
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