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Venezuela Runs Out of Beer

PoS

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Venezuela Runs Out of Beer - Hit & Run : Reason.com

Venezuela's largest privately-owned beer company has stopped producing beer after running out of malted barley (or, more specifically, running out of foreign currency with which to buy malted barley).

The company, Empresas Polar, stopped production yesterday—it warned last week that it would run out of malted barley by then.

Beer now joins a long list of products and food that there have been shortages of in socialist Venezuela since the price of oil went down and the country's government did nothing to loosen its grip on the economy.

In Venezuela, there have been shortages of: Batteries, beef, birth control pills, bleach, brass, bread, breast implants, butter, cheese, chicken, chocolate, clothes iron, coffee, coffins, condensed milk, condoms, corn oil, deodorant, detergents, diapers, eggs, fabric softeners, fish, flour, French fries, fruits, gauze, hops, ice cream, insecticide, jams, juice, lentils, margarine, Marie biscuits, makeup, mayonnaise, medical gloves, milk, mouthwash, mustard, napkins, oatmeal, olives, pan de jamón, pasta, peas, pork, powdered milk, raisins, razors, rice, sanitary napkins, sacramental bread, sardines, satin, shampoo, shoes, skim milk, soap, sodas, sugar, sunflower oil, tires, toilet paper, toothbrushes, toothpaste, varnish, vegetables, water, wine, and more.

Perhaps they should hire MMT advocates to print mountains of cash for them to buy barley. ;)
 

imagep

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If they can find anyone that will lend them the money to buy paper to print on....

MMT advocates tend to be capitalist, not communists. The problem in Venezuela is due to communism/socialism.
 

Goshin

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Uh oh. NOW they're in for it. Revolution looms as the population sobers...
 

joG

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MMT advocates tend to be capitalist, not communists. The problem in Venezuela is due to communism/socialism.

Whereby socialist governments are also prone to over spend and print money to pay for part of it.
 

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Whereby socialist governments are also prone to over spend and print money to pay for part of it.

Socialist countries destroy their supply. I'm talking about Venezuela.
 

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MMT advocates tend to be capitalist, not communists. The problem in Venezuela is due to communism/socialism.

That is not intuitive. The capitalists I know are against the concept of government spending money they don't have. You must know different capitalists than I.
 

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That is not intuitive. The capitalists I know are against the concept of government spending money they don't have. You must know different capitalists than I.
government spending money they don't have.
This is where you need to understand money creation. A government has to spend more then it taxes overall, if it is a currency issuer. Otherwise, how will people have any money? I mean, banks create money when they loan, but that comes with a liability.
 

David_N

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Maybe they need to fly helicopters overhead and drop piles of money on people to increase demand and save the country.

That'd be useless since Venezuela is collapsing due to an energy crisis, bad policies/being a SOCIALIST COUNTRY. Hell, they don't have a problem of low demand, they have a supply problem.
 

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This is where you need to understand money creation. A government has to spend more then it taxes overall, if it is a currency issuer. Otherwise, how will people have any money? I mean, banks create money when they loan, but that comes with a liability.

no banks do not create money when they loan.
a loan is nothing more than a fund transfer from
the bank to the person. it doesn't create anything it simply transfers what is there
to someone else.

Do Banks Create Money from Thin Air? - New Economic PerspectivesNew Economic Perspectives
 

ludin

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That'd be useless since Venezuela is collapsing due to an energy crisis, bad policies/being a SOCIALIST COUNTRY. Hell, they don't have a problem of low demand, they have a supply problem.

they can just spend their way out of it. they issue their own currency. the government just prints all the money they need
and give it to everyone they want. problem solved.

isn't that mmt'ers constantly spout? just print it no consequences at all.
 

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no banks do not create money when they loan.
a loan is nothing more than a fund transfer from
the bank to the person. it doesn't create anything it simply transfers what is there
to someone else.

Do Banks Create Money from Thin Air? - New Economic PerspectivesNew Economic Perspectives
You're joking, right?
Hell, that NEP page doesn't even disagree, the author takes an issue with the fact that a bank loan doesn't create an immediate asset, which is true. A bank loan comes with an asset for the bank, the promissory note, and a liability for the person receiving the loan.
Read:
http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf
It's also common sense, when examining bank assets/liabilities.
No one disagrees with this either:
A bank cannot simply manufacture its own payment assets from thin air.
 
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David_N

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they can just spend their way out of it. they issue their own currency. the government just prints all the money they need
and give it to everyone they want. problem solved.

isn't that mmt'ers constantly spout? just print it no consequences at all.

No, they can't spend their way out of a energy crisis/supply problem.
No MMTER ever says that "printing" has no consequences.
 

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faithful_servant

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That'd be useless since Venezuela is collapsing due to an energy crisis, bad policies/being a SOCIALIST COUNTRY. Hell, they don't have a problem of low demand, they have a supply problem.

The supply is there, the demand is there, what isn't there is money in the hands of the people who put the two together. Did that money just evaporate into thin air?? Nope, it got gutted in value by the same kind of "helicopter" policies that YOU have supported. Money controlled by the people means economic growth, money controlled by the gov't means economic death. More money in the hands of both the demand and supply side of the equation (and not just in the politically expedient demand side) drives growth. Venezuela tried to put lots of money into the demand side by giving them lots of free stuff and as a result they strangled the value of their money and cut off the ability of the supply side to meet the demand.
 

PoS

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That'd be useless since Venezuela is collapsing due to an energy crisis, bad policies/being a SOCIALIST COUNTRY. Hell, they don't have a problem of low demand, they have a supply problem.

Venezuela has a supply problem because they dont have any money with which to spend with. Since MMTers believe that a government cannot go bankrupt why dont you suggest that they start printing mountains of cash then?
 

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The supply is there, the demand is there, what isn't there is money in the hands of the people who put the two together. Did that money just evaporate into thin air?? Nope, it got gutted in value by the same kind of "helicopter" policies that YOU have supported. Money controlled by the people means economic growth, money controlled by the gov't means economic death. More money in the hands of both the demand and supply side of the equation (and not just in the politically expedient demand side) drives growth. Venezuela tried to put lots of money into the demand side by giving them lots of free stuff and as a result they strangled the value of their money and cut off the ability of the supply side to meet the demand.

The supply isn't there though. Why do you think they have a crisis with basic goods? The demand is there, most definitely, people desperately need basic goods to survive. They can't get them though. Socialist countries fail.
Did that money just evaporate into thin air??
Huh? Venezuela was doomed the moment it adopted socialism and relied on hydroelectric power/oil, based on what we see now.
Nope, it got gutted in value by the same kind of "helicopter" policies that YOU have supported.
Deflation wouldn't have fixed anything in Venezuela, just like Rapid Inflation isn't fixing anything. Why? Because Venezuela is a strange animal, and before you continue with your silly argument, no one on here has ever argued that a government should continue to deficit spend when demand is through the roof with limited supply/a energy crisis.
Money controlled by the people means economic growth
Huh, that's funny, because the only source of net financial assets for the private sector is GOVERNMENT SPENDING. That, or the private sector continues to go into debt year after year forever. That's what a balanced budget is by the way, and with a trade deficit, it'd be devastating. But that's another discussion.
money controlled by the gov't means economic death.
Hm, that's funny, because in all countries I'm aware of, the government does control the money.
More money in the hands of both the demand and supply side of the equation
Sales drive business, and sales come from demand. Are business owners in America/australia/etc facing a supply shortage? No, it's a lack of demand holding growth back. Unfortunately, unless governments decide to spend instead of focusing on austerity, credit growth will drive growth, and when it falls, a recession will hit us. Private sector debt increasing year after year, only to be made worse with a trade deficit + a balanced budget. Imagine if we actually tried to extinguish the national debt.. It'd be a disaster, destroying the economy.
Venezuela tried to put lots of money into the demand side by giving them lots of free stuff
Venezuela decimated business and built its economy on oil/imports for other goods, unless I'm mistaken, which is why They're in trouble. Venezuela also pegged to the dollar, unless I'm mistaken.
 

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Venezuela has a supply problem because they dont have any money with which to spend with. Since MMTers believe that a government cannot go bankrupt why dont you suggest that they start printing mountains of cash then?

Venezuela has a supply problem because they dont have any money with which to spend with.
Venezuela has a supply problem for a variety of reasons.
1.) They're socialist and rely on oil, which fell. They also are going through an energy crisis when it comes to powering their country. They also decimated businesses and a whole host of other socialist nonsense.
Since MMTers believe that a government cannot go bankrupt
A currency issuer that has debt denominated in that currency cannot go bankrupt, unless they choose to. That is simply a fact. Venezuela is a disaster due to what I've already laid out, including price controls, etc.. What would more spending due to help them when they have nothing to buy with the money? You need to understand MMT before you and others continue to spread stupid nonsense.
 

Dittohead not!

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You're joking, right?
Hell, that NEP page doesn't even disagree, the author takes an issue with the fact that a bank loan doesn't create an immediate asset, which is true. A bank loan comes with an asset for the bank, the promissory note, and a liability for the person receiving the loan.
Read:
http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf
It's also common sense, when examining bank assets/liabilities.
No one disagrees with this either:

so what you said was incorrect banks can't make money out of thin air.
 

David_N

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so what you said was incorrect banks can't make money out of thin air.
Well, depends on how you define money. For all practical purposes, banks do "create money."
http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf
When a bank loans, it creates a deposit in the borrower's bank account. Banks don't have enough assets to cover all of their liabilities, from what I've seen, so it's absurd to claim that banks can't create money. Anyways, I do agree with the NEP author in that bank created money is endogenous, and comes with a liability, and that the private sector can't go on year after year in debt. What's funny is, NEP is a MMT website, and the author, among others, understands that government deficit spending is needed to ensure that the private sector can acquire net financial assets and not collapse in on its self. Thank god you agree!
 

ludin

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Well, depends on how you define money. For all practical purposes, banks do "create money."
http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf
When a bank loans, it creates a deposit in the borrower's bank account. Banks don't have enough assets to cover all of their liabilities, from what I've seen, so it's absurd to claim that banks can't create money. Anyways, I do agree with the NEP author in that bank created money is endogenous, and comes with a liability, and that the private sector can't go on year after year in debt. What's funny is, NEP is a MMT website, and the author, among others, understands that government deficit spending is needed to ensure that the private sector can acquire net financial assets and not collapse in on its self. Thank god you agree!

they don't create money.

it is a loan that they give the person from their banking liabilities fund. it becomes an asset to the person and a liability to the bank.
nope I didn't agree and even the site explains that it isn't what you think which was the whole point.

that is why you have been backtracking on this left and right.
they can just print all the money they want to pay for whatever it is they need
and there is no consequences for doing so.
 
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