September 3, 2007

WE OWE THEM A COUP:

Venezuela's currency plummets (Alex Kennedy and Matthew Walter, September 3, 2007, Bloomberg News)

The Venezuelan economy, under the direction of President Hugo Chávez, is starting to unravel in the currency market.

While Venezuela earns record proceeds from oil exports, consumers face shortages of meat, flour and cooking oil. Annual inflation has risen to 16 percent, the highest in Latin America, as Chávez tripled government spending in four years. [...]

The bolivar has tumbled 30 percent this year to 4,850 per dollar on the black market, the only place it trades freely because of government controls on foreign exchange. That compares with the official rate of 2,150 per dollar set in 2005. Chávez may have to devalue the bolivar to reduce the gap and increase oil proceeds, which make up half the government's revenue.

Posted by Orrin Judd at September 3, 2007 1:45 PM
Comments

Let's see whether they can engineer a gasoline shortage like Iran.

Posted by: Lou Gots at September 3, 2007 6:27 PM

"Let's see whether they can engineer a gasoline shortage like Iran."

They probably will as they export as much as humanly possible in order to bring in the currency needed to keep Chavez's imperial dreams alive. I predict that the price of oil will fall as Venezuala boosts as much production as possible. Which will hurt Iran, Russia, and other oil extraction economies.

Heh.

Posted by: Mikey [TypeKey Profile Page] at September 4, 2007 7:54 AM

Venezuela isn't an island; any bets on how long it takes before he starts constructing a wall?

Posted by: Mike Earl at September 4, 2007 10:02 AM

Heck, when the refugees start flowing, Tankredo & company will pay for the wall..

Posted by: oj at September 4, 2007 10:14 AM

What about the 1,700+ miles of coastline?

Posted by: erp at September 4, 2007 1:09 PM
« TOO PRO-SUNNI TO BE TAKEN SERIOUSLY AS PRO-SHI'A: | Main | HOW THE MIDDLE EAST GETS IT EXACTLY BACKWARDS: »