Venezuela’s dictator fires head of central bank; inflation at 1,600 percent


It started with the establishment of the welfare state, premised on the assurance that everyone can live at the expense of everyone else. Download bitstrips Chávez was voted into the presidency in 1998 and continued to stay in power by a citizenry temporarily enjoying the rise in their standard of living funded by oil revenues. Usd eur rate Chávez passed the baton to former taxi-driver Nicolas Maduro in 2013, who continued to believe that the welfare state could be maintained even as oil revenues on which it relied dropped.

As his government went into deficit, Maduro and his central banker, Merentes, borrowed, spent and created new money to keep the dream afloat.

Us stock market index At one point in late 2015, central banking printing presses couldn’t keep up with the demand for paper currency, and so officials ordered cargo planeloads of it to be shipped in from abroad.

As prices rose as a result of the infusion of new money into the economy, Maduro followed the disastrous historical pattern: price controls. Dollar inr rate today Those controls didn’t allow entrepreneurs to make a profit, so they stopped producing. Stock market futures cnn money The shortages were met by government rationing, along with attacks on capitalism as the cause.

In the summer of 2016, Maduro removed all pretenses by giving control of what was left of the food chain to his number one military commander, calling the move the Great Sovereign Supply Mission. Eur usd chart Once government controlled the food supply, it controlled the people. C program for binary search It also allowed those in the military the opportunity to overcharge for the food, engaging in graft of historic proportions.

The natives became restless, evidence by food riots, long lines of citizens waiting to buy whatever might be left on the shelves of grocery stores, and political pushback. Usd in cad Poltitcal opponents of the president thought there was enough left of the country’s constitution to vote Maduro out, but alas, it was too late. Understanding the futures market Maduro had replaced members of both the Supreme Court and the Electoral Council with his cronies. Usd eur exchange rate history He the began rounding up members of his opposition, many of whom then simply disappeared.

On January 8 Maduro announced a 50-percent hike in the minimum wage — the fifth such increase in the last year, in which it has been raised it by more than 400 percent. Definition of futures market That puts the minimum monthly salary at 40,683 bolivars, or about $12.

Eight days later Maduro, following a policy announced in December, scrapped the all-but-worthless 100 bolivar note, replacing it with new paper currency ranging from 500 bolivars (about 15 cents) to 20,000 bolivars (about $6). Python print format In making the announcement, the president repeated his charge that the new bills were necessary because of “price-gouging” by unscrupulous capitalists, the Mafia, and an economic war being waged on his country by the United States.

Since Maduro’s central banker hasn’t released any reports on the economy since late 2015, Reuters has to rely on the International Monetary Fund for its view. Silver price forecast 2020 The IMF, reported Reuters, estimates that Venezuela’s economy, which shrank 15 percent last year, will drop another 20 percent this year. Idr to usd calculator And inflation, which ravaged the currency last year by 800 percent, is expected to reach 1,600 percent in 2017. Gender differences in learning That would reduce the purchasing power of the new 20,000 bolivar note from the equivalent of six American dollars to just one. Eur usd rate forecast Put another way, a single arepa — a cheese-stuffed corn cake, which cost 1,000 bolivars a year ago (about $1) — will cost at least 4,000 bolivars (still about $1) in the new year.

Real remedies are scant in the media. Cad to usd chart Some, such as the New York Times, blame Maduro. Math jokes Others accuse Merentes, the former head of the country’s central bank. Usd xau After all, they say, he’s been overseeing his country’s economic and political destruction for the last 18 years, first as a politician, then as a professor, then as an advisor to first Chávez and then Maduro, and finally as the head of the central bank.

Some, such as Reuters, think the solution involves lifting the price controls, removing the food chain from the control of the country’s military, rolling back or eliminating altogether the hundreds of nationalizations the government has enforced, and so on. Stock meaning dictionary Others, such as the IMF, think Venezuela’s salvation lies with the institution of a “hard currency,” the lack of which has, according to that international central bank, “led to scarcity of intermediate goods and to widespread shortages of essential goods — including food — [which is] exacting a tragic toll. Usa today sports images Prices continue to spiral out of control.”

Still others, such as Forbes contributing editor Tim Worstall, think the solution is a replacement of the present central bank with another form of central banking.

No one is pointing at the institution of central banking itself and the hubris which drives it: the notion that mathematicians and politicians such as Merentes can run an economy. 1 usd to irr No one has noted the real foundational cause of Venezuela’s increasing misery: the Venezuelans themselves. Futures in the stock market Up until Maduro removed their ability to influence government by stacking the court and the electoral council with his cronies, Venezuelans had repeatedly reelected first Chávez and then Maduro.

If blame is to be placed anywhere, it must, finally and firmly, be on the citizens themselves. Usd to aed converter Once enjoying a rich, robust and replete welfare state, Venezuelans thought that state could continue forever just by reelecting those who inflicted it upon them in the first place. Current binary samsung official Few considered what would happen when, inevitably, the currency became worthless, options were eliminated, and the music stopped. Binary code destiny That lesson is now being taught to the hapless, helpless, and starving people of Venezuela.

An Ivy League graduate and former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at, primarily on economics and politics. Stock market trading hours central time He can be reached at This email address is being protected from spambots. Inr to usd conversion rate You need JavaScript enabled to view it..

Thank you for joining the discussion at The New American. Exchange rate hkd to usd We value our readers and encourage their participation, but in order to ensure a positive experience for our readership, we have a few guidelines for commenting on articles. Understanding binary If your post does not follow our policy, it will be deleted.

Please keep your comments on topic with the article. Euro today If you wish to comment on another subject, you may search for a relevant article and join or start a discussion there.

If our filtering system detects that you may have violated our policy, your comment will be placed in a queue for moderation. 100 usd to euro It will then be either approved or deleted. Euro to usd forecast Once your comment is approved, it will then be viewable on the discussion thread.