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Adventurer
Joined: 28 Jan 2006
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 Posted: Fri Jan 08, 2010 7:52 pm Post subject: Venezuela will slash value of currency, the bolivar |
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Venezuela will slash value of currency, the bolivar
Chavez said the devaluation would limit unnecessary imports
Venezuela's President Hugo Chavez has announced that the national currency, the bolivar, will be devalued for the first time since 2005 by at least 17%.
The bolivar, whose rate is set by government decree, will be devalued from its current rate of 2.15 to the US dollar to 2.60 for "priority" imports.
However, cars, chemicals, petrochemical and electronics will be charged at the higher rate.
President Chavez said that the two official rates would have the effect of "limiting imports that are not strictly necessary and stimulating export policy".
CHAVEZ |
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Gopher
Joined: 04 Jun 2005
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| Posted: Fri Jan 08, 2010 8:01 pm Post subject: |
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Being relatively weak on economics, I am not sure what this means.
What does this reveal re: the Chavez regime, Adventurer? |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Fri Jan 08, 2010 9:22 pm Post subject: |
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| Gopher wrote: |
Being relatively weak on economics, I am not sure what this means.
What does this reveal re: the Chavez regime, Adventurer? |
What does it mean? If the Venezuelan currency goes down relative to the dollar than it's more expensive to buy foreign goods and it means Venezuela gets more Bolivars for its exporting of oil. It makes me think of creating this illusion of getting more money than you're actually receiving. It would make imports more costly. That would be useful only if industries are fostered to produce cheaper goods in Venezuela that would substitute for the imported goods, which is what the Brazilians did.
They planned that by integrating various industries. I don't see any indication, yet, that Venezuelan is quite doing the same thing. Personally, that's what I would have done before devaluing the currency. Keeping a currency low is a way to reduce imports and to make your exports
more attractive. Some argue Korea did that when the won went down severely to deal with a strong dollar in relation to the won.
I think Chavez feels threatened by a weak dollar in relation to his bolivars. |
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Reggie
Joined: 21 Sep 2009
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| Posted: Fri Jan 08, 2010 9:40 pm Post subject: |
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| In South Korea's case, it was a great move. The weakening of the won came at a time when the yen strengthened and Korean exporters took a lot of market share from Japanese exporters. |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Fri Jan 08, 2010 9:52 pm Post subject: |
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| Reggie wrote: |
| In South Korea's case, it was a great move. The weakening of the won came at a time when the yen strengthened and Korean exporters took a lot of market share from Japanese exporters. |
Korea is a very industrialized country. I am not sure the same can be said about Venezuela. Chavez better know what he's doing. |
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Reggie
Joined: 21 Sep 2009
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| Posted: Fri Jan 08, 2010 11:05 pm Post subject: |
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| I doubt he knows what he's doing. He's probably as incompetent as our own socialist assclowns in Washington. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Sat Jan 09, 2010 6:21 am Post subject: |
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Well he's doing a good job in creating an even larger black market for the Bolivar.
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| Korea is a very industrialized country. I am not sure the same can be said about Venezuela. Chavez better know what he's doing. |
Venezuela produces nothing besides oil. He isn't doing this to improve the economy, he's doing it as a stop-gap measure to fight raging inflation. It isn't going to work though since most people that exchange Bolivars and dollars do it via the black market (since the the official rate before this change was BS to begin with). |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Sat Jan 09, 2010 6:26 am Post subject: |
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And speaking of Venezuela, a Venezuelan friend's FB status when she was there last month:
1. Venezuelan Government's christmas gift to the country: Financial crash that got all my mom's and many other venezuelans' life savings  sad very sad!
2. Now what? what else are we gonna expect from this government? controls and shortages in order!! hours in line to fill the tank of your car, daily blackouts and new regulations to ration electricity: business, malls, movie theaters, restaurants, bars, casinos, etc, basically everything goes off at 9 pm, exchange control ...making very difficult traveling abroad, and corruption everywhere more than ever before!!!!!
Sounds like things are going great in Chavez's Bolivar paradise. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Sun Jan 10, 2010 8:21 pm Post subject: |
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| Gopher wrote: |
Being relatively weak on economics, I am not sure what this means.
What does this reveal re: the Chavez regime, Adventurer? |
Through Chavez's prolific spending, he has acquired massive amounts of government debt. By halving the Bolivar, he has effectively stole half the wealth of all holders of Venezuela's currency and transfered said wealth to the government. All holders of Bolivars, most of them impoverished to begin with, have just lost half of there wealth by presidential fiat. This WSJ article puts even more perspective into the situation:
http://online.wsj.com/article/SB126305109903923235.html
Also, it looks as if Chavez wishes to control prices backed by the threat of military force. From the FT:
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�I want the national guard on the streets with the people to fight against speculation,� said Mr Ch�vez during his weekly television show, Alo Presidente. �Go ahead and speculate if you want, but we will take your business away and give it to the workers, to the people,� he said, stating that there was no reason for businesses to be raising prices.
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http://www.ft.com/cms/s/0/90dcf1ac-fd1b-11de-8952-00144feab49a.html?nclick_check=1 |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Jan 11, 2010 4:24 am Post subject: |
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The revolution just sped up! Businesses not allowed to raise prices. Instead, they will remove imported goods from their shelves. Then Hugo will deal with that.
Miami is about to get a housing stimulus. |
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Sergio Stefanuto
Joined: 14 May 2009
Location: UK
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| Posted: Fri Jan 22, 2010 10:44 pm Post subject: |
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Chile v Venezuela
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While Chile was being welcomed into the OECD, Chavez was busy devaluing Venezuela's bol�var fuerte.
Chile is ranked 10th in the 2010 Index of Economic Freedom, ahead of the UK. By these measurements, this makes it the most economically free country the South and Central America/Caribbean region.
Nestled in between Libya and Burma, Venezuela is judged to be the 174th most economically free country in the world, thus 28th out of the 29 countries in the South America/Caribbean region.
http://www.adamsmith.org/blog/international/chile-vs.-venezuela-201001234726/ |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat Jan 23, 2010 10:46 am Post subject: |
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Chavez seized a French owned supermarket chain that didn't behave as he liked.
http://news.bbc.co.uk/2/hi/americas/8464741.stm
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| Venezuelan leader Hugo Chavez has seized control of a foreign supermarket chain, Exito, after he accused the company of hiking its prices. |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Sat Jan 23, 2010 4:49 pm Post subject: |
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| Reggie wrote: |
| I doubt he knows what he's doing. He's probably as incompetent as our own socialist assclowns in Washington. |
It's not really about socialism versus capitalism. The problem is he is an incompetent leader. You can also have incompetent capitalists who can cause all kinds of problems, and that's something we've seen in the U.S.
Most economies are mixed economies. You need accountability. In Venezuela, there is very little accountability if any, and, in the US, I am not sure if the people feel Obama or whatever president is accountable due to the stranglehold corporations have over the country. In my opinion, Chavez is undemocratic, but we have our undemocratic forces to contend with.
Chavez reminds of Nasser of Egypt. He blindly applied socialism without understanding what he was doing. If you destroy all forms of competition, then you will also have huge economic problems.
Chavez should have focused on building industries with the oil revenues not nationalizing everything. |
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Gopher
Joined: 04 Jun 2005
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| Posted: Sat Jan 23, 2010 5:01 pm Post subject: |
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| Sergio Stefanuto wrote: |
Chile v Venezuela
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While Chile was being welcomed into the OECD, Chavez was busy devaluing Venezuela's bol�var fuerte.
Chile is ranked 10th in the 2010 Index of Economic Freedom, ahead of the UK. By these measurements, this makes it the most economically free country the South and Central America/Caribbean region.
Nestled in between Libya and Burma, Venezuela is judged to be the 174th most economically free country in the world, thus 28th out of the 29 countries in the South America/Caribbean region.
http://www.adamsmith.org/blog/international/chile-vs.-venezuela-201001234726/ |
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Nice comparison. I do not know whether you have been to Chile, or been there lately, but Santiago has leaped and bounded in the last ten years or so. The metro is spreading all over the city, and the stations are first-class, filled in some cases with excellent artwork. And the buses are no longer the psycho, screaming, dangerous buses but rather fewer and quieter. Universities are increasing and educating more and more Chileans.
Leftists hate "American foreign policy" and they especially hate the A. Pinochet dictatorship -- I am no friend of the latter. But post-Allende-Pinochet Chile -- the Chile that Pinochet and his American-advised pro-democracy, neoliberal policies created -- looks damn good these days, especially in the last two years or so. Might even be the most important South American country on the map today.
Makes me wonder how Iraq might look two or three decades hence... |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Sat Jan 23, 2010 5:37 pm Post subject: |
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| Gopher wrote: |
| Sergio Stefanuto wrote: |
Chile v Venezuela
| Quote: |
While Chile was being welcomed into the OECD, Chavez was busy devaluing Venezuela's bol�var fuerte.
Chile is ranked 10th in the 2010 Index of Economic Freedom, ahead of the UK. By these measurements, this makes it the most economically free country the South and Central America/Caribbean region.
Nestled in between Libya and Burma, Venezuela is judged to be the 174th most economically free country in the world, thus 28th out of the 29 countries in the South America/Caribbean region.
http://www.adamsmith.org/blog/international/chile-vs.-venezuela-201001234726/ |
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Nice comparison. I do not know whether you have been to Chile, or been there lately, but Santiago has leaped and bounded in the last ten years or so. The metro is spreading all over the city, and the stations are first-class, filled in some cases with excellent artwork. And the buses are no longer the psycho, screaming, dangerous buses but rather fewer and quieter. Universities are increasing and educating more and more Chileans.
Leftists hate "American foreign policy" and they especially hate the A. Pinochet dictatorship -- I am no friend of the latter. But post-Allende-Pinochet Chile -- the Chile that Pinochet and his American-advised pro-democracy, neoliberal policies created -- looks damn good these days, especially in the last two years or so. Might even be the most important South American country on the map today.
Makes me wonder how Iraq might look two or three decades hence... |
You have a point, Gopher, but Chile moved to the Left to some extent. As I said, most economies are mixed. It's the amount of mixture. I mean we could have had the situation of a Chile where there wasn't this investment in subways.
I mean you could say Norway and Sweden are Leftist, but they apply a lot of capitalist economic ideas and are prosperous. I don't think communism works, but I don't think extreme focus on the wealthy and bourgeoisie works, either.
The Dutch also have a good economy. The Brazilian economy has been rebounding in the past few years. Venezuela was in a mess before Chavez started his incompetent implementation of some kind of socialism. We have to be careful to say that the actions of one person means capitalism is bad or socialism is bad. |
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