Tag Archives: Venezuela

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Socialist government of Venezuela announces devaluation of their currency

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Are Barack Obama and Hugo Chavez very different?
Are Barack Obama and Hugo Chavez very different?

From the Boston Globe.

Excerpt:

Venezuela’s government announced Friday that it is devaluing the country’s currency, a long-anticipated change expected to push up prices in the heavily import-reliant economy.

Officials said the fixed exchange rate is changing from 4.30 bolivars to the dollar to 6.30 bolivars to the dollar.

So, if you are earning and saving Bolivars, you just got a massive cut to your earnings and savings.

More:

By boosting the bolivar value of Venezuela’s dollar-denominated oil sales, the change is expected to help ease a difficult budget outlook for the government, which has turned increasingly to borrowing to meet its spending obligations.

[…]Economist Jose Guerra told The Associated Press that given the devaluation, he predicts inflation of more than 25 percent this year.

The announcement of the devaluation came after the country’s Central Bank said annual inflation rose to 22.2 percent in January, up from 20.1 percent at the end of 2012.

The oil-exporting country, a member of OPEC, has consistently had Latin America’s highest officially acknowledged inflation rates in recent years. Spiraling prices have come amid worsening shortages of some foods.

[…]It was the fifth time that Chavez’s government has devalued the currency since establishing the currency exchange controls a decade ago in an attempt to combat capital flight.

[…]The government’s announcement drew strong criticism from opposition leader Henrique Capriles, who said that the government’s heavy spending was to blame for the situation and that officials were trying to slip the change past the public at the start of a long holiday weekend.

The opposition party explains why this is happening:

‘They spent the money on campaigning, corruption, gifts abroad!’’ Capriles said in one of several messages on his Twitter account. Capriles was defeated by Chavez in an October presidential vote that was preceded by a burst of heavy government spending.

Who else do we know who likes to spend money and borrow from future generations? Someone whose economic policies are similar to Chavez? Who could it be? Increasing inflation is a very attractive policy to socialists who want to spend more money without raising taxes. It’s a hidden tax on those who try earn more and save their money. It punishes independence and makes dependence on the government inevitable.

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Socialist Argentina follows-up runaway inflation with price controls on groceries

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Take a look at this article from the leftist Washington Post, which reports on how the socialists in Argentina have imposed price controls in order to minimize the impact of runaway inflation caused by money printing.

Excerpt:

Argentina announced a two-month price freeze on supermarket products Monday in an effort to stop spiraling inflation.

The price freeze applies to every product in all of the nation’s largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains. The companies’ trade group, representing 70 percent of the Argentine supermarket sector, reached the accord with Commerce Secretary Guillermo Moreno, the government’s news agency Telam reported.

[…]Economist Soledad Perez Duhalde of the abeceb.com consulting firm predicted on Monday that the price freeze will have only a very short term effect, and noted that similar moves in Argentina had failed to control inflation. Consumers shouldn’t be surprised if the supermarkets are slow to restock their shelves and offer fewer products for sale, she added.

A more effective way to contain inflation would be to “reduce government spending, which is financing an expansion of the money supply, and to have a credible price index.”

Isn’t ironic that the United States is pursuing the exact same policy of printing money and overspending as Argentina has? Excerpt we are a little further along.

So what happens next in Argentina? Zero Hedge explains:

What consumers will certainly do is scramble into local stores to take advantage of artificially-controlled prices knowing very well they have two short months to stock up on perishable goods at today’s prices, before the country’s inflation comes soaring back, only this time many of the local stores will not be around as their profit margins implode and as owners, especially of foreign-based chains, make the prudent decision to get out of Dodge while the getting’s good and before the next steps, including such measures as nationalization, in the escalation into a full out hyperinflationary collapse, are taken by Argentina’s female ruler.

[…]So to summarize: first capital controls, then a currency crisis, then expectations of sovereign default, then a rise in military tensions, and finally – price controls, after which all out chaos usually follows.

Study this sequence well: it is coming to every “developed” country near you in the months and years ahead.

Just to be clear, price controls are a clear signal to suppliers to stop supplying, since they cannot make any money if prices are held low by government decree. Price controls lead to shortages, necessarily.  And that’s what’s in store for Argentina once the private sector food suppliers (and other companies) pull out of there when they can’t make a profit. There are other places they need to be.

Imagine if America elected a charismatic, incompetent fool to run our country like socialist dictators do in Argentina or Venezuela. Imagine if the mainstream media, with their non-quantitative degrees and lack of real-world experience, covered for his every blunder. Where would we be then?

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Obama is skipping over half of his daily intelligence briefings (PDBs)

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From the liberal Washington Post:

President Obama is touting his foreign policy experience on the campaign trail, but startling new statistics suggest that national security has not necessarily been the personal priority the president makes it out to be. It turns out that more than half the time, the commander in chief does not attend his daily intelligence meeting.

The Government Accountability Institute, a new conservative investigative research organization, examined President Obama’s schedule from the day he took office until mid-June 2012, to see how often he attended his Presidential Daily Brief (PDB) — the meeting at which he is briefed on the most critical intelligence threats to the country. During his first 1,225 days in office, Obama attended his PDB just 536 times — or 43.8 percent of the time. During 2011 and the first half of 2012, his attendance became even less frequent — falling to just over 38 percent. By contrast, Obama’s predecessor, George W. Bush almost never missed his daily intelligence meeting.

I asked National Security Council spokesman Tommy Vietor about the findings, and whether there were any instances where the president attended the intelligence meeting that were not on his public schedule. Vietor did not dispute the numbers, but said the fact that the president, during a time of war, does not attend his daily intelligence meeting on a daily basis is “not particularly interesting or useful.”

Please see my previous post on Obama’s top 10 foreign policy failures.

Let’s review the most important one:

Failure #1: No Results In Slowing Or Stopping Iran’s Nuclear Weapons Program

Today, Iran is on the cusp of nuclear weapons capability. Such a capability in the hands of the world’s top terrorist sponsoring state poses the greatest threat facing the United States and our friends and allies, and it risks sparking a nuclear arms race across the Middle East.

Despite promising to “do everything in his power” to stop Iran, four years of President Obama’s irresolute policies have failed to slow the progress of Iran’s program. In fact, that progress has sped up:

  • Fastest Rate Of Enrichment Ever. In 2009, Iran’s enrichment rate of low-enriched uranium was 56 kilograms per month.  That jumped to 116 kilograms per month from November 2011 to February 2012. The enrichment rate now stands at 158 kilograms per month, the fastest rate ever.[1]
  • More Spinning Centrifuges. The total number of spinning centrifuges has gone from 3,936 to 10,477 during Obama’s term. The growth rate of spinning centrifuges went from 112 centrifuges per month before Obama came into office to 152 centrifuges per month during his term.[2]
  • Fordow Underground Enrichment Facility Nearing Completion. The fortified underground facility is 70 percent complete. The number of centrifuges installed has gone from 1,064 in May to 2,140 today. The facility’s limit is 3,000 centrifuges.[3]

The Iranian program has gotten to this point because President Obama has squandered all credibility with the ayatollahs:

  • A Failed Engagement Policy. President Obama offered the ayatollahs “no preconditions” talks, which were rebuffed. The latest round of multilateral talks has produced no results.
  • Refrained From Supporting The Green Movement. When asked during a press conference, President Obama shamefully refused to voice support for Iranian dissidents in 2009 as they were being killed in the streets, saying he did not want to “meddle” in Iran’s affairs.
  • A Weak Sanctions Policy. President Obama opposed and sought to water down crippling sanctions on Iran’s Central Bank until he was forced into them by Congress and our European partners.[4] He then undermined those sanctions by issuing waivers to 20 of the top importers of Iranian oil, including China.[5]
  • Abandoned Missile Defense. He abandoned a European missile defense system meant to protect against Iranian missiles.
  • Undermined The Credibility Of The Military Option. His administration has given the Iranians no reason to believe it is serious about a military option. The administration has repeatedly talked down the effectiveness and advisability of the military option, and seems to have devoted more energy toward preventing an Israeli strike on Iran than toward preventing an Iranian nuclear weapons capability. Obama officials leaked that the administration has focused its efforts on explaining to Israel “the dangers of an Israeli attack” on Iran and has attempted to “make the decision to attack as hard as possible for Israel.”[6] And the President himself, after boldly stating to AIPAC that the United States “has Israel’s back,” changed his tune two days later by saying his statement was “not a military doctrine.”

In the face of such irresolution, the ayatollahs are pressing forward toward nuclear weapons capability without fear of repercussion because they do not believe we are serious.

And now we know why. He’s played golf over a 100 times. He’s in over his head.