Another Socialist country about to bite the dust
If a country had the world's largest oil reserves W&D would think that its economy would be pretty peachy. And that it would have massive international currency reserves.
Nuh. Another socialist economic experiment is about to bite the dust. Just when will the economy of Venezuela completely collapse?
Readers will recall that crack Marxist-Leninist throw-back, Hugo Chavez, who ruled the country for 15 years and mercifully died in 2013, trashed the economy. And the country. The usual socialist mix of privatisations: over-spending; price controls and corruption had the predictable ending.
This year, Venezuela looks like again winning the award for the most miserable country (measured by the sum of the inflation rate and the unemployment rate) with a score of about 160, 400% of the next most miserable country, Argentina. South Africa (32 points); Greece (28) and Ukraine (24) seem paradises by comparison.
The economy is beyond repair, it shrank by 4% last year and will shrink by 8% this year. Inflation (unofficial) is expected to hit 720% this year. Corruption is rife, crime is rampant.
Venezuela will die. It will be bankrupt this year. The reality is that the economy actually no longer exists, with most transactions now on the black market.
In the end, an economy dependent upon oil will fail. And when this one does, oil production may falter, which will push up the price of oil. Watch this space.