Very interesting discussion about inflation in Venezuela, dispelling myths about progressive governments supposed inefficiencies and exposing how the rich (and how countries like the US) purposefully sabotage the economies of progressive countries—with complete disregard for the harm this brings to the population (but, hey, theyre just externalities!). The consensus is Inflation is high in Venezuela primarily because of capital flight, and, although that takes place in very many forms, it is currently happening primarily by the rich exploiting the countrys fixed exchange rate for (enormous) profit, as the difference between the black market exchange rate and the official one is c. 12:1. The government estimates 30-40% of goods that are supposed to imported at the official exchange rate never are. The rich bribe customs officials, as its in their rational self-interest to do so, given they will incur such enormous return on exploiting this difference. What this means in practice is that the rich are (often purposefully) sabotaging the economy, and producing virtually nothing (sound familiar?). They are merely exchanging bolívares for dollars, trading those on the exchange black market, and then exchanging those dollars back for bolívares. In this way, it might also be noted that the US is indirectly facilitating this economic sabotage. But, hey, whats new? (Although both are pretty good, if you only watch one part, I recommend part 2 over part 1.) youtube/watch?v=GZkxTHF5H_c&feature=share
Posted on: Sat, 15 Mar 2014 04:59:39 +0000
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