Venezuela prices up after new devaluation

[Judi Lynn]

Source: Energy Daily/UPI

Venezuela prices up after new devaluation
by Staff Writers
Caracas, Venezuela (UPI) Jan 3, 2010

Consumer prices soared in Venezuela as the government of President Hugo Chavez devalued the bolivar and the currency fell further against the U.S. dollar on traditional unofficial markets.

It was the second Venezuelan devaluation in 12 months and follows the second Central Bank annual report in the same period confirming the Latin American country's economy continues to shrink despite its oil wealth, international trade and recovery from severe drought last year.

The problem, analysts said, was that the effects of the economic contraction in 2009-10 was continuing and was complicated by further slow productivity in the past 12 months.

Venezuela is an OPEC member and pressed for higher crude oil prices when the oil group met in Ecuador last month.

Read more: http://www.energy-daily.com/reports/Venezuela_prices_up_after_new_devaluation_999.html

[virgogal]

1. "Poke" used to have another meaning too. :-)

[Statistical]

2. Almost every Latin American nation was in economic expansion in 2010.

Venezuela notably did not participate.

[COLGATE4]

3. Shhh. You'll bring down the wrath of the Chavez acolytes on your

head for citing 'facts'. You should understand that none of Venezuela's present woes are due to Fearless Leader's economic policies - it's all the CIA's fault.

[molly77]

4. What will you say when the US dollar is devalued?

Obama's fault? It is right around the corner.

[robcon]

5. The dollar floats - it's devalued and revalued every day.

The market decides, for example, the dollar to yen or dollar to euro or dollar to Canadian Dollar relationship.

Venezuela tries to have an official fixed valuation... which, of course causes a black market in dollars.

[Statistical]

6. What do you mean right around the corner?

The dollar is traded against every major (and many minor) currencies in the world. It is valued every single day.
Right this second 1 dollar will get you 0.7450 Euros. That is the value of the dollar.

You are aware Venezuela is experiencing 26% price inflation. Let me know when that is happening in the US. The only thing saving Venezuela is oil money. The oil exports bring in cold hard currency which helps to curb (if you can call 26% yoy inflation curbed) inflation. If Venezuela wasn't an oil exporter it would be the next Zimbabwe.

[COLGATE4]

7. Right on cue.