Venezuelans Rush for TVs on Devaluation, Colgate Hit (Update1)

[WriteDown]

Source: Bloomberg

Jan. 12 (Bloomberg) -- Venezuelan consumers are rushing to buy flat screen televisions before prices jump, while U.S. companies including Colgate-Palmolive Co. brace for profit declines after President Hugo Chavez devalued the currency.

Shoppers picked through half-empty shelves at the Game-Zone electronics store in Caracas yesterday after a surge in demand drove up sales 70 percent over the weekend, said salesman Xavier Manrique. Colgate, the world’s largest toothpaste-maker, forecast a charge of up to 6 cents a share each quarter this year and Clorox Co., the biggest bleach maker, said it expects as much as $30 million in Venezuelan currency-related losses.

Chavez’s threats to seize businesses that raise prices following the first devaluation in five years may deepen shortages by making companies hesitate to restock, said Juan Pablo Fuentes, an economist at Moody’s Economy.com. He forecasts inflation could reach 60 percent, the highest since 1996 and more than double the government’s forecast.

“It’s going to be a tough year,” Fuentes said in a telephone interview from West Chester, Pennsylvania. “The devaluation has an immediate impact on consumers. You’re going to see a sharp contraction in consumption, which is the main driver for GDP.”

The government will “boost spending but it won’t be enough to compensate,” Fuentes said. “At first you’re going to see a lot of empty shelves. There’s a lot of uncertainty and some businesses will be afraid of putting the new merchandise on display since they don’t know what prices to use.’”......

Read more: http://www.bloomberg.com/apps/news?pid=20601109&sid=aVfjO7_6_NGc&pos=13

---

Looking good.

http://www.bloomberg.com/apps/data?pid=avimage&iid=iL_rjkDwefm8

[hedgehog]

1. How many typical Venuzualans are rushing out to buy flat screen televisions?

[notadmblnd]

2. exactly.

[WriteDown]

3. You obviously have not followed the vast wealth created by

Chavez for his citizens. Why do you choose to believe the propaganda that Venezuelans are poor?

[liberalmike27]

4. I don't believe anything our media says

About Hugo Chavez. I think the MIC is warming up a war, or some kind of action down the line.

He's just another media designated "demon-leader," with...ahem, OIL.

I continue to get a kick out of, and at the same time, feel a sadness, that our people are so blindly brainwashed as to the reasons we go to war. And the truth is, I'm not sure I see a way out of our quagmire, of corporatism run rampant. What do you do? Do you attack the super-rich, and show them their vulnerability? Who wants to do that? We on the left are peaceable, but they continue to do horrible things to the people, and continue the reduction of our country into a nice little wage-slave gravy, a third world dystopia. The plan is to further reduce the wealth of ordinary Americans, while continuing to pump up the guilty, the wealthy elite, hoping to achieve some kind of equanimity with third world countries so we can compete.

But do the prices go down, so our reduced public can own, or worse, rent a home, pay utilities, and buy the things we need to get to work? How fucking bad is it going to have to get? I don't see how this thing ends peacefully.

[WriteDown]

6. See post #5 for other media. nt

[enid602]

5. Baby Hugo

Baby Hugo closed down 100 chains (both supermarkets and other retail chains) today, as he felt they were gouging. I live in Bs As; everyone here is following this one closely in light of South America´s history of high inflation, and the preponderance of devaluations, currency control and other schemes that Latin American governments have tried in lieu of sensible, united monetary and fiscal policies. This is being covered on every channel; they´re saying inflation of 50% is expected this year in Venezuela.

[Igel]

9. That would be this, I guess.

http://news.yahoo.com/s/ap/20100112/ap_on_bi_ge/lt_venezuela_currency

[abelenkpe]

7. This coupled with what's

going on in Argentina could start tremors through the whole financial system. I hope I'm wrong though....just sounds pretty sketchy. I hope inflation doesn't reach 50 percent in Venezuela. That sounds like it would be really tough on people. Anyone living there with better knowledge of what's going on?

[social_critic]

11. Venezuelan Inflation

Official inflation has been running around 25 % to 30 %. The devaluation was so swift, it will probably drive inflation a bit towards say 35 %. If the government doesn't get its act together they could end up in big trouble, because they have evolved towards a semi-comunist system with a very large state sector. And this state sector is very inefficient, similar to what happened in the Soviet Union. I bet Venezuelans are going to be eating their cats and dogs, like the Cubans did, in a couple of years.

[Jester Messiah]

8. Well, nobody is making Colgate do business in Vz.

If it's going to cost them more than they earn to do business there due to this devaluation-but-no-price-rises bit, why not just close up shop?

[enid602]

10. depression

That´s exactly what happened in the Great Depression; all the countries of the world decided to devalue their currencies, and the result was a huge decline in commerce overall.

[social_critic]

12. I would close shop if I were Colgate

They COULD close up shop. That would likely unemploy a lot of people. And I suppose Chavez could teach them the benefits of brushing their teeth with sand and washing without soap. LOL.