Venezuela prices up after new devaluation

[Judi Lynn]

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.

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

[social_critic]

1. Steep devaluations like this should not be used

if they didn't have the stiff currency controls they use, steep devaluations wouldn't be needed. When inflation is running at about 30 %, it makes more sense to devalue at about 0.5 % per week minimum, on a steady basis, thus allowing the market to function. Guys like Giordani who run the economy for Chavez are dummies. They have been behaving like dummies for a long time and continue to do so. And just wait until they eventually have to increase gasoline prices - it's just a matter of time until they have to do it. They have waited many years, and have failed to inform the population about the absurdity of the subsidies they have put in place. When they do have to raise prices the riots will be something to behold.

[naaman fletcher]

2. higher prices are good for workers

and indigenous peoples.

I guess.

[social_critic]

3. Venezuela delenda est.

What Chavez is doing to the economy is so wrongheaded, and hurts the poor so much, it is clear to me this regime has reached a state of madness.

Naaman, the indigenous peoples in Amazonas have already turned against the Chavez regime - they are voting for the PPT.

I haven't seen recent polls, but given the chaos in the country, the inflation, and the large numbers of invasions, theft, and robbery, it's evident the majority is now opposed to Chavez. Today I received an email from a Chavista friend who was quoting Yoani Sanchez, the Cuban bloggera, an email sent broadband to a lot of people. If Chavistas are starting to quote Sanchez, the pot has to be boiling. I sure hope they don't decide to use 350 and start a civil war.