How’s that socialist experiment working out for Venezuela?

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How’s that socialist experiment working out for Venezuela?

Not so well according to the latest news.

Venezuela on Friday released its first economic data in more than a year Friday, showing an economy in shambles and inflation at a historic high.

The Central Bank for the first time acknowledged what analysts have long said: That annualized inflation has surged into triple digits.

The bank said the economy contracted by 7.1 percent in the 12 months ending in September 2015, and inflation reached 141.5 percent.

Ahead of the surprise data release, President Nicolas Maduro said he would declare an economic emergency giving him 60 days to unilaterally enact sweeping reforms. The decree will be debated in the newly-seated opposition congress next week.   

The announcements came just hours before he was expected to deliver his annual state of the nation report.

Interest in the speech is high partly because it will be the first time in 17 years of socialist rule that a president delivers his annual remarks here to a congress controlled by the opposition.

Venezuela, which has the world’s largest oil reserves, has suffered enormously as the price of oil has crashed from above $90 a barrel two years ago to just $24 today. Analysts say that means Venezuela is getting dangerously close to just breaking even on the oil it produces, which accounts for 95 percent of export earnings.

The country’s newly appointed economic czar has written that “inflation doesn’t exist in real life.”

In its press release, the bank officials blame a widely-used website that tracks the black market rate of the Bolivar and other participants in an “economic war” for the soaring inflation rate.

Socialism only works when you have plenty of other people’s money to spend. In the case of Venezuela it was oil money, but right now the price of oil is dropping significantly.

A broken economy, lashed by the excesses of rampant socialism, will only get worse as the ability to derive income to pay for those excesses is eroded by market forces. When Socialism meets Capitalism it is capitalism that wins every time.

 

– Daily Mail


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.

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