Sunday, January 10, 2010

South America's Very Own Zimbabwe

The Venezuela of Hugo Chavez is in the early stages of a Mugabe-style economic revolution. Never underestimate the ability of a left-populist dictator to destroy a once thriving economy.
The consumer price index for Caracas posted a 28.6% year-on-year increase in November. Inflation for last year is expected to come in below the 31.9% level posted in 2008.

The country's entrenched inflationary problems, which economists blame on sputtering domestic production unable to meet consumer demand, are compounded by shrinking economic activity. The economy now faces declining activity and high inflation, the classic symptoms of stagflation.

The Venezuelan economy contracted 2.9% in 2009, confirming the country's first recession in five years, according to preliminary estimates published Dec. 29 by the Venezuelan central bank. _WSJ

Venezuela devalues currency

Venezuela on the verge of devastating electrical power collapse

Currency black market thriving in Caracas

24% of Venezuelans live in abject poverty

All your banks am belonging to us

Mr. Chavez is a social reformer, a believer in social justice -- just like Mugabe and Obama. If the policies of Chavez result in the same type of devastation for Venezuela as Mugabe has brought to Zimbabwe, surely it is just a coincidence?

Mr. Obama is maneuvering the US economy into the same landing approach pattern as his predecessors, Mugabe and Chavez. Zimbabwe has already landed ($1 trillion dollar bank notes etc). Several others are on the same approach. A soft landing cannot be guaranteed.

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