Imagine, if you will, Hugo Chávez’s worst nightmare. The weapon he used to shake dollars out of the hated gringo, oil, is gone. Venezuelans cannot even get gas for their cars from their gas stations these days, and oil production has dropped to historic lows. The money is gone, too. Venezuela is under default and sanctions and can no longer pay its bills. Its foreign reserves have fallen below $10 billion. Chávez, before his death in 2013, ranted about the primacy of the dollar, even as he kept the dollars from Venezuela’s oil profits to himself and his cronies. Now, the people have the dollar – and they are using it to fight the failures of Chávez’s socialist regime.
This explains why the new phenomenon of dollarization now happening in Venezuela is actually a spark of light for a post-socialist future.
Dollarization happens whenever something goes very, very, very wrong with the local currency. In Venezuela, annual inflation today, on 12/27/17 is 3,920%. Monthly inflation is 36%, meaning the Venezuelan currency loses value pretty much by the hour. People carry bolivars, the local currency unit, around by the wheelbarrowful. What’s more, currency controls mean you can’t even get your own money out of the bank except in very limited amounts, the equivalent of about $8 a day at most.
You can’t do business like this. Nobody can, whether the grocer, the automobile dealer, the airline, the florist, the junk-peddler, the arepa-seller, or the pharmacist. The natural solution is to use U.S. dollars instead. Venezuelans are now doing this because dollars retain their value, are widely available even in currency-controlled Venezuela, and have the added benefit of being recognized internationally, meaning you can use them with no trouble if you get the heck out.
It’s something that happens to every country that prints money like toilet paper and renders its currency worthless
and unusable as a result. more here
Proof Positive socialism doesn’t work
This is a failure repeated often in the south and central american countries. They hate the gringo so easily follow a despot spouting anti US rhetoric. Then they collapse, usually with wholesale violence mingling with the despair. Briefly come to their senses until life stabilizes once again and the process is repeated.
It must be the hatred and resentment is a stronger impulse than a stable and comfortable life.
Socialism thins the herd to make more available for the so-called “leaders”!
http://www.meoso.com/wp-content/uploads/2016/09/city-socialism-hospital-socialism-politician-socialism.jpg
“It’s something that happens to every country that prints money like toilet paper and renders its currency worthless
and unusable as a result.”
Just like we are in the process of doing now.
Have never understood why socialism the world over creates such a compelling urge in people to want to subject themselves to it. Whenever you allow others to set the rules for you you’re in for trouble.
For this last week I’ve been reading that Maduro has been expelling diplomats from Canada and Brazil, causing those countries to retaliate, deepening Venezuela’s isolation.
I’m afraid Venezuela is a low hanging fruit that China or even Russia won’t hesitate to step in to “help”.
Val – I too believe that is exactly what the end game is all about.
How do they get dollars?
THAT is exactly what Obola tried to do to America – without the $Dollar fall-back.
THAT is exactly what HRC would have continued, if “elected.”
Americans proved that they’d had enough (at least enough to vote for someone different) and I just hope and pray that that wasn’t our last (as in final) election.
We must not delude ourselves: the National and Inter-National Socialists (through the “Deep State,” the Media, and Academia) are doing everything in their immense power to circumvent the will of the American people and return us to the path to perdition.
Venezuela should be an example to us all – but how often do you see it on the “news?”
izlamo delenda est …
@organgrinder The “free shit” nation is what draws them. When the free shit dries up they sit like babies until somebody else comes alone with another bag of free shit and the party starts again.
I know your question was rhetorical, but this kind of in your face failure of socialism is what “heats my beans”, given that Bernie Sanders has such a following of free shit idiots, one has to wonder if our turn is coming.
That pic looks just like downtown LA.
Socialism also doesn’t work because the people who think it’ll work “this time” are too stupid to find their @ss with both hands. They don’t know how to create and grow anything, only how to steal from productive people and destroy the economy. Eventually, as they say, they run out of other people’s money and have in the meantime destroyed the means by which people can make more. Like the demoncraps being hell bent on deporting all of our jobs to other countries, taxing the working class and companies that provide jobs way beyond prudence, giving our money away by the billions to dictators who want to kill us, while living it up like Caligula themselves.
Tim – The Øbamboozler said “If somebody wants to build a coal-fired power plant, they can. It’s just that it will bankrupt them,”. Then Hillary said “We’re going to put a lot of coal miners and coal companies out of business,” Meanwhile train-loads of our coal were being shipped to the west coast for transport to China… where of course it is burned without any pollutions controls whatsoever.
I firmly believe that the plan was to destroy and devaluate the coal industry in this country to pennies on the dollar, then sell it to the Chinese. Believe me, if there is energy in the ground someone is going to dig it up and use it!
Had the Hillbag won the election I truly believe that we would be seeing this and many other things in this country get sold off with the Clintons and their cronies becoming fabulously wealthy and powerful… just like any other greedy Socialist leader!
“Being ignorant is not so much a shame, as being unwilling to learn.”
― Benjamin Franklin
Bernie, Warren and the socialist/progressives place power above freedom, socialism gives them the spoils of power, while the populace is left to fend for themselves.
It’s history. Socialism and communism fails every time, the leaders end up with $Billions in graft and the citizens suffer.
@TRF, you make it sound like this group of Democrats actually strived to destroy this country!
And if you paid attention when Barky’s pet gorilla spewed her hatred for the USA, you might’ve already known.
@cato, until The People dust off the guillotines
@ Anonymous DECEMBER 28, 2017 AT 10:00 AM –
Oh don’t you worry about me. I’ve been paying attention all right. I’ve been sending up warning flares about Jeremiah Wright´s “God-Damn America”-hating, no-records, lying, denying, four-flushing, snake-licking, dirt-eating, inbred, overstuffed, ignorant, blood-sucking, dog-eating, brainless, dickless, purple-lipped, hopeless, heartless, bug eyed, jug-eared, incompetent, inexperienced, lazy, vacationing, golfing, partying, childish, naïve, wildly-spending, vindictive, arrogant, imperious, stumbling, stuttering, sarcastic, narcissistic, corrupt, stone-walling, out-of-touch, Gay-obsessed, sheet-grabbing, pillow-biting, ankle-grabbing, dope-smoking, pot-headed, two-bit, belly-aching, finger-pointing, Bush-blaming, Treasury-looting, economy-wrecking, healthcare-destroying, process-circumventing, Benghazi bullshitting, Constitution-stomping, autocratic, Bullgarian-speaking, productivity-obstructing, regulation-crazy, court-tampering, dictatorial, divisive, selfie-posing, taqiyah sunrise-drinking, Al-Qaeda appeasing, Iran, Muzlim Brotherhood, BLM, Black Panther-supporting, malicious, petty, fraudulent, lawless, mealy-mouthed, phoney-baloney, plastic-banana republic, radical Communist-Organizing Maladroit Marxist Muzlim Mallard since 2007.
“… failure of socialism ..?”
Really?
Venezuela is one MORE example of what socialism IS! It’s not a failure of socialism, it is perfected socialism!
Socialism is MEANT to destroy. It cannot do otherwise.
Even the socialists make no bones about that – it is only the rank-and-file slaves who are ignorant enough to believe in something-for-nothing and perpetual motion to implement such foolishness, only to enslave themselves and their progeny to concentration camps, poverty, misery, disease, and death.
Actually, socialism has never “failed” anywhere – it does exactly what it’s intended to do – enslave nations – spread misery – institutionalize corruption – separate God from humanity.
Outside of izlam, it is the most successful political system on Earth – wreaking hatred and despair across a wide swath of humanity.
izlamo delenda est …
@TRF, you and me both. ^5
Although there was a time that I doubted things could possibly turn around.
Hobo: 100%.
Every decade, we get a rocket scientist who gets the bright idea to plunge head first into the shallow pool of “emerging markets”.
Brazil, Argentina, etc. They are always emerging from a self-imposed submerging.
The South America Yo-Yo…
Venezuela’s “GoFundMe” page has generated a whopping 57 céntimos since April. 🙂
Venezuela had built some oil refineries on Aruba about 10 yrs ago or so.
I wonder what has happened to those?
Aruba used to make lots of money from Venezuelans.
A lot of them would go there to work in the tourist industry.
I think I’ll see what I can find about how things are going between them.
Apparently, the government of Aruba bought the oil refinery in the summer of 2016 because it was sitting idle. They are now leasing it to Citgo.
As for the Venezuelans who used to go to Aruba as tourists, here’s a clip from a NYT article about them:
“The small Caribbean islands neighboring Venezuela are far less hospitable, saying they simply cannot absorb the onslaught. The closest to Venezuela’s coast, Aruba and Curaçao, have effectively sealed their borders to poor Venezuelans since last year by making them show $1,000 in cash before entering — the equivalent of more than five years of earnings in a minimum-wage job.
Both countries have increased patrols and deportations, and Aruba has even set aside a stadium to hold as many as 500 Venezuelan migrants after they are caught, according to the authorities.
It’s a dramatic reversal of fortune for Venezuelans, who once went to Curaçao to spend money as tourists, not to plead for work.”
Venezuela has a lot more room to slide before it hits bottom.
Informal dollarization is of no benefit to those who do not earn dollars. Venezuelan dollarization exists only within the entitled class, as they are the only ones with access to dollars. Maduro is pushing the adoption of an unbacked electronic currency, something attempted by Correa in Ecuador, and still quietly and persistently being pushed by his successor, Moreno.
Hard-core Socialists do not accept the notion of currency as we know it. When the State controls all aspects of the economy, there is no need for a tradeable currency. The State sets the value of the currency and it sets all prices, wages and salaries. International trade is done on the barter system and with whatever foreign currency reserves as are available.
The system breaks down when domestic production falls below demand (or necessity) and imports are required, but you have nothing the world wants to trade for.
Maduro would happily trash the entitled class before he would ever even contemplate leaving power.
Venezuela’s reduction in oil production is due to corruption and inefficiency within the national oil company, PdVSA (which owns CITGO). China would like to capitalize on it, but they have a reputation for forcing extremely unfavorable long-term contracts, often based on equally unfavorable loans that are tied to purchase of inferior or entirely useless Chinese products and services.
PdVSA has contracted with foreign firms, like Schlumberger or Halliburton, but failure to pay for services is an ongoing problem and Maduro’s paranoia of foreign influence creates a volatile security environment.
@organgrinder December 28, 2017 at 8:49 am
> Have never understood why socialism the world over creates such a compelling urge in people to want to subject themselves to it. Whenever you allow others to set the rules for you you’re in for trouble.
When someone already claims to own you, and someone else offers to cancel “your” contract — all you have to do is a little killing, of the people that claim to own you — some people ask “What have I got to lose?”. When the answer is “nothing,” there really is no downside. Even if there is no temporal upside, there is still a spiritual one (some may disagree — what if we call it a “high” instead of an “upside”?). Wash or win, it’s one day without someone else’s yoke.
Tim is right. With all four branches* of Socialism, failure is not a bug, it’s a feature.
*American-style Progressivism, National Socialism (current Venezuela and WW2 Germany), Fascism (Italy, mid-1900’s Spain), Communism (Soviet, Chinese, Cuban, NoKo, etc)