Despite the government’s crackdown on political opponents, the Venezuela economy is going to win.
If you’re wondering how bad a financial collapse might get, take a look at the Venezuela economy. Yes, the United States is not the same, but we are the greatest debtor nation in world history. What we see in Venezuela is a government desperate to hold onto power and a financial collapse that may end that regime despite all their efforts to suppress dissent.
Saying “It can’t happen here” is stupid.
The Washington Post reports, “In Venezuela, the economy may yet do what the opposition couldn’t.”
New estimates from the large Venezuelan data firm Ecoanalítica suggest that the economy could shrink 10.4 percent this year, exacerbating a four-year nosedive that some economists already call worse than the United States’ Great Depression. Potentially more dangerous, analysts say, is the prospect of a sovereign debt crisis that could bring the country to a whole new level of economic pain.[…]
“It was after the vote that things went out of control,” said Miguel Gonzalez, a 94-year-old retiree in sticker shock this past week while shopping at a Caracas grocery store. In only a few days, he noted, the price of white cheese had jumped 21 percent, while stewing meat surged 31 percent. Like many other shoppers, he had a near-empty cart.
The government normally adjusts pensions and the minimum wage to compensate for inflation. But in a possible sign of empty coffers, it hasn’t done that yet. As anxious Venezuelans bought up U.S. dollars in the week after the vote, the local currency depreciated 45 percent against the dollar. In the past week, the bolívar clawed back lost ground — but price increases on the street remained in place.
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