Tuesday, December 31, 2013

Orinoco outflow II...

Milosevic, Mugabe and Maduro: 3M but not the Scotch tape or Post-it kind; the Malign Marxist Manifesto kind. The first two Communist followers had hyperinflation and survived in power; the latter Communist follower has very high inflation (not yet hyper?**) and is surviving, mainly through communication hegemony and legal government assisted looting to 'guarantee that everybody has a plasma television and the latest-generation fridge'. At present, the implied annual inflation rate is between 250 and 300% and [edit] between a fifth and a third of all products are not even available in the shops (yes, think about that). The World Bank "Doing Business" rankings for 2014 (online rankings, full report pdf file) puts Venezuela 181st out of 189, dismal, unbelievable and below the likes of Haiti, the aforementioned Zimbabwe and Afghanistan (164th).

** The "Hyperinflation or not?" row is interesting: Steve H. Hanke has his own reasoning and excepted definition but he also has those who disagree and cite other definitions. To me it seems a moot point as whatever the definition of hyperinflation, everyone agrees that Venezuela is in deep trouble and sinking fast:"So, don’t hold your breath waiting for an uprising in Venezuela because of high inflation and economic misery. Short of $50 per barrel oil, the Titanic called Venezuela might stay afloat for longer than you think, before it inevitably sinks". Certainly worth reading Steve H. Hanke, The Troubled Currencies Project, Cato Institute - Johns Hopkins University. Retrieved on 12/31/2013 from http://www.cato.org/research/troubled-currencies-project. (click on image).

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