Wednesday, January 14, 2015

Oncoming Orinoco orthosis...

"The tragedy is that what is playing out now in Venezuela has happened many times before. Those who do not learn from history are doomed to repeat it.....and nowhere is that more true than in Latin America."  Just been led (from a comment here) to this great blog Coppola Comment by Frances Coppola: earlier this month she wrote A Latin American tragedy.

Frances writes - linking to research - that the recurring problems (Peru, Chile etc in the past) tend to be a combination of factors that comprise four stages: the current tragedy being Venezuela of course, which is currently well into the 3rd Phase:
"There are pervasive shortages, inflation is over 65% and rising, and foreign reserves are declining sharply despite Venezuela's trade surplus. The budget deficit is currently at 17% and rising. The economy is demonetizing rapidly as more and more transactions are done on the black market. To make matters worse, the US government has imposed sanctions on Venezuela for suppressing dissent. So far, the government has resisted devaluation and subsidy cuts, but it cannot do so for much longer. Maduro - never as popular as his predecessor - is resorting to bribing the population with unsustainable fiscal expenditures, but this will only hasten the economic collapse that now appears inevitable. Venezuela is headed for default, hyperinflation, disorderly regime change and a wrenching fiscal adjustment. And the people who will suffer - indeed are already suffering - are the poor that Chavez and Maduro set out to help, just as the poor in Chile and Peru suffered."
Coo, coo...that's no pigeon.

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