Last day filling in for Fausta.
Still waiting for Former President Obama, actors Danny Glover and Sean Penn or director Oliver Stone to comment on the downfall of Venezuela. Breath not being held.
Venezuela’s currency, the bolivar, is disintegrating at an incredible pace under the country’s political and economic crisis that has left citizens broke, desperate and in many cases, homicidal. The depreciation accelerated this week, after a disputed vote electing an all-powerful “Constituent Assembly” filled with allies of President Nicolas Maduro, which the opposition and dozens of countries have called illegitimate.
Just two days ago, on August 2, we reported that one dollar would buy 14,100 bolivars, up from 11,280 the day before.
The next day, the bolivar slumped nearly 15 percent on the black market, to 17,000 to one US dollar. Today, it has crashed again, tumbling 16% to 20,142, and down almost 40% in just the past three days.
A kilo (two pounds) of rice, for instance, cost 17,000 bolivares. The crisis biting into Venezuela since 2014 came from a slide in the global prices for oil [sic]– exports of which account for 96 percent of its revenues.
The government has sought to monopolize dollars in the country through strict currency controls that have been in place for the past 14 years. Access to them have become restricted for the private sector, with the consequence that food, medicines and basic items — all imported — have become scarce.
According to the International Monetary Fund, inflation in Venezuela is expected to soar above 700 percent this year. In June, Maduro tried to clamp down on the black market trade in dollars through auctions of greenbacks at the weekly fixed rate, known as Dicom. There is also another official rate, of 10 bolivars per dollar, reserved for food and medicine imports.
“Things are going up in price faster than salaries,” noted Zabala, who spends 10 percent of his income on diabetes treatment, when he can.
Meanwhile, Maduro who earlier this week was branded a “dictator” by the US State Department, has vowed that a new constitution the Constituent Assembly is tasked with writing will wean Venezuela off its oil dependency and restart industry, which is operating at only 30 percent of capacity. But Maduro, who links the “black dollar” with an “economic war” allegedly waged by the opposition in collaboration with the US, has not given details on what would be implemented. Instead, on Thursday Maduro promised that “speculators” setting their prices in line with “the terrorist criminal dollar in Miami” would go to jail.
Venezuela has to make major debt payments, with a $3.4 billion dollar-denominated payment for state oil company PDVSA looming in October. It is increasingly unclear if the company will make the payment.
But, remember folks: this isn’t the result of socialism, because true socialism has never really been tried yet!
(Thanks to Instapundit)
Juliette Akinyi Ochieng blogs at baldilocks. (Her older blog is located here.) Her first novel, Tale of the Tigers: Love is Not a Game, was published in 2012. Her second novel tentatively titled Arlen’s Harem, will be done one day soon! Follow her on Twitter and on Gab.ai.
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Update DTG: The layoff bleg continues $915 down $1585 to go by Aug 10
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