chavista apologists will point out now at the fact we had inflation of over 80% a couple of years in the nineties; Everything will be about that and then chris shall pad himself on the shoulder and he shall call us morons again.
No hope, man.
Had you written this post a couple of years ago, it would actually mean something. Now that you are an ex-chavista that supported everything the government said or did and actually wrote many times that high inflation was okay while higher growth was there, it's worth crap. Growth is gone but high inflation is still there.
Where's the apology for writing all that shit in 2007 and 2008, Burnett?
Don't worry, they're going to start doing dual budgets. One in the funny money and one based on foreign currency. And if the government decides you bring "value", you're going to be able to buy the parts you need to manufacture. Otherwise, forget it. So...expect shortages, thanks to your centralized, and now dual, economy. This, they claim, will bring down inflation. It's as if they hadn't even taken an econ 101 class.
"We're going to hand in the 2010 budget to the National Assembly on 15 October, but at the same time we're doing a foreign currency budget, something we haven't done before," Giordani said.
Payments of US dollars, where the government supplies companies and travellers with US dollars at the official rate, a rate much better than the unofficial black market rate, "has been stabilising, as has the price of petroleum," said Chacon, adding that allocation of US dollars will be based on who or which company "adds the most value" to the economy.
(http://www.venezuelanalysis.com/news/4856)
Mario, unless ow has invested your money in Venezuela and lost, I don't think he owes you an apology. He writes what he thinks and we all know that this blog (just like most of the ones out there) are just places where people write their ideas. So to demand an apology is simply silly.
In fact I think he has done what a lot of people do not: admit that he was wrong. For that I commend him.
Bravo, Burnett. You managed to write an entire post about inflation that never once mentioned the word liquidity, or hinted at an awareness of the role of the growth in the money supply in the general price level, or in any way gave any indication that you have even a passing, fleeting acquaintance with the extreeeeeeemely long and excedingly well established literature setting out contemporary economists' thinking on inflation.
Once every couple of months or so, in a major bout of procrastination, I check out your blog. You waste my time every single time.
Jeez Quico, I didn't think I'd have to do so much hand holding with you.
No kidding a booming money supply, double dipping on the reserves, etc. cause inflation (well not always, look at the U.S. but the point remains for Venezuela).
But this wasn't a post on what is causing inflation in Venezuela or even what causes inflation in general... it was a post on what is NOT causing inflation in Venezuela and how stupid it is for the Venezuelan government to keep postponing needed reforms on the bogus notion that THEY will cause inflation when obviously they are NOT what is causing inflation and the REAL causes of inflation in Venezuela are not being dealt with.
Sorry if all that was too subtle for you...
Yet more debt coming:
http://www.panorama.com.ve/panod...di/
569289a.html
Pdvsa emitirá otros $ 3.000 millones en bonos
Reuters
Maracaibo, Venezuela.- Petróleos de Venezuela (Pdvsa) prevé emitir este mes unos 3.000 millones de dólares en nuevos bonos de corto plazo, al tiempo que ha adquirido deudas aprovechando momentos de bajos precios, dijo un vicepresidente de la firma.
La empresa colocó en julio 3.000 millones de dólares en “petrobonos” al 2011 para hacer frente a ingentes deudas con sus proveedores, que se acumularon debido a problemas de flujo de caja por la dramática baja de los precios del crudo.
El vicepresidente de Exploración y Producción de Pdvsa, Eulogio Del Pino, dijo a periodistas que la emisión está prevista para la “segunda parte del mes” de octubre, que se trata de papeles con plazo de “2 a 3 años” y con un retorno pagadero en dólares.
Pese a que directivos de la gigante estatal sostienen que su endeudamiento es manejable respecto a sus activos, analistas hablan de una fragilidad en las finanzas de la corporación, que en el 2007 emitió 7.500 millones de dólares en bonos para financiar proyectos.
The link is dead.
Panorama doesn't archive.
Here is the same basic story in english:
http://in.reuters.com/article/
oi...320603120091013
OW, seems your FARC heros are continuing to recruit children to over throw the legitimate government of Colombia. Hope you're proud.
http://english.aljazeera.net/
new...4748523163.html
OW and Quico
I think that Quico was too hard. Admitting the existence of a problem due to governmental policies (yet to be specified) is already major progress in the road of personal recovery.
The PODEMOS-ization of Burnett is going well though there is still quite a bit to cover.
Thank god Chavez does not listen to a sad bitter twisted loser like you OW. Viva Chavez. By the way OW could i have your reaction to the Nationalisation of the Hilton hotel in nueva esparta. Another incredible success
"By the way OW could i have your reaction to the Nationalisation of the Hilton hotel in nueva esparta. Another incredible success"
It's been a long day but at least you got me to laugh! Yes, by the standards of the Bolivarian Revolution taking over a hotel is an incredible success.
hmmm, if I wrote such silly posts I'd probably be forced to get rid of my comments section too:
http://incakolanews.blogspot.com...n-
currency.html
At least it stops people from cluttering up the place with inconvenient facts.
...and he charges $250 a year to have that drivel delivered?
How comes that inflation rate is not going down at least a bit in the current recession?
Oil is at $75 a barrel so now they are back to pissing away money hand over fist:
http://economia.noticias24.com/n...-dolar-oficial/
Just what the country needs - giving out super cheap dollars to import consumer goods!!! So much for saving the market for cell phones actually made in Venezuela.
Also, this is probably a raquet. The prices on things like electronics have gone up, the excuse being that importers had to get black market dollars (much more expensive) to import them. Now that they are back to getting dollars at 2.15BsF will the price of cell phones go back down? Somehow I doubt it. They'll just have hyper profits for this company and the Venezuelan government (and society) will once again be getting ripped off.
"How comes that inflation rate is not going down at least a bit in the current recession?"
It has gone down a bit, but not much.
The main reason is the government is still increasing the money supply (printing money) because otherwise they don't have enough money to pay their bills. Part of that is the scam where they just take money from the national reserves and in effect spend it a second time.
And as I've pointed out a number of times the irony here is that it is the stupid exchange rate which causes the government to be short of money. Remember, the governments expenses, which are in Bolivares, go up 20% or so each year as employees are given wage increases to at least partially make up for inflation.
But the governments oil revenue wouldn't necessarily increase because they would only get 2.15 BsF per dollar of oil exports just like they have for four years now. So because of the fixed exchange rate oil revenues would stay constant unless prices themselves were constantly going up (and going up by at least 20 or 25% each year). This is why their whole scheme worked for a while (oil prices were going up by that much each year) but it probably won't work going forward.
BTW, you might wonder why the U.S. has gotten away with an incredibly expanded money supply but still has minimal inflation. It might be tempting to think it is because of the recession but it isn't, at least not directly.
The reason is that inflation isn't determined by just the money supply but also the velocity of that money - ie how often it is spent (I buy something from you today, you take the same money and spend it tomorrow with someone else, who in turn spends it the next day versus I spend money on something and the person who gets the money just puts it in the bank or under their mattress rather than spending it).
The U.S. money supply was expanded by the US Federal Reserve giving trillions of dollars to banks and financial institutions to save them from collapsing. But the banks by and large haven't done anything with that money - they haven't spent it or loaned it out to anyone (well the fucks did use some of it to pay themselves bonusses and Obama let them get away with it but that is another issue...), rather they are just holdling to themselves to improve their balance sheets. So even though that money represents a huge increase in the money supply it doesn't fuel inflation because its velocity is effectively zero.
The big worry is when the banks get more confident they WILL start loaning it out and it will start being spent and then there will be a spike in inflation. In theory the FED is supposed to take the money back from the banks before that happens but not so soon that the banks wind up back in danger of collapsing.
So in short:
Venezuela has high inflation because it has greatly expanded the money supply and done so by giving money to people that spend it alot (govt workres, missions, etc.) and so the money perculates very quickly through the economy and creates inflation.
The U.S. has low inflation because even though it too has greatly expanded the money supply it has given it to banks who have chosen not to spend or lend it - it just sits in accounts, not moving, and therefore not creating inflation.
Of course, this brings up an important point. While the U.S. way may seem better from a macroeconomic point of few it could be said that VEnezuela is much better from a moral and social viewpoint - at least they are giving the money to working class and poor people as opposed to the U.S. which mainly gives it to people who are already hyper rich.
Poor people like Arne Chacón and Ricardo Fernandez Barrueco, among others...oh, yeah, and 300 BFs to poor students in low quality colleges
and 2.2 billion dollars for Uralvagonzavod and other Ruski and I don't know how much for the guys from the Middle Kingdom.
OW said: "Part of that is the scam where they just take money from the national reserves and in effect spend it a second time."
Well, fuck me sideways. There's a possible that Quico finally got you schooled on that (inter)national reserve thingy.
OW said: "While the U.S. way may seem better from a macroeconomic point of few (edit - substitute "view") it could be said that VEnezuela is much better from a moral and social viewpoint - at least they are giving the money to working class and poor people as opposed to the U.S. which mainly gives it to people who are already hyper rich."
Oh, well, back to muh pron.
Hey Tosh, I need to buy a new computer. Where can I buy one of the Bolivarian computers? I take you own one: how good is it?
The problem with Venezuela is that you don't know where to start when you think of stopping inflation, or trying to remedy the distortions that make it happen, along with a host of other economic and social illnesses.
The fact that the source of revenue for the government is a state owned oil company for over 30 years throws every sensible notion out the window. The other fact is no better: this easy revenue has been the mother of populism and improvisation for over 30 years.
It is a nightmare and a political impossibility, to think of reforming this.
It's not about Chavez, though he is blinder than his predecessors and likely to lead Venezuela to deeps never before known.
It's about the effect of state oil on a country without institutions to manage it, or rather with all the "institutions" to mismanage it.
...So how come in Chile, Copper is State-owned and they don't fuck it up? There are plenty of countries with healthy, state-owned ventures. Being a free-market absolutist arguing it can't be done is counter-factual. I'm not saying PDVSA is well run in Venezuela, I'm saying it seems possible to run it well without selling the whole thing off.
Very Funny....
http://video.citytv.com/video/45...n-2--Episode-5/
Air Date: Thursday, October 15, 2009
Leslie plays host to the visiting party from the Parks and Recreation department of Pawnee's sister city, Boraqua, Venezuela and finds the cultural differences surprising. Meanwhile, Tom becomes an errand boy and intern April starts playing hard to get.
From Emmy Award-winning executive producers of “The Office” comes a new mockumentary that looks at the exciting world of local government. The documentary cameras follow Leslie Knope (Amy Poehler) a mid-level bureaucrat in the Parks and Recreation Department of Pawnee, Indiana. In an attempt to beautify her town Leslie takes on what should be a fairly simple project: help local nurse Ann Perkins (Rashida Jones) turn an abandoned construction pit into a community park. Leslie is alternately helped and undermined by her colleague, Tom Haverford (Aziz Ansari), who cheerfully exploits his government position for personal gain. She is also thwarted by her boss Ron Swanson (Nick Offerman) who is philosophically opposed to government in any form. Helping Leslie and Ann navigate the Pawnee bureaucracy is charismatic city planner Mark Brendanawicz (Paul Schneider), whose outlook has been soured by 15 years of public service. If they can pull it off, Leslie hopes that she also will have inspired her uninterested college intern April (Aubrey Plaza) and April’s whole generation – all the while moving one step closer to her ultimate goal: becoming the first female president of the United States.
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