Venezuela's currency plummets September 3, 2007 CARACAS: The Venezuelan economy, under the direction of President Hugo Chávez, is starting to unravel in the currency market. While Venezuela earns record proceeds from oil exports, consumers face shortages of meat, flour and cooking oil. Annual inflation has risen to 16 percent, the highest in Latin America, as Chávez tripled government spending in four years. Exxon Mobil and ConocoPhillips are pulling out after Chávez demanded that they cede control of joint venture projects. The bolivar has tumbled 30 percent this year to 4,850 per dollar on the black market, the only place it trades freely because of government controls on foreign exchange. That compares with the official rate of 2,150 per dollar set in 2005. Chávez may have to devalue the bolivar to reduce the gap and increase oil proceeds, which make up half the government's revenue. "This has been the worst-managed oil boom in Venezuela's history," said Ricardo Hausmann, a former government planning minister who now teaches economics at Harvard University. "A devaluation is a foregone conclusion. The only question is when..." iht.com
Why can't Chavez see the need to diversify the Venezuelan economy beyond oil? I think some people are right who say he wants the poor to be dependent on him and the only way to do this is to keep the poor dependent on his oil funded social programs no matter the negatives it has on the oil industry and the economy overall.
Why are you so concerned about Venezuela's currency plummeting, when the same thing is happening to your own currency? Why are you so fixated on Chavez when the most evil people in the world are running your own country? And I am not talking about Bush and Cheney.
PBS News Hour For those interested in what the falling dollar means and doesn't mean here's some clarification. They have video if you want to watch.
When there is an "official rate" for the dollar that is half the black market rate, let me know. Until then Rat you need to learn some economics.
im realy curious! are there outside influences creating this problem? does anyone believe that exxon,or mobile, are going to make it better for the poor? do i beleive he wants to enrich himself? ABSOLUTLY! do i beleive that exxon or mobile want to enrich themselves? ABSOULUTLEY! the question is why is he failing! could it be that forces beyound his control are forcing him into a corner, or is he just a nother asshole?
