As if the Venezuelan economy wasn’t going to hell on a hand basket fast enough, Venezuela Moves to Cap Prices, Profits
Venezuelan President Nicolás Maduro began to extend price controls over a broad swath of the economy in a bid to control inflation set off by his government’s increased spending, moves which risk exacerbating shortages in this oil-rich nation.
Caracas’s move to control prices came after the central bank reported last week that inflation had reached 54%, the highest rate in nearly two decades and, according to Trading Economics, a website that tracks global economic statistics, topping even war-torn Syria with the world’s highest rate.
Venezuela’s woes also come in an era of low global inflation, and when most neighbors, such as Colombia enjoy annualized inflation rates of around 2%.
The central bank report also signaled the likely culprit for the rise: The amount of bolívares in circulation rose 70% over the past year, a clear sign the government is printing ever larger amounts of money to stoke a slowing economy.
Rather than acknowledging increased spending, Mr. Maduro late Sunday blamed businesses that he said were responsible for hoarding and price-gouging as part of a so-called economic war against his administration.
Maduro is timing this ahead of the December 8 regional elections, even when he’s already said “that the results are already in” and has threatened jail for anyone who disagrees with same results.
Video in Spanish:
Johns Hopkins professor of economics Steve Hanke calculates that Venezuela has an implied annual inflation rate of 320%. The further radicalization of disastrous Chavista economic policies will make this worse.
Regarding the looted appliance store Daka, Miguel Octavio points out that It Is All About Arbitrage in Venezuela
My suspicion is that the viciousness against Daka was largely due to the company either receiving goods from Government imports (My main bet!) or receiving some Cadivi dollars for the stuff they sell. Daka was simply taking advantage of the arbitrage the Government was handing it over on a silver plate and the Government found out about it and got mad.