Monday, January 11, 2010

Hugo is at it Again

. Monday, January 11, 2010

From CNN this morning:

In the wake of his decision to devalue Venezuela's currency, President Hugo Chavez on Sunday said he would put the military on the streets to ensure that business owners don't raise prices.
Speaking on his weekly television program, "Alo Presidente," Chavez railed against merchants who re-price their items in reaction to Friday's announcement that the Venezuelan bolivar currency, which had been fixed at 2.15 to the U.S. dollar since 2005, was devalued to 4.3 to the dollar. For food and medicine, Chavez announced a second fixed exchange rate for these "necessity" goods at 2.6 bolivares to the dollar.
"I want the national guard in the streets, with the people, to fight speculation," Chavez said, calling re-pricing a form of robbery.
A devaluation makes foreign products relatively more expensive for domestic consumers, discouraging imports. Chavez showed a photograph in a newspaper of consumers in long lines over the weekend to buy goods, fearing that the sharp devaluation could result in higher prices.
The president blamed such lines on "teleterror," saying that opposition media outlets were fueling a panic. "At this moment, there is absolutely no reason for anyone to raise the prices of anything," Chavez said.
I really want to see how the military is going to keep business from raising prices after Chavez himself devalued the currency. Are they going to storm into stores with a handheld personal barcode scanner on their hips and start scanning every item in every store to make sure that the prices were the same as the day before? If an empanada at a street vender goes up 5%, is he simply going to shut the vendor down and begin his own Chavez Empanada Stands? Is he simply going to nationalize every business that raises its prices? This is pretty nuts, even for Hugito.


Hugo is at it Again




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