Monthly Archives: August 2011

Aug
19
2011
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In Case You Missed It… Articles Roundup Week of 8/19/11

In this week’s roundup…  Amidst harsh criticism, Venezuelan President Hugo Chávez plans to move Venezuela’s cash reserves from the United States and the United Kingdom to nations led by political allies; at the same time, Mr. Chávez is preparing to nationalize the gold industry; price controls prove to be an expensive mistake; the opposition faces government threats and harassment; and finally exiled opposition leader Manuel Rosales gives way to Pablo Pérez as the UNT presidential candidate in 2012.

 

Venezuela Plans to Move Reserve Funds, The Wall Street Journal

Venezuela plans to transfer billions of dollars in cash reserves from abroad to banks in Russia, China and Brazil and tons of gold from European banks to its central bank vaults, according to documents reviewed Tuesday by The Wall Street Journal.

 

Critics raise alarm over Venezuela reserves plan, Reuters

A reported plan to shift Venezuela’s international reserves from Western nations to political allies could hurt market confidence in President Hugo Chavez’s ability to repay debt and has prompted a flurry of speculation about his motives.

Venezuela to Nationalize Gold Industry, The Wall Street Journal

Venezuelan President Hugo Chávez said Wednesday he plans to nationalize the country’s gold industry in bid to take over production and ramp up international reserves, a day after plans to bring home billions in cash and bullion held overseas were divulged.

 

Medieval Policies: Another step forward from Hugo Chávez, The Economist

EIGHT years after Hugo Chávez’s socialist government imposed strict price controls on basic goods, Venezuela has the world’s highest inflation rate to show for the effort. By mid-2011, food prices in Caracas, the capital, were almost nine times higher than when the controls were introduced, according to the Central Bank; wages had risen by 40% less. Last year consumer prices increased by 27%—compared with an average in Latin America of 6%—and they are still rising. With a presidential election due next year, something had to be done. So President Chávez has used legislative powers granted him by the last parliament to decree a Fair Prices and Costs Law, which in effect makes inflation illegal.

Phone taps target Chavez opponents in Venezuela, The Associated Press

President Hugo Chavez’s political rivals are on notice that anything they say over the phone might be not only recorded by eavesdroppers but also played and flaunted on national television.

Former Rival Of Venezuela’s Chavez Bows Out Of Presidential Race, NASDAQ via Dow Jones Newswires

A major rival of Venezuelan President Hugo Chavez bowed out of the 2012 presidential race Wednesday, and threw his support behind another, formidable opposition contender.

 
Aug
19
2011
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ICYMI: Medieval Policies

Medieval Policies – Another Step Forward From Hugo Chávez

The Economist - August 18, 2011

Eight years after Hugo Chávez’s socialist government imposed strict price controls on basic goods, Venezuela has the world’s highest inflation rate to show for the effort. By mid-2011, food prices in Caracas, the capital, were almost nine times higher than when the controls were introduced, according to the Central Bank; wages had risen by 40% less. Last year consumer prices increased by 27%—compared with an average in Latin America of 6%—and they are still rising. With a presidential election due next year, something had to be done. So President Chávez has used legislative powers granted him by the last parliament to decree a Fair Prices and Costs Law, which in effect makes inflation illegal.

According to the decree’s preamble, it is the “flagrant abuses of monopoly power in many sectors of the economy” that have led to “constant price rises for no other reason than the…exploitation of the people”. So the state will now set “fair prices” across the whole economy (only banks are exempted) by determining the cost structure of every type of business. The government says the bureaucracy required to do this will be ready by November. Businesses deemed to be charging “unfair” prices will be fined or temporarily shut down.

The private sector, already hemmed in by many controls, is predictably angry. But there are critics on the left too. Heinz Dieterich, a Mexican-German academic who until recently was a prominent supporter of Mr Chávez, called the law the product of “hallucinations”. The medieval notion of the “just price” (associated with St Thomas Aquinas) was a “phantasmagoric projection like God or the Holy Spirit”, Mr Dieterich wrote.

To read the rest of the article click here.

 
Aug
19
2011
Posted by
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ICYMI: Medieval Policies

Medieval Policies – Another Step Forward From Hugo Chávez

The Economist - August 18, 2011

Eight years after Hugo Chávez’s socialist government imposed strict price controls on basic goods, Venezuela has the world’s highest inflation rate to show for the effort. By mid-2011, food prices in Caracas, the capital, were almost nine times higher than when the controls were introduced, according to the Central Bank; wages had risen by 40% less. Last year consumer prices increased by 27%—compared with an average in Latin America of 6%—and they are still rising. With a presidential election due next year, something had to be done. So President Chávez has used legislative powers granted him by the last parliament to decree a Fair Prices and Costs Law, which in effect makes inflation illegal.

According to the decree’s preamble, it is the “flagrant abuses of monopoly power in many sectors of the economy” that have led to “constant price rises for no other reason than the…exploitation of the people”. So the state will now set “fair prices” across the whole economy (only banks are exempted) by determining the cost structure of every type of business. The government says the bureaucracy required to do this will be ready by November. Businesses deemed to be charging “unfair” prices will be fined or temporarily shut down.

The private sector, already hemmed in by many controls, is predictably angry. But there are critics on the left too. Heinz Dieterich, a Mexican-German academic who until recently was a prominent supporter of Mr Chávez, called the law the product of “hallucinations”. The medieval notion of the “just price” (associated with St Thomas Aquinas) was a “phantasmagoric projection like God or the Holy Spirit”, Mr Dieterich wrote.

To read the rest of the article click here.