Posts Tagged ‘Inflation’
Socialist Hugo Chavez has decided to devalue Venezuela’s currency to stimulate government spending and/or social programs. Something, I’m sure our government here in American would love. Just to illustrate how we (America) aren’t much different than full fledged socialists. CARACAS, Jan 9 (Reuters) – Venezuelans rushed to the shops on Saturday, fearful of price rises after a currency devaluation that will let President Hugo Chavez boost government spending ahead of an election but feeds opposition charges of economic mismanagement.
In a bid to jump-start the recession-hit economy of South America’s top oil exporter, Chavez on Friday announced a dual system for the fixed rate bolivar.
It devalues the currency to 4.3 and 2.6 against the dollar, from a rate of 2.15 per dollar in place since 2005, giving the better rate for basic goods in an attempt to limit the impact of the measure on consumer prices.
The US administration and Central bank are left with a choice between two terribly bad options. Both will kill the economy, banks and the Dollar.
One of the things I always wanted from the mainstream media is the full story, no matter how seemingly amazing it is. I will report on economic doomsday talk around the internet. While it is to be taken with a grain of salt, I think it’s important to follow these kinds of stories because they can end up becoming reality in a world so driven by the web. Various online sources are beginning talk about the threat of a falling dollar. Today, Bloomberg ran a story titled, “Dollar Reaches Breaking Point as Banks Shift Reserves”.
Professor Roubini, of New York University’s Stern business school, believes that while such a major change is some way off, the Chinese government is laying the ground for the yuan’s ascendancy.
Known as “Dr Doom” for his negative stance, Prof Roubini argues that China is better placed than the US to provide a reserve currency for the 21st century because it has a large current account surplus, focused government and few of the economic worries the US faces.