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peace & understanding

Venezuela Currency Devaluation

Venezuelan President Hugo Chavez on Sunday ordered soldiers to seek out businesses raising prices after a sharp devaluation of the Bolivar currency last week, saying his government will not tolerate price speculation.  Chavez’s government devalued Venezuela’s Bolivar currency on Friday, setting two rates of 2.6 and 4.3 against the dollar. 

The Bolivar now has two rates set against the dollar.

The Bolivar’s weakening is tied to soaring inflation, which peaked at 103 percent in 1996 when the government of former President Rafael Caldera lifted price and foreign exchange controls. Inflation in 2009 was 25.1 percent, the highest rate in the Americas.

The Venezuelan government is not the only one experiencing financial turmoil from overspending on a vast welfare state.  Chile is in trouble, North Korea, Greece, Iceland, the U.K., the United States, and many  more countries are all vulnerable to a collapsing currency due to overspending, stimulus, and bailouts.  It has been shown over and over that when governments dictate the value of fiat currency, the end game is near.

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