Courtesy of Mish.
A total economic collapse in Venezuela is now underway. In a futile battle against high prices, President Nicolás Maduro ordered the military to enforce an order that the Daka electronics chain reduce its prices to October levels. The store did not comply and the result was chaos.
Bloomberg reports Army Storms Caracas Electronics Stores, Shoppers Follow
The government-ordered military occupation of a Venezuelan electronics chain has brought out a reserve force in its wake: a line of shoppers that stretched for three blocks from a store in eastern Caracas today.
“You have to take advantage of the government regulations because it was too expensive to buy before,” said Maryorie Cacique, 33, as she stood in the line with her three children in hopes of getting a 90 percent discount on an air conditioner in the army-occupied Daka store.
Black Market
“There are no economic reasons for the shortages and price increases we are seeing,” Maduro said late yesterday in a national address in which he read the Koran, Bible and Torah. “This is not because of a lack of dollars. It’s political.”
Chief price regulator Eduardo Saman said Nov. 9 on state television that it’s illegal for stores to raise prices on existing inventory. The government has set prices for everything from medical services to flour.
Venezuela Sinks Deeper Into Hyperinflation
The Financial Times reports Venezuela Sinks Deeper Into Hyperinflation
Prices rose 5.1 per cent in October, the second highest monthly increase in over three years, according to the the Central Bank of Venezuela (BCV).
The price jump brings accumulated inflation for the first 10 months of 2013 to 54.3 per cent – well into hyperinflation territory, which analysts at Goldman Sachs define as seasonally adjusted annualised rates of more than 40 per cent.
At the root of Venezuela’s economic woes is a tangled web of price and currency controls which, together with problems in the oil industry that supplies 96 per cent of export revenues, have generated a shortage of foreign currency, on which the import-dependent economy relies.
Path to Hyperinflation
1. In May of 2009 Chávez Seized Assets of Oil Contractors after which Chavez stated “our people will never again be anyone’s slave”.
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