Wow! Venezuela currency devalued by 46,5%

[Alekbaylee]

Just after Japan. Who's next : Euro?

 

http://ca.finance.yahoo.com/news/venezuela-devalue-currency-225536717.html

 

Wonder how local population cope with that and react to it!

[JEast]

No wow really.  Since the man that many love has been in power ('99), the bolivar has been devalued by 91%.  And that is with oil moving up more than 5x!!  That is wow, or more like very sad for the naive people of Venezuela.

 

Cheers

JEast

[Alekbaylee]

Ironically, the gov. says this is meant to fight (hyper)inflation... ???

[Liberty]

Ironically, the gov. says this is meant to fight (hyper)inflation... ???

 

War is Peace, Freedom is Slavery.

[Liberty]

One of the things I really like about The Economist is that pretty much every week they have an update on Venezuela. It's crazy just how bad governance is there and how a country that had everything to succeed is figuring out ways to screw itself, and it'll probably take a really long time to unscrew it.

[Alekbaylee]

Ironically, the gov. says this is meant to fight (hyper)inflation... ???

 

War is Peace, Freedom is Slavery.

 

;)

 

Seriously though, haven't heard about any protests/demonstrations like in Argentina a few years ago.

[Liberty]

;)

 

Seriously though, haven't heard about any protests/demonstrations like in Argentina a few years ago.

 

That should come in due time. From what I've been reading, the country is in serious trouble.

[Cardboard]

This is what happens with socialism and a president who favors populist decisions over time in a competitive world. Too bad that so many in the U.S. don't get the message either.

 

IMO, one of the best ads during the election was from Thomas Peterffy founder of Interactive Brokers and paid by his own pockets (I wonder how many of the many ultra leftists on this board closed their account after seeing the ad?). He was basically saying that under a socialist regime, that the rich would get poorer, but that the poor would also get poorer. How true has this been in Venezuela! I know many educated expatriates from this country. Some very smart people of the middle class who now can't really go back home since they would be totally unable to replicate their current standard of living. 

 

If democracy is about electing the most likeable guy or gal, then democracy is doomed to fail. Especially, if the electorate is highly uninterested in the issues at hand and only thinking about their own good. Also, when you hire someone or choose a CEO, you look for the most competent person, the one who will give you the most bang for your buck. With politics, in most instances, it is up side down. I could not believe the First Lady saying at the Democrats convention that Barack was so poor when he met her, that she could see outside through the car... Since when being poor is a top criteria to be elected president of the United States or the most complex enterprise ever invented? What about competency for the job? IMO, Hillary Clinton would get much more boxes ticked on job readiness checklist.

 

Cardboard 

[Alekbaylee]

This is what happens with socialism and a president who favors populist decisions over time in a competitive world. Too bad that so many in the U.S. don't get the message either.

 

IMO, one of the best ads during the election was from Thomas Peterffy founder of Interactive Brokers and paid by his own pockets (I wonder how many of the many ultra leftists on this board closed their account after seeing the ad?). He was basically saying that under a socialist regime, that the rich would get poorer, but that the poor would also get poorer. How true has this been in Venezuela! I know many educated expatriates from this country. Some very smart people of the middle class who now can't really go back home since they would be totally unable to replicate their current standard of living. 

 

If democracy is about electing the most likeable guy or gal, then democracy is doomed to fail. Especially, if the electorate is highly uninterested in the issues at hand and only thinking about their own good. Also, when you hire someone or choose a CEO, you look for the most competent person, the one who will give you the most bang for your buck. With politics, in most instances, it is up side down. I could not believe the First Lady saying at the Democrats convention that Barack was so poor when he met her, that she could see outside through the car... Since when being poor is a top criteria to be elected president of the United States or the most complex enterprise ever invented? What about competency for the job? IMO, Hillary Clinton would get much more boxes ticked on job readiness checklist.

 

Cardboard

 

I doubt there are many if not any ultra leftist on this board.

You probably know the saying : you're socialist/leftist when you're young, centrist/liberal when you start making money and downright rightist/capitalist by the time you get richer.  ;)

[JEast]

The longer a populist stays in power the more the brain drain for the country accelerates and the longer the populist stays in power.  A very perverse outcome. 

 

I too know many expats from Venezuela.  As an extreme case, my expat friend’s parents left the country to move back to Italy -- after 50-years!!  I can only imagine what it is like to leave your home of 50-years when you are approaching 80.  To make matters worse, the father was a district judge that was essentially forced to leave his adopted country.  But they saw the writing on the wall and made the correct decision to leave several years ago.

 

Cheers

JEast

[SouthernYankee]

Just this morning I heard an ad on the radio about how Citgo was donating fuel to "poor" people here in the United States. The person speaking was a Kennedy (I think it was Joe Kennedy, which kind of makes me think of Jane Doe). Maybe Citgo (and the Chave government) should stop giving away fuel, and try selling it instead.

[Liberty]

Just this morning I heard an ad on the radio about how Citgo was donating fuel to "poor" people here in the United States. The person speaking was a Kennedy (I think it was Joe Kennedy, which kind of makes me think of Jane Doe). Maybe Citgo (and the Chave government) should stop giving away fuel, and try selling it instead.

 

That initiative is purely a foreign policy PR thing, IMO. Just so Chavez can say at home that he's embarrassing the US, etc.

[tyska]

Just this morning I heard an ad on the radio about how Citgo was donating fuel to "poor" people here in the United States. The person speaking was a Kennedy (I think it was Joe Kennedy, which kind of makes me think of Jane Doe). Maybe Citgo (and the Chave government) should stop giving away fuel, and try selling it instead.

 

Makes this article kind of ironic.

http://oilprice.com/Finance/investing-and-trading-reports/US-Citizens-are-Paying-for-Venezuelan-Socialism-with-High-Pump-Prices.html

 

"Venezuelan Subsidies

 

Here is the salt, Venezuela whose government under President Hugo Chávez subsidizes gasoline for their citizens, so Venezuelans pay in the neighborhood of 18 cents a gallon, and much of this gasoline comes from the US in the form of exports. For example, U.S. exports of gasoline to Venezuela climbed to a record high of 85,000 barrels a day in November of 2012, and total petroleum products are well over 200,000 barrels per day of refined products being imported from US refinery operators.

 

No Incentives

 

Ergo, the US has a tighter than otherwise refined products market due to increased exports to countries like Venezuela, so US citizens pay higher prices for the illusion of a tighter end products market, and Venezuelans who have no incentive to use fuel efficiently due to below market subsidies, demand more and more exports from the US, raising fuel costs on US consumers, while they pay ridiculously low consumption prices. "

[bargainman]

A few things:

 

This devaluation is a joke because the Bolivar traded on the black market at a devalued price for a long time and always has.  (that's not to say it's a noop, but it's just 'officially' moving closer, although not exactly to, its 'real market' ahem, 'black market' value)

 

What is not a joke is that the bolivar has been currency controlled/pegged to the dollar for a number of years.  It has also been "limited".  By that I mean, people could give the Venezuelan gov Dollars, and they'd happily hand over Bolivares, but you couldn't give them Bolivares and get dollars.  Citizens of Venezuela were allowed to exchange a certain amount out as dolllars if they travelled out of the country via their credit cards, but this was limited to a small amount.

 

There was at some stage a way of exchanging by buying bonds in Bolivares, then selling them in Dollars, but Chavez and his buddies cracked down on that and closed all the trading houses that were doing this.

 

With regards to the left vs right debate, I'll say this.  Comparing Chavez to 'Obama and the democrats' is borderline ridiculous.  If you took everything Obama wanted to do (remember he's a moderate democrat) and implemented it, you'd get nowhere near the madness that is Venezuela.  Heck, if you took everything these 'ultra left' democrats you're referring want to do, you'd get nowhere near.  Take a look at these charts:

 

http://en.wikipedia.org/wiki/File:Historical_Mariginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpg

http://en.wikipedia.org/wiki/File:Chart_of_US_Top_1%25_Income_Share_(1913-2008).svg

http://en.wikipedia.org/wiki/File:US_high-income_effective_tax_rates.png

 

We are nowhere near the highs for taxation in this country, and as the last chart shows we are near an all time low for tax rates for top income earners.  The problem is that the conversation always tends to be relative to today, not to history. So people react to raising taxes on highest earners today as if they were raising them to some new high, when in reality they'd be raised to a historic low, just not quite as historically low as today.

 

Chavez is/was reportedly manic depressive and on medication.  He was a paratrooper in his previous life, he led an attempted coup.  He had a show where every week he would speak on radio for an uninterrupted 4 hours straight!  Obama is an ex harvard law professor.  The gap between the two countries and the two men is as massive as the grand canyon.

[Cardboard]

Hey Bargainman,

 

Did I ever complain about higher tax rates in my post? What I care about is runaway deficits and debts to spend on unsustainable programs. Programs that even if you taxed your 1% to 100%, there would not be enough to support them. Even if you confiscated them all, it would help for a while, then these programs would still end up in default down the road the way they are managed.

 

It is not just a Democrats problem, it is also the one of the Republicans. Bush did not really run a tight ship during his presidency! Like Obama, and you will never hear that from the ultra leftists (my own screwed expression for extreme left), is that he inherited too a mess or the pop of the largest stock market bubble in history. So fearing a depression, he went for guns and butter like the old Johnson which led to the housing bubble which was most certainly already started under Clinton. House prices were pretty high down there even as early as 1998 and people were already hungry for McMansions.

 

What I am against is mostly everything that is run by a government. Especially in the hands of a populist and divider or one looking for an enemy to blame to implement popular policies. Dictators always rise this way unless they do a coup. Leaving aside dictators, even a democratically elected government is prone to corruption and mismanagement of public finances. As Charlie Munger says, incentives are everything. Unions are equally bad and always looking to protect the underperforming, the ones who are likely not in the right job or simply don't have the right attitude and work ethic.

 

Meritocracy is how you create a better world, one that seeks to always do better and create equal opportunities for all. There is no racism, gender issue or faith involved in meritocracy. Hand outs on the other hand lead to special treatment, one group being favored over another, people who never leave the cradle. It leads to subpar productivity and an eventual terminal decline in that society since other societies seeing the opportunity raise their productivity above it. What I am describing is happening right in front of your eyes in Europe. It has happened in Venezuela. Obama is implementing some of that to the U.S. and once the trend is started it becomes near impossible to undo it due to this populist mantra. I don't know if we will ever see another "small government" elected president in the U.S. I am afraid of the long term consequences.

 

As an anecdote, my dad just went for a coronary intervention in Florida. He could not believe how efficient they were relative to the same procedure he had in Canada. So go ahead, try to copy our system down there and get to a slower service and longer line ups, more medical malpractice with essentially no way to sue and a medicine that stagnates in the past instead of having the newest equipments and techniques. By the way, have you seen where there is corruption in the medical system in the States? It is always where the government is handing out money to the hospital and practitioners for their services and where there is not enough arm's length dealing.

 

Another anecdote, who paid for my dad's intervention? My mom's benefits plan. Where does it come from? A very generous plan earned through employment in the public service. Now, these plans also exist in the private sector, but they are likely more tightly managed since again there is an incentive to keep them in check with what can be afforded and competitive with the rest of employers.

Could they afford to be in Florida at their age paying a private insurer? Not certain. Of course, my mom would likely have received a higher salary had she not received these benefits and could have stashed away more money to pay for it, but this kind of hand out lead in my opinion to less personal responsibility or to make your own plan for the future. There is an ingrained belief in our society that people are not wise enough to save for their retirement, to create their own benefit plan. I believe it is making people slaves to a system while they are more than intelligent enough to figure this out on their own and with the help of education and others to create for themselves a better future and gain more pride in the process.

 

What is mind boggling to me is that people here understand fully what I am describing within the private enterprise or how they manage their own house. They like capitalism and profit from it investing everyday. Why is it then that they firmly believe that the government will do a better job than themselves running so many other aspects of their lives? With no incentives and checks and balances? Some will say that I have no heart and that not everyone could fit under a meritocratic system. Indeed, I care very much for the ones truly in need and who due to their own circumstances could not make it through life like most of us. What I think that the government should do is to keep caring for these people who are ill, handicapped, etc. and even increase their care, but that the number of them should be minimal. I am not ok for people to stay on unemployment and welfare for long periods because it is easier and working for example at McDonald's would not earn them as much as staying home. I see so many sitting at home during the winter time collecting a cheque because their main job is seasonal. Someone else who is hard working and who will likely never collect a dime of unemployment pays for that. That is unfair. Likewise for so many welfare recipients who basically are parasites to society and to the ones who could use more of it. Subsidies of all kinds to encourage certain sectors. I could go on and on.

 

Cardboard

 

[bargainman]

I think we agree in principle on many things, especially what you wrote, even though it may not seem so (I can't write everything I think and neither can you), so I think we write about what we disagree on.  The question you're getting at is how to best address accountability.  I don't think that government is completely useless in that regard, but clearly their record in many areas is dismal.  I guess it's partially like that old quote: "Democracy is the worst form of government, except for every other one"?  If there was no government who would keep corporations in check?  Do you think the health insurance industry would cover people with pre existing conditions if it weren't mandated by law? 

 

The foundation of the US is the checks and balances the founding fathers wrote into the constitution.  I don't have a solution, but while there are many good things about the US healthcare system there are also many awful things.  Look at the cost per capita vs amount of coverage vs outcomes.  It's less of a meritocracy and more of a plutocracy.

 

I wonder if there is a way to drive more transparency and drive out the inefficiencies.  When I lived in Canada I couldn't believe the number of times people went on strike complaining about the conditions or this benefit or that one!  I also can't believe the sense of entitlement some people have and the massive pensions some government workers get.  It's unsustainable.  I remember reading an article by John Mauldin on Sweden, where the Swedish people were pissed off that they were held up as the nanny state.  Apparently their equivalent of social security is tied to a percentage of GDP!  what a novel idea!  People get in payouts what can be afforded by the size of the economy that year!!  Imagine if they tried to implement that here!?  I think most of these programs should be capped by some % of the GDP.  That would help address the sustainability issue.

 

With regards to abuse of the programs, that's a really tough one.  There will always be those who figure out how to game the system.  The question is how do you make the system so that those who need it can access the help without so much pain...  it's a tough problem, I don't have a solution.  IMO recently some of the ones who have gamed the system more so than not are the top 1% with their tax rates..  I'm sure there are plenty of others in the 99% who have gamed the system too.

 

I've seen all sorts of things that don't make sense.  One guy used to be a teacher for 30+ years, now he can't find a job cause no district wants to pay him his 30 year experience salary, so he just gets Social Security instead of finding a job!  wtf?  Another person who's 2 degrees away worked for the gov for 20 years, got a 50k pension, then took another gov job and got another 50k pension!  wtf?

 

Anyway, my post was in reaction to the implicit comparison of Obama and Chavez which I've seen too many times to not say something about.  One is a moderate democrat, the other is basically a medically certified mad man. 

 

And here is another tidbit.  Apparently 2 years ago the black market Bolivares rate was 11!!  Now it looks like it's closer to 20...  So that move from 4 to 6, not so close to reality...

[Kiltacular]

The foundation of the US is the checks and balances the founding fathers wrote into the constitution.  I don't have a solution, but while there are many good things about the US healthcare system there are also many awful things.  Look at the cost per capita vs amount of coverage vs outcomes.  It's less of a meritocracy and more of a plutocracy.

 

Soon, we won't have doctors to kick around anymore:

 

http://www.latimes.com/health/la-me-doctors-20130210,0,1509396.story

 

 

They are working on proposals that would allow physician assistants to treat more patients and nurse practitioners to set up independent practices. Pharmacists and optometrists could act as primary care providers, diagnosing and managing some chronic illnesses, such as diabetes and high-blood pressure.

 

"We're going to be mandating that every single person in this state have insurance," said state Sen. Ed Hernandez (D-West Covina), chairman of the Senate Health Committee and leader of the effort to expand professional boundaries. "What good is it if they are going to have a health insurance card but no access to doctors?"

 

**

 

Naturally, this was entirely predictable.  The doctor shortage canard has been being fed to the populace for a couple years.  You can keep your doctor, if he exisits. 

 

The next step, of course, will be to create a government union for these newly deputized "doctors". 

 

Seriously, though, it's not like I have a solution.  But, those who claim that we're any closer today to solving this problem than we were a few years ago have some 'splainin to do.