Venezuela president raises fuel price, devalues bolivar to tackle crisis

I also think a violent outcome is the only way for a change to happen, unfortunately. But I don't know how far away it is.

We've already been through a lot and people seem to just go about their daily business like zombies. Wake up, go to the markets to line up to get a handout (if it's your turn that day), repeat.

Things are getting more and more desperate, but I don't see a breaking point. I don't know if people are just waiting for things to sort themselves out or what.

We have frequent power outages, no food , no medicine (I've been looking for an iron supplement for my pregnant wife for over a week now), nothing. And people just keep rolling with it.

Let's see how long the patience lasts. It's not going to be pretty unfortunately.

Yeah , I realized I missed a zero there! Edited. This Forbes[1] article has even worse numbers. Filling up the tank here is something people don't think about. People even tip the gas pump attendant two or three times the cost of the full tank (that's obviously over now).

The reason we are angry is not because we now have to pay a very low price for gas. The reason is that this country had a huge bonanza and it was all stolen and now the govt says its because of the "economic war" the US and allies are waging against Venezuela. Apparently, the fact that the US is extracting shale oil is all just a plan to topple Putin and Maduro. And now that OPEC wants to break the shale oil companies is another evil plan.

It's everyone elses fault that after 18 years of the highest income we've ever had, we now have no money for the rainy days.

[1]http://www.forbes.com/sites/timworstall/2015/01/26/that-vene...

Even if it's not to that extent, the bigger number leaves a bigger impression without giving it much thought, even in a relatively trained mind. Once you parse that it says percent, sure, you can deduce that it's describing it proportionally and infer that the price was probably pretty low to begin with, but why do we need to have titles that require this to get the gist of it when we could describe it in a more clear manner from the beginning?

edit: changed punctuation mark.

"suffer for many years to come"

Unfortunately it will probably take decades to bring the Venezuelan economy back to a normal.

Almost every local industry is in shambles and foreign investors will need at least a decade to resolve all the claims from past nationalizations and settle all the debts.

Perhaps the worst economic problem is that any entrepreneurial spirit in the country has been crushed. For more than a decade the way to get ahead was to manipulate the system or leave.

Lastly the political institutions are completely broken. Another charismatic strongman could come along or the military could simply take over.

None of this is a quick fix. Things can - and probably will - get worse for years before they get better.

An analogy: If a well functioning economy is like a rain forest with thousands of interacting systems and species in a complex dynamic equilibrium, Venezuela is crappy zoo with most of the animals sick or gone, incompetent and cruel zookeepers and no money for feed.

But who is selling the government USD for 10 Bolivars? I guess they are swindling from foreign investors trying to do business in VZ.

Let me rephrase my question. I wasn't asking how you can have it period, but how you can have it work. Of course governments can always try legislating insane policies, but if they go against basic tenets of economics, or science, or what have you, then they won't work.

It's pretty clear in this situation that they aren't working.

Are you following the tidings and the changes happening fast on Argentina? It's amazing.

Not exactly. In this case it is the government which is mandating the prices. While market prices would naturally rise due to increased demand, the statement "because people are drinking it too much" does not necessarily denote increased demand.

Market prices are one of the most essential aspects of a healthy economy. It is the lack of market prices which right off the bat dooms any form of socialism to failure. Any time you see large scale, perpetual shortages of any kind you can know there is some form of price fixing or market manipulation going on by the government.

Government is mandating the prices. It's not worthwhile to produce it. There is nothing related on demand here on this case.

In theory, which is easier to say than acknowledging the reality. Essentially it's ignoring Occam's Razor by introducing a third party (personal consumption) when the cause (general inflation) just as easily explains the effect (higher prices for everything - including milk).

It's not quite so "unbelievably cheap" when the minimum wage is $13/month.

http://www.bloomberg.com/news/articles/2015-10-16/venezuela-...

The minimum wage in the U.S. is somewhere around $1,200/month, so a rough comparison (gallon of gas as proportion of income) might be if gas cost $10.00/gallon here.

Brazil is absurd with prices, in the other direction than Venezuela, here everything is more expensive than in a first world country, except maybe meat.

Brazil is the only country that is rising gas prices while oil price is falling.

Also, Brazillian gasoline in Argentina is a third of the price of Brazil, this leads to Brazillians going to Argentina to smuggle Brazillian-made gasoline back into Brazil.

Yes, this is "efficient" as it sounds.

Also our gas prices are blamed by economists here as one of the biggest reasons we have a 11% inflation.

And this is all effect of our extremely bizarre and byzantine taxation model (instead of having a single VAT like in other countries, we have multiple taxes that apply to transactions, with each one having a complex set of rules, many of them being mandatory to be included in the price AND be calculated from the price that include them, thus resulting in recursive calculations).

Here is slighly outdated the list of taxes here, from the final product price (ie: a product that costs 100 and has tax of 30%, means that 30 go to the government, and 70 is distributed among the business involved).

  Gasoline: 53%
  Microwave: 55%
  Playstation 4: 72%
  console-ran software: 72%
  console dev kits: 72%
  Bank Interests: 26% (yep, when you pay interest to the bank
    you pay tax on it too!)
  Lamp: 48%
  Powdered Milk: 28%
  Clock: 53%
  Fishing Rod: 48%
  Toilet Paper: 38%
  Water: 38%
  Fish (to eat): 48%
  Cookies: 37%
  Chocolate: 39%
  Leather coat: 82%
  Beer: 62%
  Matress: 28%
  House: 48% (also, every time... if you buy a house, you pay 
  48% of its value in taxes, if someone buy from you, they 
  will also have to pay 48% in taxes again, leading to a 
  extremely rapid inflation in housing prices, leading to a
  extreme amount of homelessness, people needing to rent, and 
  power concentration in the hands of the actual home 
  owners... for example I once lived in a apartment I rented 
  from a single person that owned 60 entire apartment buildings).

Lowest tax I could find: Medicine and chemicals used by cattle ranchers: 13% (no surprise here, the most powerful politicians here are ranchers).

Highest tax I could find: Vodka (and some other distilled beverages): 83%

I read it as pointing out that if you take an extremely small number and increase it by a large percentage, the result is still pretty small.

Here, the price of gas has gone up by 6,000%. That's a lot! Except that in absolute terms, the price has gone from $0.02/gallon to $0.11/gallon. I can see larger fluctuations than that just by crossing the street in many places.

That was just the election for the National Assembly, which is our congress.

But now that the government lost control of the Assembly, they decided that everything that they decide must be approved by the Supreme Court.

Guess who controls the Supreme Court? Guess who removed and appointed members of the PSUV (govt party) to the Constitutional area of the Supreme Court in December, right after losing the Assembly elections? One clue: it wasn't the opposition.

Not very democratic is it?

It lost an election, but has entrenched its influence by selecting civil servants and doing other things to keep power.

As Wikipedia puts it: A little over a week after the elections on 15 December 2015, the outgoing National Assembly created the "National Communal Parliament" with President Maduro stating "I'm going to give all the power to the communal parliament ... This parliament is going to be a legislative mechanism from the grassroots. All power to the Communal parliament".[67] The move was described as an attempt "to sideline and leapfrog the incoming opposition-controlled National Assembly" and that such actions could possibly lead to more destability and polarization in Venezuela for the future.[68]

I am not being ironic, no. I just want the best for our neighbors.