Government Issue

Via zerohedge comes this update from Venezuela, where a decade's worth of socialism and "nationalization" has resulted in the inevitable: price controls, currency devaluation, and energy shortages in a OPEC state: Chavez Devalues Currency

President Hugo Chávez announced a sharp devaluation of Venezuela’s currency on Friday night, a move that reflects the financial stress faced by his government since the price ofoil, the country’s top export commodity, fell from its peak as a result of the global financial crisis.

The action, which Mr. Chávez had repeatedly ruled out in the past, came after Venezuela’s economy contracted by 2.9 percent in 2009. Hampered by disarray in the oil industry and nationalizations that have shattered business confidence, the economy is expected to remain sluggish this year even as other large Latin American economies show signs of vibrancy.

The new exchange rates are appropriately deranged:

The official value of the dollar, which has remained at 2.15 bolivars since March 2005, will now be fixed at 2.6 bolivars, a rate reserved for the import of essential goods such as food and medicine.

The “oil dollar”, pegged at 4.3 bolivars, is for non-essential goods, while a third floating rate – what has until now been known as the parallel rate and currently values the dollar at just over 6 bolivars – will be formalised and managed by central bank intervention.

As Tyler says, those are the "blueprints for full economic insanity." Venezuelans are already engaged in a frenzied run on every retail shop in the country in advance of the expected inflation. To add to the chaos, Chavez is also threatening anyone who raises prices - "speculators" - with immediate attention from the army:

Hugo Chávez, Venezuela’s president, on Sunday threatened to deploy troops and expropriate businesses that increase their prices following a steep devaluation of the currency on Friday.

“I want the national guard on the streets with the people to fight against speculation,” said Mr Chávez during his weekly television show, Alo Presidente.

“Go ahead and speculate if you want, but we will take your business away and give it to the workers, to the people,” he said, stating there was no reason for businesses to raise prices.

Venezuela is on the brink of something - chaos at the very least, not that you would know that from the American media. They only care about Chavez when he's insulting George Bush or giving them hope that this time the socialist experiment will work. Instead, it is going to pieces as anyone could have predicted when Chavez started seizing banks, oil companies, etc, rather than leave them to prosper/fail on their own.

What I'd like to know is this: where are all of those wealthy American leftists who gave Chavez their imprimatur? Is this the world that they wanted for The People whom they claim to be so concerned for? Ordinary Venezuelans are looking into the maw of hyperinflation, energy shortages, and the utter destruction of their savings. Is this the revolution that Bill Ayers, Oliver Stone, Danny Glover, et al. were cheering on? It must be, since they haven't uttered a word in protest.