Our friends at Caracas Chronicles had a piece on the economic outlook in Venezuela through the prices around traditional Christmas food taking the title from the most popular item, the hallaca, hence…Hallacanomics. The delicious giant Venezuelan tamale’s cost this year,in bolivares (local currency) is up 1,000% this year. With the relatively recent de facto dollarization occurring in Venezuela the hyperinflation (in dollars) isn’t nearly that bad. Please remember that the average monthly minimum wage in Venezuela is about $2, a far cry from the $200 a month that Hugo Chavez lamented was unacceptably low when the Chavistas took power two decades ago. When you think about the minimum wage remember that the UN standard for a society in extreme poverty is a dollar a day so the average Venezuelan doesn’t even make 10% of that. They would need to earn 10 times the current minimum wage just to move up to the level of extreme poverty!
That said, here are the numbers.The traditional Christmas plate, consisting of hallaca,pernil (roast pork),chicken salad, and pan de jamon ( a wonderful holiday bread stuffed with ham,raisins,and olives) has a price range of $3-$20 with the high end places charging up to $35. Just wrap your head around that one for a sec. The average worker in Venezuela has to work a month and a half just to afford the holiday meal at even the cheapest place. If they wanted to enjoy themselves at the high end joint they would have to save up for a year!
With all the talk the Maduro regime puts out there about Venezuela increasing production the government has put in place a “no tax on imports” policy that favors importers over local producers. They had to do this to avoid the crippling shortages caused by their ill conceived price controls.(all price controls are ill conceived,by the way) Price controls have never,I repeat never worked…anywhere…at any time. When local producers can’t afford to sell products at the fixed price and still make even a slim profit they have no choice. Rather than take a loss on each item they produce they simply don’t produce and find another way to make a living, or simply leave as 6 million Venezuelans have done to escape 21st Century Bolivarian Socialism. Two examples from the holiday menu are pan de jamon, currently ranging from $6-$25 (remember that $2 a month minimum wage) and grapes, coming in at $3-$15 per kilo. Merry F—ing Christmas!
ABC News also had a piece on the cost of things this holiday season. Among other things they looked at clothing prices. The good news is that dollarization has slowed hyperinflation, if you have dollars that is. Clothing prices in dollars are up about 40% this year. To those of us in the real world that seems like high inflation but just a couple of years ago inflation was over a million % …and,at the time, transactions in dollars were illegal. So here we are. With a monthly minimum wage of $2 and an average Christmas Bonus of $13 the Christmas shopping list better be a short one. Merry F—ing Christmas!
And speaking of production, Poultry World reports poultry production in Venezuela is down 72% since 2012, the year before Maduro took power. The Chavistas are economically illiterate…and proud of it. Remember a couple of years ago when Maduro announced a completely new currency and economic model? He proudly proclaimed the the new plan was arrived at “without any input from anyone in the economic or financial community and in keeping with socialist values.”
But we still have hope (not) for a Merry Christmas. The government announced it was giving out an “Hallaca Bonus”, to help people enjoy the holiday season, to all public employees. It was issued in bolivares but after you do the exchange rate shuffle to real money the “Hallaca Bonus” works out to about 38 cents. Once again … Merry F—ing Christmas! And Viva La Revolucion!
Also relating to money we have UCV (Venezuela Central University) celebrating it’s 300th year. It was founded when Venezuela was still a Spanish colony. I wonder what “The Great Liberator”, Simon Bolivar, would think about the modern enslavement of his people by the Chavistas? How can the Chavistas even invoke his name for their “21st Century Bolivarian Socialism”? But I digress… While the leaders celebrated the longevity of UCV the students protested the suspension of classes. They didn’t,however, protest for better wages for their professors which currently stands at about $8 a month. The Latin American average is about $3,000. UCV, a massive university, has lost 1,200 professors in the last four years and has lost 1/3 of it’s students.
But the economic news isn’t all bad everywhere in Venezuela. In the state of Guarico food production is up (if you can believe the numbers) 150% (from what they didn’t say) and the gas situation has noticeably improved. They announced they plan to plant 300,000 hectares in 2022.
Also on the money front we have news about real money. I’m not talking about dollars or any other fiat currency. I’m talking gold which as we know is in short supply in Venezuela ever since the nation’s gold reserves were mostly repatriated to Venezuela by Chavez…to protect it for “the people”. While the Chavistas were “protecting” it, somehow, those gold reserves went from about $32 billion down to under $5 billion today. It’s no wonder why Maduro is pressing so hard to get his hands on the over $1 billion in gold being held in vaults in the UK. They won’t release it to Nicolas and his cronies as the UK government officially recognizes Juan Guaido as the President of Venezuela. It finally reached the Supreme Court after lower courts refused to acknowledge Maduro and the Chavista’s claim to the gold The Supreme Court ruled that it had no standing in the matter and that the decision must be made by a lower court. It doesn’t look good for Maduro’s chances to get his hands on the $1 billion in gold as the lower court has already denied him in favor of Guaido. We can expect plenty of anti- colonialist,imperialist,oligarch rhetoric not to mention those evil right wingers trying to bring down”The Revolution.”
There seems to be a lot of money related news which gives us a welcome break from being bombarded with news regarding the recent,totally fraudulent elections in Venezuela.No worries though, the revote on the Barinas governor’s race, which was stolen from opposition winner, Freddy Superlano, is right around the corner. But first,remember the recent stories about the bond vultures circling for so long but now descending on the few remaining assets of the Venezuelan government? Well, Law360 reports that bondholders are pressing for payment of $118 million in a CITGO attachment fearing that a delay jeopardizes payment. Also mentioned was PDVSA (government owned oil company and parent company of CITGO) protesting a $40 million award which they claim is unfair….really?
And remember us telling you that Telesur (government media) never reports anything of substance,at least not pertaining to Venezuela? Here’s the latest… “Venezuela and Belarus Install High Level Commission in Caracas.” Great, two despotic regimes strengthening their ties to work more closely together. (To enrich themselves and continue the suffering of their respective peoples?)
It was also reported by Belsat that Maduro has announced a direct air connection between Venezuela and Belarus. So, we can add this to the great news from last week about a pending direct air connection between Nigeria and Venezuela. Again, I say Great!
And then we have Chavista deputy (representative) of Maduro’s fraudulent National Assembly, Gladys Requena, saying they have passed 55 laws and blocked 33 “including some regarding Human Rights.” Great….
And in news that we knew was coming,News18 reports that Mexico will officially begin requiring visas for Venezuelans 15 days after it’s officially published.
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