Sunday, January 18, 2009

Things must be getting bad in Venezuela

Analysts: Tapping reserves risky for Venezuela

Chavez has to take control of $12 billion in international reserves.

In doing so, he will have money for a while, but the odds of Venezuela getting more money in the future go waaaay down. The credit markets are supposed to be tight anyway, any movement to make someone trust you less is a bad idea.

Venezuela will end up with even higher inflation. 30.9% is EXTREMELY high if you ask me. (30.9% in 2008).

Chavez thinks that more cash for social spending will get him the votes to get to be president for life (ie: Dictator), but in the end, if the economy sucks and inflation is very very high, people will turn against him.

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