Inflation and price controls are siblings. First government inflates, then they place the blame on the public for the ramifications of their actions, thus justifying price controls. Yet the consequence of this inflation price control feedback loop has been to create shortages
The toilet paper shortage in Venezuela is great example.
From Reuters:
A Venezuelan state agency on Friday ordered the temporary takeover of a factory that produces toilet paper in what it called an effort to ensure consistent supplies after embarrassing shortages earlier this year.Critics of President Nicolas Maduro say the nagging shortages of products ranging from bathroom tissue to milk are a sign his socialist government's rigid price and currency controls are failing. They have also used the situation to poke fun at his administration on social media networks.A national agency called Sundecop, which enforces price controls, said in a statement it would occupy one of the factories belonging to paper producer Manpa for 15 days, adding that National Guard troops would "safeguard" the facility.
Politicians play by people’s economic ignorance or manipulates the public’s brains via propaganda
Government supporters laud efforts by Maduro, the successor to late socialist leader Hugo Chavez, for maintaining tough regulations of private businesses.They blame unscrupulous merchants for hoarding products to make quick profits, and celebrate the socialist government's legacy of social assistance programs.
Venezuela’s stock markets has been on fire. The Caracas Index has been up about 260% year to date and 560% since 2012.
Yet Venezuela’s soaring stocks haven’t been signs of a booming economy as manifested by(e.g. shortages of many basic items including toilet papers)…
Instead they are symptoms of hyperinflation or a unfolding currency crisis, as manifested by another symptom the crashing the currency, the bolivar.
The average Venezuelans seek titles to capital goods or proxies to real assets as haven from massive loss of purchasing power.
As one would note, interventions breed interventions until the economy eventually collapses.
1 comment:
Nannycrats, such as Sundecop, are now the economic leaders. Christ has been working and continues to work in dispensation, that is in the management plan of God, to complete and fulfill all things in every epoch, era and time period, as presented by the Apostle Paul in Ephesians 1:10. He is laboring to make diktat complete in the age of authoritarianism. Gone is free enterprise, it is simply an epitaph on the tombstone of the age of liberalism, as statism governs and is the legislator of economic value and is the legislator that shape one’s means and one’s ends. Authoritarianism features a new trust; liberalism featured trust in bankers, carry trade investing and credit, in particular nation state Treasury debt; but authoritarianism features trust in statist nannycrats, totalitarian collectivism, public private partnerships and debt servitude.
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