Venezuela decrees new price controls to fight inflation

[Zorro]

Source: Reuters

Venezuela on Friday decreed a new price control law that sets limits on company profits and establishes prison terms for those charged with hoarding or over-charging, part of socialist President Nicolas Maduro's efforts to tame inflation.

Maduro, who was elected last year to succeed the late Hugo Chavez, blames a 56.2 percent jump in consumer prices in 2013 on an "economic war" led by political adversaries, while critics call it evidence of the failure of Venezuela's state-driven economic model.

The Fair Price Law, which carries out many of the same functions as the almost identically-named Fair Price and Cost Law of 2011, appears to unify a disparate set of controls that were first created by Chavez in 2003.

It sets a maximum profit margin of 30 percent and requires firms to obtain "fair price certificates" to access dollars through the country's currency control mechanism.

Read more: http://news.yahoo.com/venezuela-decrees-price-controls-fight-inflation-182527254--business.html

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Oh yeah...this will turn out well.

[hack89]

1. VZ continues their spiral down the toilet. Nt

[Sgent]

18. And that's ugly spiral

given the toilet paper shortage

[redixdoragon]

2. As though we're doing so great doing the exact opposite

Runaway profiteering, hoarding and such are just dandy here, that's why we're all doing so well thank you.

[7962]

5. The only thing in short supply because of hoarding here is the "hot" Christmas gift every year. nt

[madville]

6. Not seeing many shortages here in Florida

Except .22LR ammo, can't find that stuff anywhere

[ronnie624]

16. The real problems caused by the US system,

are hidden by propaganda that portrays empire and the concentration of 'wealth' and resources as morally legitimate and perfectly normal. Many people suffer as a result of the US system, they just aren't you, so the problems are not readily apparent. It takes awareness and some empathy for other people in the world to understand.

[ileus]

23. I haven't bought one round of 22 since last May...

I did give a box of 225 away to a friend when she bought a 22 for self defense.

[Nanjing to Seoul]

8. the 85 richest people in the world have more than the poorest 50% worldwide

It works great, if you're in the 1%.

[Progressive dog]

12. No shortages here in NY that

I know of.

[ripcord]

3. Because it worked so well before?

[7962]

4. Just more of the same to make it look like the govt is doing SOMETHING.

Just re-name the same crap and expect it to smell better. Ha.
Eventually we will see a REAL revolution. And Maduro wont like that one.

[delrem]

7. Price controls aren't necessarily "Marxist", and aren't necessarily wrong. nt

[Progressive dog]

13. Price controls worked well for Nixon and Ford

or not. There is an easy solution, stop printing money if there is nothing to buy.

[AdHocSolver]

9. Venezuela should copy the U.S. method of hiding the true inflation,

The U.S. uses a Cost-of-Living index that hides inflation to pacify its population.

For example, not too many years ago, one could buy real tomatoes for 39 cents per pound. This past summer, tomatoes cost anywhere from $1,99 per pound to $3.99 per pound for heirloom or organic tomatoes. (It used to be that at one time all tomatoes were "organic".) Not only that, many fruits and vegetables are imported, for example from Mexico.

Fifteen years ago, I paid around $10 for a nice imported dress shirt. Today, a comparable imported dress shirt lists for $34.95.

Even though most everyday goods are imported from low wage countries, the prices are either comparable or often greater than what they were 15 to 20 years ago when the merchandise was made in America. Why is that the case?

One reason is transportation costs driven by higher fuel prices. If the products were produced locally, the extra money we are paying for transportation of imported goods would support Americans, and without these high transportation costs, the prices would likely be no higher.

The other reason for higher prices on goods made "there" and sold here is the higher profit margins extracted by the corporations since the big corporations effectively eliminated competition through such devices as NAFTA. If the so-called Trans-Pacific Partnership goes into effect, we can expect to see immediate price increases on imported goods that could "knock your socks off."

Venezuela has a government that understands how the corporations are ripping off the population and is trying to help its people. The U.S has a government that imposes agreements such as NAFTA, gives tax breaks to the rich, and bails out its banks.

[Progressive dog]

14. CPI by anecdote,

what a clever idea. Who needs statisticians, we've got a shirt price.
Maybe they could just pretend there was no inflation in Venezuela too. I wonder why they haven't tried that.

[MyNameGoesHere]

10. Thirty percent! I would have set it a 20.

Jail time if they don't bring it under within a business quarter. Then forfeiture of the company if it continues. These new socialists are too free market orientated for my tastes.

[FrodosPet]

11. Or just nationalize them today

Send in the troops and throw the managers out. Let loyal party members run the enterprises under socialist principals. If any irreplaceable people complain or try to quit, draft them into a "People's Economic Development Corps" and threaten them with jail if they don't perform their job.

Personally, I don't think it is a good idea, but it does seem to be the direction they are going.

[MyNameGoesHere]

15. Oh dear, someone reads or watches Rueters

and or other "pro" democracy news outlets.

[Psephos]

17. Why don't you speak to the argument instead of the person? n/t

[Yo_Mama]

21. And when there are no goods in the stores

you would pat yourself on the back and call it a success?

It might be well to remember that Einstein quote. Doing the same thing over and over and expecting a different result is the definition of insanity.

http://www.bloomberg.com/news/2014-01-08/hunt-for-food-sends-venezuelans-to-colombian-border-towns.html

Things are so bad that the central bank has stopped publishing statistics!!!
http://www.bloomberg.com/news/2014-01-09/venezuela-in-data-denial-after-inflation-tops-50-andes-credit.html

When you read crap like that from the central bank, everyone grabs their money and runs - it's going to be a very rough year in Venezuela:

In the monthly inflation report released 20 days after the Dec. 10 legal deadline, the central bank said that the government’s political opposition destabilized the economy after “the death of our leader Comandante Hugo Chavez.” The central bank said it’s working on economic indicators that better reflect the “new economic and social reality in the country.”

When the Chavez regime first came in, they were basically expropriating the rich, and the poor loved it. But now it is the poor who are pulling goods out of the country to get money to live, so it's game over. Controlling the prices just means there will be even less stuff in the stores.

FUBAR - and now they can't even get plane tickets:
http://www.chinapost.com.tw/international/americas/2014/01/26/399257/Currency-issues.htm

This only ends one way:
http://www.tradingeconomics.com/venezuela/money-supply-m1

[MyNameGoesHere]

22. When grasshoppers carry machine guns argument?

Hasn't happened so right then and there I stopped reading your post.

[quadrature]

19. see a new line? get in line!

does not matter what is for sale.

the idea is to get rid of your money.
buy anything, even if you don't need it.

[freshwest]

20. Looks like Libertarianism and the Invisible Hand are not appreciated in Venezuela as in the USA:

To which I say, it's time to kick out the Hand attacking governments. Libertarianism defines the 'free market' as the only determination of success. But humans join together in legislative union to represent their interests, not the digits on a profit and loss sheet. That measures dead things, not the living.

The Fair Price Law, which carries out many of the same functions as the almost identically-named Fair Price and Cost Law of 2011, appears to unify a disparate set of controls that were first created by Chavez in 2003.

It sets a maximum profit margin of 30 percent and requires firms to obtain "fair price certificates" to access dollars through the country's currency control mechanism.

So, they wrote a law and now they are clarifying it to achieve the original intent of the law. that passed without American commentary over a decade ago. Internet warriors go ape-shit over every legislative tweak to existing law passed in the USA of good intent, as if the original intent or the improvement doesn't matter, just biased news reports.

Meh. There is lack of substantive cause to condemn from us who have not been elected to hold a national office, have not made laws, nor have the job of keeping a government running. I'm not finding an illumination on these threads for the most part, just a lot of smoke and no mirrors to show our purposes.

JHMO.