Venezuela circles the drain:

[EX500rider]

"Government control in Venezuelan is collapsing along with the economy and much else. This will apparently not lead to another regional war, but it is a huge and disruptive mess for Venezuela and neighboring countries. What is replacing government in Venezuela is a military dictatorship commanded by a small group of socialist politicians who have managed to maintain control over the major assets (oil production) while the rest if the economy collapses. Even with oil production increased there would still be a problem with the fact that the socialist government has destroyed the economy and

President Nicolas Maduro refuses to admit that his polices caused the mess. Maduro also refuses to enact known (to work) solutions for the current crises. An obvious case in point is inflation. Thus condition is caused by printing money that is not backed by taxes or loans (in stable currencies). Venezuela than uses this worthless money to pay government employees, or those who provide goods for the government. Anyone using this inflated currency finds that the value keeps dropping because there is no economic activity in the country to generate goods and cash to ensure that prices for scarce goods does not spiral upward (or inflate).

Now Venezuela has hyperinflation (an inflation rate of over a million percent a year.) Maduro got on TV recently and announced his solution: new bank notes with fewer more zeroes but worth the same. This is called redenomination and it does not work. For example back in 2008 the Zimbabwe central bank dropped ten zeros from the currency. The 10,000,000,000 (ten billion) Zimbabwean dollar bill became one dollar. This did not work and inflation rate soared to more two million percent a year. Before the “big lop” a 100 billion Zimbabwean dollar had been issued. By the time it hit the streets, the ten billion dollar bill could not quite buy a loaf of bread. The only cure for hyperinflation is to base your currency on a stable foreign one (like the Chinese yuan) and live with the fact that you are broke. Maduro is not ready to accept reality yet. This despite the fact that he has been avoiding the inflation problem for years. Eighteen month ago inflation hit 800 percent a year. Now it is over 50,000 percent and accelerating. The government food rations, which are supposed to be sold at a fixed price often have additional “transportation and handling” charged added. Sometimes a bribe is demanded. Everyone realizes the Venezuelan currency is worthless except the Maduro (and some clueless aides)


The Cuban Example

Maduro feels he is safe from armed opposition because he has not tried to prevent emigration. He may have learned that from his Cuban security advisors who noted that when the communists took over in Cuba during the late 1950s they let the middle class and most of the professionals leave, mainly for the United States. That eliminated many of the people who could organize and lead a counterrevolution. But Venezuela today is different from Cuba back them. Some senior officials still believe they can turn it all around and do what Cuba did. But Cuba is an island and was able to create its stable dictatorship in a different time (the 1960s), because Russia was able to provide very professional and effective help in establishing a communist police state. Before the revolution the Cuban market economy had made Cuba the wealthiest nation in the Caribbean. That was destroyed during the 1960s but the Russians provided large annual subsidies (oil, food and cash) to keep everyone fed. Venezuela has access to none of that and, despite the huge oil reserves, is facing a catastrophic collapse. Venezuela has no wealthy and heavily armed patron. What Venezuela does have is massive corruption, especially among the senior officials. There are a growing number of armed men (pro-government militias) and a growing number of criminal gangs that the government cannot afford to feed. If there is a war in Venezuela it will likely be between the armed haves and the armed have-nots. Venezuela already has the highest crime (and murder) rate in the region (and perhaps the world). While some of hungry gangsters and militiamen are migrating the neighbors are wise to this problem and violent migrants are not welcome and treated harshly when discovered. This is why Maduro is so obsessed with loyalty (even at the expense of competence)"

http://strategypage.com/qnd/pothot/articles/20180801.aspx