Venezuela: The Party is Over

[protocol rv]

The days of the strong bolivar and the ability to import goods at low prices are over.

"The party is over

The foreign exchange puzzle reflects an imbalance in the economic policy. To inject US dollars in the foreign exchange swap market, the government should continue issuing bonds. This increases Venezuela's debt in US dollars, which has climbed 119 percent between 2004 and 2009, from USD 28 billion to USD 61.63 billion.

"Economics says that you cannot get into debt all the time, that is totally impossible," said economist Gustavo Rojas.

Another option is selling US dollars from the foreign reserves, but transfers to the National Development Fund (Fonden) have led to a 24 percent decline in foreign reserves.

Therefore, the government has decided to restrict the parallel market, so that the economy uses only the US dollars approved by the Foreign Exchange Administration Commission (Cadivi).

"We are going to import only what we really need," Finance Minister Giordani said on Tuesday"

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What we really need...a new government led by people with common sense. :puke: