Quote:
Originally Posted by WTF
We can crash almost any small country's economy with harsh economic sanctions.
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The United Socialist Party of Venezuela owns that, lock stock and barrel. You can't blame the hyperinflation on sanctions. The central bank numbers show inflation above 100% since July, 2015. That was before any sanctions on oil. And official inflation peaked at 344,000% per year in February, 2019, when China and some other countries were still officially buying oil from Venezuela. Unofficially they still are.
And why would a reduction in the amount of oil produced and sold by Venezuela cause inflation to go higher (and the bolivar to become weaker)? It seems to me like it should work the other way around.
Anyway, thanks to heroic efforts of the central bank and the United Socialist Party, officially inflation has declined back to the perfectly manageable level of 222% per year.
The graph is deceiving. When you have exponential or hyperbolic growth, like in the Bolivar/Dollar exchange rate, it makes a lot more sense to use a logarithmic axis instead of a cartesian axis. The inflation rate could remain stable at 10% or 15%, and the graph would still make it look like the Bolivar was falling off the edge of the earth, assuming the bolivar falls in lockstep with inflation
That said, I agree with you about sanctions. They enable people like Nicolas Maduro and Fidel Castro to blame all their problems on the USA. And sanctions on goods and services hurt the people of a country much more than their leaders.