We have been following the unfolding disaster in Venezuela where the socialist dream of Hugo Chavez and his dim-witted successor Nicolas Maduro has reduced a major nation to virtual starvation. The central planning of Maduro’s nation has destroyed the oil-based economy and triggered inflation that is projected to reach 1 million percent within the year. Maduro however continues to follow the absurd economic model of Chavez and his chief ally, Cuba (another economic basket case). Now in a move that will worsen an already horrific situation, Maduro has ordered five zeros to be simply erased on the inflated currency while increasing the minimum wage by over 3000 percent.
So you solve inflation by dropping zeros and increasing minimum wages. That is obviously a cosmetic as move that will only exacerbate the situation. The new “sovereign bolivar” will replace the earlier “strong bolivar” but will be tied to the Maduro’s failed cryptocurrency, the petro.
The increase in the wages does little when you are pushing against a one million percent inflation rate — and doing nothing serious to deal with it.
Maduro is a former bus driver who is simply repeating the failed approach of Chavez who, in 2008, stripped off three zeros but did little to slow the crippling level of inflation.