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I'm sure Karls Marx and Friedrich Engels would had been very happy with the Venezuelan paradise.
Inflation is expected to hit 1,000,000%. Marvelous, just marvelous! Just what the poor need in order to live a life with dignity.
The people are definitely showing their appreciation for turning Venezuela into a socialist paradise by voting with their feet. I don't get it. Why are they leaving the socialist paradise in favor of the capitalist Colombia? What is going on? Don't they know that the socialist government is the one that has their well being in mind? Those emigrants must be crazy!!!
International Monetary Stability Act
A bill died in congress to try and help these kind of situations. When the local currency becomes worthless a Latin American country could approach the USA and say they want to "dollarize". Instead of selling them dollars at face value, we would recognize that cash is just secure paper and provide this cash to them at a reasonable rate that represented it's cost to produce. In exchange the country would have to sign some agreements to assure the US that the cash wouldn't be used to launder drug money or that it would be given to a handful of powerful people.
The US dollar became legal tender in Ecuador March 13, 2000, and sucre notes ceased being legal tender on September 11. The largest denomination sucre banknote was exchanged at US$2. Ecuador was forced to shoulder the burden of acquiring the US cash at "face value" because the aforementioned bill did not pass. Bottom line was the situation was so desperate that the President felt he had no choice but to convert the currency.
The decision to do this would not only help the people in the country, but would have benefits to the USA. The least of which is it would help stem a tide of hungry illegal immigrants in a suicide dash to get into the USA.
But the official statement follows
Quote:
Congress finds that--
(1) monetary stability is a prerequisite for strong long-term economic growth and increasing standards of living;
(2) many emerging market countries lack monetary stability and have therefore suffered economic and financial problems that suppress economic growth and living standards, including financial fragility, inflation expectations that are built into labor markets, and high and volatile inflation rates and interest rates;
(3) many emerging market countries have used pegged exchange rate systems to try to foster monetary stability and have experienced temporary periods of higher economic growth and lower inflation followed by drastic balance of payments problems, steep devaluations, and major losses in international reserves;
(4) emerging market countries that have adopted currency board systems have enjoyed higher rates of economic growth and lower interest rates, although interest rates have remained higher for loans denominated in the local currency than in the anchor currency;
(5) since the financial and economic crisis that struck Asia in 1997, there has been growing international interest in official dollarization, whereby a country would substantially or totally eliminate its domestic currency and adopt the United States dollar as legal tender;
(6) official dollarization would let a country import monetary stability, thereby bringing inflation and interest rates down toward the levels of the United States;
(7) official dollarization would make it impossible for governments to print domestic currency to pay for government programs, thereby promoting fiscal discipline;
(8) official dollarization would make it easier for people to conduct financial transactions in the currency they use for daily commerce, thereby promoting deeper financial markets;
(9) lower inflation, interest rates, and inflation and interest-rate volatility, greater fiscal discipline, and deeper financial markets would increase long-term economic growth and raise living standards in emerging market countries;
(10) by increasing trade and investment flows and decreasing the need for foreign assistance, greater economic growth and higher living standards abroad would serve the interests of the United States;
(11) countries that become officially dollarized would lose seigniorage (the profit from issuing a currency) and this is a significant barrier to official dollarization;
(12) official dollarization would increase the seigniorage earnings of the United States;
(13) it would be mutually beneficial for the United States to encourage official dollarization by offering to share with countries that become officially dollarized a portion of the extra seigniorage earnings that the United States would earn; and
(14) encouraging official dollarization complements ongoing efforts by the United States to strengthen the international financial architecture.
The amount of Venezuelans that are leaving the country is insane. In the last three years over 2 million people left the country.
These are the countries that so far received the bulk of Venezuelans emigrants. The first graphs is the exodus in absolute numbers, while the second map is of the growth rates of the Venezuelan communities in the countries where they are headed.
Only a handful of countries in this hemisphere (mostly Caribbean countries such as Jamaica, Cuba, Haiti, etc and Central American countries like Guatemala, El Salvador, Honduras, and Nicaragua) are not suffering a large influx of Venezuelans. In a way it makes sense, because Venezuelans are moving to countries with economies that offer plenty of opportunities for work as professionals/sales people or business opportunities.
The growth rate during the last 3 years of the Venezuelan community in Peru is simply insane.
In countries such as Panama, Colombia, Dominican Republic, and Ecuador the Venezuelans are the fastest growing minority by a long shot.
For those of you that don't understand Spanish: Estados Unidos or EEUU = United States or USA, España = Spain, Italia = Italy, Rep Dominicana = Dominican Republic. All other countries are easily translated to English by anyone that doesn't know an iota of Spanish.
Last time I visited Peru (last summer) the difference was shocking. There were tons of Venezuelans on the street selling candies and arepas. A lot of Venezuelan flags hanging from windows
Last time I visited Peru (last summer) the difference was shocking. There were tons of Venezuelans on the street selling candies and arepas. A lot of Venezuelan flags hanging from windows
With a near 15,000% increase in Venezuelan migrants I'm not surprised. However now that Ecuador, Panama and Brazil have tightened their borders this leaves Colombia to bear the brunt and its seemingly only about to get worse.
Even if Colombia decides to strengthen its border controls, that border is so long and large swathes are devoid of people and infrastructure that it will not stop a horde of desperate people from entering illegally.
Now that Colombia is finally in relative peace, its economy is developing, and it has acheived a nice growth rate of its tourism industry plus has shaken off the horrible international image... now the refugee crisis can potentially socially destabilize the country. SMH
There is still time to prevent this, but the only way is through international intromition in Venezuela’s internal affairs.
International Monetary Stability Act
A bill died in congress to try and help these kind of situations. When the local currency becomes worthless a Latin American country could approach the USA and say they want to "dollarize". Instead of selling them dollars at face value, we would recognize that cash is just secure paper and provide this cash to them at a reasonable rate that represented it's cost to produce. In exchange the country would have to sign some agreements to assure the US that the cash wouldn't be used to launder drug money or that it would be given to a handful of powerful people.
The US dollar became legal tender in Ecuador March 13, 2000, and sucre notes ceased being legal tender on September 11. The largest denomination sucre banknote was exchanged at US$2. Ecuador was forced to shoulder the burden of acquiring the US cash at "face value" because the aforementioned bill did not pass. Bottom line was the situation was so desperate that the President felt he had no choice but to convert the currency.
The decision to do this would not only help the people in the country, but would have benefits to the USA. The least of which is it would help stem a tide of hungry illegal immigrants in a suicide dash to get into the USA.
But the official statement follows
El Salvador has dollarized their legal tender too.I don't know when Venezuela would bounce back but it doesn't look like they would dollarize their currency ,since tenuous relations with Venezuela and the US have long existed.They still don't trust Maduro either.
Dollarization would probably result in Venezuela incurring more external debt,since the currency in their foreign reserves would be rendered worthless.
Amateur videos such as this one certainly help push many Venezuelans to certain countries.
This video is of a Venezuelan that moved to Santo Domingo, Dominican Republic and is giving tips to other Venezuelans in Venezuela about moving to DR and with how much money can a comfortable middle class lifestyle be achieved in Santo Domingo. He even give tips on the best way to find jobs and even tell his fellow Venezuelans that there's a lot of money in DR and with that comes a lot of business opportunities.
Obviously the video is in Spanish, but it serves as evidence that Venezuelans are flowing to countries where other Venezuelans have gone and are doing well. This guy packed up and moved to the Dominican Republic with his entire family.
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