Venezuela devalues currency around 40% overnight

[oyarde]

Would have to be some sort of price supports or price fixing. Trying to keep essencials like food more affordable. But that will add to their budget deficit they are trying to reduce. Venezuela's economy is highly distorted by the government already. Chavez has been using oil revenues to create his socialist state and to buy votes but he is seriously messing things up for them. If a future government decides they can't afford all the things Chavez has been spending on there will be massive social shocks in the country.

That would be my guess , they will price control common food staple items.

[Carson]

Want to see how devaluing currency correlates to a rising stock market index? Check out the 1 month chart of their (already insane looking) stock market. In the last 3 days leading up to this official devaluation their stock market has risen about 15%.

http://www.bloomberg.com/quote/IBVC:IND/chart

Click on the five year tab.

I remember seeing the stock market and commodities reach a certain point here that it seemed to yank the slats out of honest business and its profitability. Lots of us went home or had our hours cut.

About a year and a half ago and after what I'm guessing was all of the defaulting on loans caused stock market to pull back and commodities to fall. The dollar once again increased in value enough for some employers to call people back. Traffic picked up some on the morning commute.

Anyway the stock market and commodities are again rising. The value of the dollar is again falling. I can't help wonder if we are going to be pushed over the edge where working is now longer profitable.

I wonder what Venezuela's devaluation ceiling was in regards to earning a living? I would think with they would now be way past any point of a market correction bringing them back.

[Carson]

That would be my guess , they will price control common food staple items.

I remember when a president here in the U.S. tried to fix the price of gas.

Fixed us good.

[oyarde]

I remember when a president here in the U.S. tried to fix the price of gas.

Fixed us good.

I bet that price is already fixed there.They meddle with beer pricing too , if I recall.Probably be moving to rice & beans now ...