Sunday, August 14, 2016

Comparing USA and Venezuela

Both USA and Venezuela have done the same thing: rack up debts and put the cost on the tab.  Uncle Sam uses credit to pay welfare claims, both corporate and personal, pay for wars, now everywhere and all the time, space programs and whatever.  When something is put on the tab, it means another party is extending credit.  The credit of Venezuela is up, USA is still being seen as the country of last resort, a place to which one can escape, so its credit is still pretty good, although getting shakier by the day.

Both countries rack up debt and say "put it on my tab."  The tab is only credit tallied up and must eventually be settled in money, gold and silver.  Of course credit is extended as long as those doing the lending believe the borrower can pay.  Now the tab the USA has run up cannot be paid by our present industrial base, and so it is being laid on the next generations, some estimated until the 3rd and 4rd, our great grandchildren.  Those lending credit to USA are pretty sure Uncle Sam will be in the saddle then, and has plenty of tricks left to cover his tabs, even if the tab cannot be paid right now.

Europe is a bit shakier than USA, and the part of the crazy immigration policies of the West is to appear open and "last resort" so others send their wealth to USA, investing in USA properties and businesses their hot money in large amounts, facilitated by people like Hillary's lawyer Khan.

Venezuela on the other hand, neither has the industrial base to cover the debts plus the government does not look like it will be around a long time.

It did not take long for oil-rich Venezuela to go bad.  It borrowed more than it could pay back, then its income source (oil) dropped in price, and it not likely to recover for a few decades.
Baying crowds shouted “We want to buy stuff!” as they grouped outside the store in the country’s capital, Caracas.
BBC journalist Vladimir Hernandez reports that many people approached him to say they had queued for 12 hours without being able to buy what they wanted.
And note this...
“The government has made some staples like flour and rice available at pre-inflation prices but there is not enough to go round.”
Well of course.  When prices are fixed low, demand increases putting pressure on supply, and the producers are not inclined to work for a loss, and not inclined to accept the credit of the buyer, the bankrupt government.

Lesson: While the Venezuelan government was offering "free $#!+" to win elections a good move would be to to steer clear of any and all of that largesse.  It was a trap.  Those who accepted the goodies are now lined up begging for what is not there.

Next, own the means of production.  Either B2B or B2C.  Either way, you'd be working in an organic economy, and either making money, at least doing better than everyone else, with far more options to trade and meet your needs while helping others, or not.  If not, if their socialist experiment economy was over then the failure of your organic business would signal that good and early.

Plenty of Venezuelans got out.  And are doing better than those left behind.  There are times you just leave.  Escape the chaos government brings, and escape to anarchy.

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