Congratulations To Bolivarian Socialism: Venezuela Cannot Afford To Pay For Its Own Money
http://www.forbes.com/sites/timworstall/2016/04/28/congratulations-to-bolivarian-socialism-now-venezuela-cannot-afford-to-pay-for-its-own-money/#4c7d981e4544
Here is the latest installment in our ever popular series detailing the monstrous mess that is the Venezuelan economy. The country now seems to be at the stage where it cannot afford to actually purchase its own money. And this is one of the things which a country with a fiat currency, which Venezuela does have, is never supposed to be able to do–actually run out of its own money. This is a point often made in Modern Monetary Theory, or at least at the wilder edges of that MMT.
A central bank which makes its own money cannot run out of money because it can just make some more. Which is true, in a manner, but reality does have that annoying manner of announcing itself even in the middle of the most wondrous economic theories. Because what happens when that central bank or government cannot actually afford the paper and ink with which to print that money? Don’t laugh too loudly–there have been two examples just since the turn of the millennium. Agreed, you’ve got to really, really, screw up an economy to make it true but two groups have managed even that.
(Article does continue. Zim.)
Mad Poet Strikes Again.
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