You guys are mixing up inflation with devaluation. From Wikipedia, ‘Devaluation’ means official lowering of the value of a country's currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency."
The Bolivar has a fixed exchange rate mandated by the government. Devaluation refers to a change in that rate. Naturally there is also a black market rate and that behaves as you describe.
"“The big winner ends up being the state,” said Asdrúbal Oliveros, an economist at the Caracas-based consultancy Ecoanalitica. The move will relieve pressure on a fiscal deficit variously estimated between 7 and 15 per cent of gross domestic product, by increasing the state’s net revenues by almost 4 per cent of GDP, or $13bn at the new exchange rate, according to Mr Oliveros.
The devaluation also cuts the dollar value of domestic debt from $42.9bn to $29.3bn, leading analysts to expect an increase in prices of Venezuela’s foreign debt.
But while the government gains, most Venezuelans lose out, with Ecoanalitica estimating an 8 per cent fall in consumers’ purchasing power. Until the government next decrees an increase in minimum wages, the relative value of workers’ salaries will fall."http://www.ft.com/cms/s/0/12e9f32e-739e-11e2-9e92-00144feabdc0.html#axzz2Kc3a6XGjThis is one of the things for which democracy alone would not make any difference:people just entrust some politicians/great figures to "create " happy lives for them.
"C'mon, as long as I get some free food stamps, who cares about where the government gets the money? Oh, some fucking blood-sucking rich-as-hell investors? It's even better, they deserve it!"
the other thing i wanted to say about this is that do you really believe the politicians who were involved in this devaluation, even if it was just Chavez himself, didn't front run this? i mean come on, human greed shows no boundaries and i assume he positioned himself well before this formally was announced. Chavez has a great history of stealing and he stole my whole investment in Crystallex many years ago by nationalizing the gold mine.
THIS is what i'm talking about. anyone or any entity that is given control of the money supply will pervert and manipulate its supply to their own advantage whether you call it a devaluation or just plain inflation.
i mean, look at our own politicians. did you know they are allowed to trade/frontrun their own legislation? that is just plain ridiculous.
