Latin America
Related: About this forumVenezuela’s Inflation Nightmare Signals Default May Come Sooner
Venezuela is about to earn another ignominious distinction.
Long home to the worlds highest inflation rate, the country now is set to become the site of the 57th hyperinflation event in modern recorded history, says Steve Hanke, professor of applied economics at Johns Hopkins University. While the feat may be little more than a formality in a country where Hanke calculates annual cost-of-living increases already run at 772 percent, its the latest sign a debt default may be closer than traders previously thought.
With Venezuelas currency losing 32 percent of its value in the past month in the black market, according to dolartoday.com, and falling oil prices throttling the cash-starved nations biggest revenue source, the government may run out of money to pay its debts by year-end, according to Societe Generale SA. Derivatives traders have ratcheted up the probability of a default within one year to 63 percent, compared with 33 percent just two months ago.
Theyre very close to hyperinflation, Hanke, who wrote a book on hyperinflation in Zimbabwe, said by phone from Baltimore. When you have a domestic currency that is withering on the vine, it becomes more problematic servicing foreign debt.
http://www.bloomberg.com/news/articles/2015-07-15/venezuela-s-772-inflation-means-default-may-come-a-lot-sooner
PoliticAverse
(26,366 posts)and just print money instead.
Marksman_91
(2,035 posts)This is more like a case of what happens when you have a bunch of corrupt incompetent and radical delinquents in power.