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There have been reports of Westerners eating at a decent restaurant, 
renting a hotel room, and hiring a prostitute all for under five US dollars. In other words, the Venezuelan economy has utterly ceased to function, except through black market transactions involving dollars.
What follows are excerpts from an article* written by Ian Bezek, as posted on Seeking Alpha.com under the title Stocks Finally Drop, Venezuela On The Brink Of Collapse – Bezek’s Daily Briefing.
A sad day looms for aging Marxist professors and hippy anti-free trade activists. Their beacon of economic inspiration, Chavez’s Venezuela, is about to expire. Chavez himself passed a couple years ago, but the country has remained on his stultifying economic path.
- The country’s currency has devalued 99% recently.
- It is prosecuting smugglers of powdered milk – the new frontier for illegal trafficking of granulated white substances.
- The country’s minimum wage, due to the brutal devaluation, is now the lowest in the world, recently falling even below that of Ghana. A month’s labor is now worth about $12, depending on the exchange rate, good for buying scarcely a few pounds of chicken.
Venezuela engaged in an ugly nationalism-fueled deportation campaign against Colombian immigrants in a move so heavy-handed, even Trump supporters would recoil.
As much fun as it is – as capitalists – to poke fun at insane socialist policies, there is an investing point here. Let me cut to the chase.
Venezuela faces elections in December, and unlike in Argentina, there’s little hope for the country to see things improve in the near future regardless of the outcome. The country is near bankruptcy, and is rapidly liquidating anything and everything.
- The country is dumping its gold reserves. Some have blamed part of the recent dump in the gold price on Venezuela’s frenzied selling.
- The…[country] withdrew even its contribution to the International Monetary Fund (IMF), an emergency measure that admits you’re essentially checking out of the world financial system.
- The state-owned oil company faces heavy debt repayments in 2016 and 2017. It is desperately trying to push them out a couple of years.
- Its bond prices have collapsed…
- Oil accounts for a jaw-dropping 95% of Venezuela’s exports, and its GDP is expected to nosedive by almost 10% this year. That’s the worst performance of a country in the whole world.
- Crime rates are among the worst in the hemisphere as life-threatening levels of poverty beset the population.
The government is demanding an $88/barrel oil price, saying that would be a fair level. Given that we’re at roughly half that now, the country is fried.
Default is inevitable, regardless of who wins the December election. Hopefully for humanitarian reasons, the anti-socialist faction will win. Regardless, you’re about to see the catastrophic complete economic and societal breakdown of one of the large oil states…
[The above excerpts are presented here by the editorial team of munKNEE.com (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here – register here) due to their exceptional quality.]*Original Source: http://seekingalpha.com/article/3670486-stocks-finally-drop-venezuela-on-the-brink-of-collapse-bezeks-daily-briefing?ifp=0