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reuters: Devaluation ups stakes in Venezuela election year


Destino

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http://www.reuters.com/article/idUSN096521320100109

CARACAS, Jan 9 (Reuters) - Venezuelans rushed to the shops on Saturday, fearful of price rises after a currency devaluation that will let President Hugo Chavez boost government spending ahead of an election but feeds opposition charges of economic mismanagement.

In a bid to jump-start the recession-hit economy of South America's top oil exporter, Chavez on Friday announced a dual system for the fixed rate bolivar.

It devalues the currency to 4.3 and 2.6 against the dollar, from a rate of 2.15 per dollar in place since 2005, giving the better rate for basic goods in an attempt to limit the impact of the measure on consumer prices.

The opposition seized on fears that prices for imported goods will double as shoppers formed lines of more than a hundred people outside some stores in the capital Caracas.

"It was a Black Friday, tinted red," said sales executive Diana Sevillana in reference to the crimson color of Chavez's socialist party. She stood in a line of 30 people outside an electrical goods store in a middle class neighborhood.

Welcome to Crazinomics. Need more money Mr. Socialist? Well then devalue the currency so you can technically have "more" of it.

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What I want to know is how does a nation that rich in oil have a government lacking money?

Ask California ,or the US;)

You can always spend more than you take in,especially when the price of oil drops by half...thieving incompetents

Whats really funny is the energy crisis there and the rationing.

http://news.yahoo.com/s/ap/20100109/ap_on_bi_ge/lt_venezuela_electricity_2

But at least their stock market is rallying:hysterical:

http://www.independent.co.uk/news/world/americas/chavezs-snap-devaluation-sparks-panic-in-the-aisles-1863904.html

"Right now, there is absolutely no reason for anybody to be raising prices of absolutely anything," Mr Chavez said on his weekly TV show. "I want the National Guard on the streets with the people to fight against speculation. Publicly denounce the speculator and we will intervene in any business of any size." To audience applause, the president added that the government would take over shops and give them to their workers if price rises were discovered.

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