Last week we focused on Canada, and the economic crises that has exploded across that country due to low oil prices, and massive debts created in the building of a housing bubble. And with markets crashing all across the world over the first 17 days of 2016, the situation in another oil producing country is also dissolving into economic crisis.
On Jan. 15, Venezuelan President Nicolas Maduro declared a 60 day state of economic emergency for the South American nation in what appears on the surface to be an escalation of capital controls that have already destroyed their economy for almost a decade.
President of Venezuela Nicolas Maduro has signed a decree on a state of economic emergency to address the protection of social rights amid the grave economic crisis in the Latin American country, local media said Friday.
Maduro said earlier this month that the measures would be aimed at increasing the fundamental indicators of production, product distribution, commercialization and price controls.
The announcement came two days after Venezuela’s oil price had dropped to $24 a barrel, the lowest mark in 12 years. Up to 96 percent of Venezuela’s budget depends on oil revenues, which has a negative impact on the socio-economic situation in the country. – Sputnik News
Venezuela has long been in a downward spiral ever since the previous leader Hugo Chavez transitioned the nation from a more open economy into a Marxist hell where prices and production were both nationalized and tightly regulated. This of course created the inevitable conclusion for the Venezuelan economy, where Soviet style lines emerged for all types of items such as food and toilet paper.
The collapse of global oil prices has only accelerated Venezuela’s demise, and now the nation is near the point of complete collapse since their economy relies too much of petroleum for revenues and growth. And judging from the fact that oil prices dropped below the Maginot line of $30 per barrel in yesterday’s trading, chances are Maduro’s 60 day state of emergency will either be increased after two months, or the people will reach the point of desperation that will bring about civil unrest against the Socialist regime.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.