From Reuters:
Chavez orders money changer raids for FX crash
Venezuela's President Hugo Chavez said on Friday authorities were set to raid money changers and close websites listing exchange rates, his latest bid to stop the crashing bolivar currency.
Venezuela's foreign exchange market is already paralyzed after the government moved to end speculation and stem the fall of the bolivar with new rules some economists fear will cause economic turmoil.
Under a reform passed by legislators on Thursday, the central bank will oversee all transactions in the market where the bolivar is traded freely via securities.
Fitch Ratings said on Friday that Venezuela's new laws governing foreign exchange trading could hurt growth prospects and stoke inflation, compromising the government's ability to service its debt.
Chavez's comments:
"The first raids should be starting, money changing houses, illegal dollar sales where they say they sell gold," Chavez said in a meeting with governors. "We are battling a mafia...I said before, we are going to give them the mother of all blows."
Venezuela's economy is heading toward a free-fall. The Reuters article said that inflation there is 5% but this report puts it at a bit over 30%. With inflation hitting the exchange rate, imported items will be higher priced making it hard for the cash-strapped citizens of this workers paradise. He is nationalizing foreign-owned businesses, making noises about nationalizing banks and are treating the oil companies with the utmost of kindness. When will he wake up to the fact that he is incompetent and is squandering Venezuela's wealth on Marxist policies that have never and will never ever work.
