Circling the drain. Their only source of revenue is the sale of oil. Venezuela is blessed with the worlds largest known reserve of oil and the Chavez government pissed it away by using the profits to pay for bread and circuses for 'the people' and not for infrastructure development and maintenance.
The Venezuelans got free education but no school buildings, books or qualified teachers. Free health care but no MRI machines or antibiotics or Doctors. When money got tight, the government would nationalize an industry (telecom, electricity, transportation, etc...) which lead to really bad phone service, rolling blackouts and the impossibility of shipping something from point "A" to point "B".
Here are two stories - first from The Washington Post:
Venezuelans are storming supermarkets and attacking trucks as food supplies dwindle
CARACAS, Venezuela — In the darkness the warehouse looks like any other, a metal-roofed hangar next to a clattering overpass, with homeless people sleeping nearby in the shadows.
But inside, workers quietly unload black plastic crates filled with merchandise so valuable that mobs have looted delivery vehicles, shot up the windshields of trucks and hurled a rock into one driver’s eye. Soldiers and police milling around the loading depots give this neighborhood the feel of a military garrison.
“It’s just cheese,” said Juan Urrea, a 29-year-old driver, as workers unloaded thousands of pounds of white Venezuelan queso from his delivery truck. “I’ve never seen anything like this before.”
The second story is going to hit them really hard - from Bloomberg:
Venezuela’s Oil Output Decline Accelerates as Drillers Go Unpaid
Venezuela’s oil output, already the lowest since 2009, is set to slide further this year as contractors scale back drilling after the cash-strapped country fell more than $1 billion behind in payments.
The Latin American nation’s oil production, which generates 95 percent of export revenue, will decline by about 11 percent to 2.1 million barrels a day by the end of the year, Barclays Plc estimates. Output is falling largely because oil-services companies aren’t being paid, according to the International Energy Agency.
And some numbers:
Schlumberger Ltd., the world’s largest oil-services company by market value, was owed $1.2 billion by PDVSA as of March 31, according to an April 27 filing. Halliburton Co. said last month the amount it was owed rose 7.4 percent in the first quarter to $756 million.
The number of rigs drilling for oil in Venezuela fell by 10 to 59 in May, the lowest level in more than a year, according to Baker Hughes Inc.
Owed $1.2 Billion dollars. If you had $1.2 billion dollars and spent $330,000 dollars each and every day, your money would last for about ten years give or take a couple days. By shorting the people producing the actual wealth, they are eating their own seed corn.
Yeah - call me skeptical but I do not ever see a way where socialism will work. It never has and these scenarios have played out throughout this worlds history. Look at the American Colonists First Thanksgiving for a sterling example.
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