Socialism always promises heaven and gives hell.
In the early hours of Thursday, November 2, the Maduro regime certified its latest failure with what they promised would never happen: technical default. With his usual arrogance, Maduro issued a ‘decree’ demanding ‘the refinancing and restructuring of the debt as of November 3.’ That is, default.
The bad news for investors or high-yield hunters is that the likelihood of being swindled again is almost 100%.
Chavez once said ‘put me oil at zero and Venezuela will not suffer,’ and Maduro stated that ‘a revolutionary government with economic power as the one I preside has plans to surpass any situation arising from any price of oil.’ Reality has now kicked in.
Venezuela was not destroyed by low oil prices, but by high socialism.
Socialism has led Venezuela to an unparalleled economic disaster . No, it’s not ‘the price of oil.’ Venezuela is the only OPEC country that has fallen into default, depression, and hyperinflation. It’s not oil, it’s socialism.
The management disaster is spectacular and the greatest example of the devastating effect of socialism is the state-owned oil company. PdVSA, the national oil company, has gone from being one of the most efficient and profitable twenty years ago, to end up importing oil.
This post was published at Ludwig von Mises Institute on 11/20/2017.