The U.S. Declares Economic War Against Venezuela

Demonstrators seize a truck during an anti-government protests in Caracas, Venezuela, on Wednesday, Jan. 23, 2019. Venezuela's large anti-government protests turned violent in the afternoon, with mobs running from national guardsmen who fired dozens of tear gas canisters in the Altamira neighborhood of eastern Caracas. Photographer: Marco Bello/Bloomberg© 2019 BLOOMBERG FINANCE LP

Since the election of Hugo Chavez in December of 1998, Venezuelans have embraced Chavismo. This peculiar form of socialism has allowed Venezuela to morph into what is in essence an organized crime syndicate and has pushed the country in an economic death spiral. For the stunning evidence of this death spiral, we need look no further than Venezuela’s inflation rate.

Today, Venezuela’s annual inflation rate is 112,189%/yr. The chart below tracks the daily measurements of this annual rate. Unlike the fantastic inflation forecasts thrown around by the International Monetary Fund (IMF), the data in the chart are real measurements—accurate measurements.

Today, Venezuela’s annual inflation rate was measured at 112,189%/yr.PROF. STEVE H. HANKE

Venezuela is suffering from the ravages of hyperinflation—a rather rare phenomenon. Indeed, there have only been 58 episodes of hyperinflation recorded in history, but Venezuela’s episode is a special case. Although its rate of inflation is modest by hyperinflations standards, its longevity is extended. Venezuela’s episode has lasted a 27 months to date, and there have only been 4 other episodes recorded in history that have lasted longer.

Alas, the word “hyperinflation” is thrown around carelessly and misused frequently in the press. Indeed, the debasement of language in the popular press has gone to such lengths that the word “hyperinflation” has almost lost its meaning.

So, just what is the definition of this oft-misused word? The convention adopted in the scientific literature is to classify an inflation as a hyperinflation if the monthly inflation rate exceeds 50%. This definition was adopted in 1956, after Phillip Cagan published his seminal analysis of hyperinflation, which appeared in a book, edited by Milton Friedman, Studies in the Quantity Theory of Money.

1 2 3
View single page >> |
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.