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The so-called Socialist Paradise is in the midst of an “economic war” and a national economic emergency. How come? The economy contracted, inflation skyrocketed and price inflation surged. This is the state of Venezuela’s economy today.

Venezuela’s central bank published economic data Friday for the first time in more than a year. The nation’s central bank conceded to the fact, after the government denied for so long, that inflation is here and the country’s recession could deepen.

Here’s a glimpse into the Latin American nation’s economy:

– Gross domestic product declined 7.1 percent.

– The inflation rate ended in the third quarter at 141.5 percent.

– Reserves account for only $16 million.

The report comes after newly appointed economy czar, Luis Salas, outlined an economic decree from exiting President Nicolas Maduro. The decree would provide Maduro with powers to dictate economic measures, which he says will help the country from “speculation” and “fictitious” pricing. Some of them include increasing gas prices and perhaps modifying its fixed currency rates soon.

Despite admitting to economic chaos, Maduro is still defiant that it’s his government’s policies that have led to so much destruction. Instead, Maduro blames the economy on a campaign started by his opponents to get rid of the socialist government.

It’s no wonder why such a thing would happen.

Salas doesn’t think inflation exists. In fact, Salas doesn’t believe in the idea that printing money causes inflation. Instead, he thinks any inflation is due to corporate greed.

Here is what he wrote in 2015 called “22 Keys to Understanding the Economic War“:

“Inflation does not exist in real life. When a person goes to a shop and finds that prices have gone up, they are not in the presence of ‘inflation.'”

Huh?

Well, at least this type of thinking helped oust the socialists in charge of Venezuela. Following the president’s speech, National Assembly President Henry Ramos Allup said: “After 17 years, the model has failed. This model is wrong and erroneous, there are the figures and the results.”

That’s an understatement. There’s a shortage of the most basic goods, and when goods are available, whether it’s medicine or a loaf of bread, the price of those products are through the roof.

In the meantime, the government has multi-billion-dollar obligations to meet, which amount to more than $14 billion. The president says the government will meet those obligations, but with government largess, declining oil revenues and a collapsing economy, how could it?

The government still wants to hold onto its social programs, which are rather expensive. In the end, however, Venezuela will have no other choice but to end those initiatives. Simply because it can’t afford it.

–AM

Photo by úl Ravelo Rodríguez via Flickr.