click on graphic to enlarge
The above graphic shows that the Argentine Republic (Argentina) is on its way to being the next South American financial disaster unless its economy can be turned around quickly.
Inflation in Argentina has risen to a 54.7% annual rate in March from 25% @ the start of 2018 – new price controls were announced earlier this month. Unemployment is 9.1% & 30% of the people live in poverty.
Argentina's problem is the result of the 12 year rule of Cristina Kirchner & her late husband, Nestor Kirchner, in which they nationalized businesses, raised taxes on Argentina's vital grain exports, financed their deficit by printing money, imposed price controls, & defaulted on the debt.
Argentina's president since 2015, Mauricio Macri, has not been able to turn Argentina's economy around fast enough to suit many people & Cristina Kirchner is planning a comeback with a plurality of poll respondents approving of her return – interventionist socialist policies & all.
Heaven help them.
But Venezuela, the subject of many posts, remains the far worse case of socialist failure – socialism in Venezuela is @ the final stage of poverty, tyranny, confiscation & misery as the Venezuelan government violently attacks its own citizens using armored military vehicles – & neither Bernie or AOC says a word.
click on graphic to enlargeThe above two graphics illustrate how much Venezuela has been wrecked by corruption & socialism. Independent economists estimate Venezuela is being devastated by an annual inflation rate of 2,000,000%. The first graphic above shows consumer prices have risen more than 50% per month since November 2017 & consumer price inflation was 261.18% higher in January than December.
The second graphic shows that the richest 10% of households now receive more than 60% of Venezuela's total income compared to about 30% in 2014. When countries hit hard times it seems the rich always find a way to wind up on their feet & everyone else ends up worse off.
Of course with such hyperinflation rates the local currency, the bolivar, has increasingly become more worthless every day. People who have stayed in Venezuela are more & more dependent on U.S. dollars being sent back to their home country by emigrants who had fled Venezuela as the U.S. dollar has become the preferred means of payment. About one quarter of the people now use the dollar for ordinary transactions.
To clearly see the affects of this type of hyperinflation, like in Venezuela, please use the above information to determine the cost of an item, like one stick of chewing gum, @ the end of January that is priced @ 1,000 bolivars on January 1.
Please let me know how you work the problem – guesses on this one are OK if you have an idea of the answer but are not sure of the math.
I will post all correct answers or alternatively will send the solution privately to anyone who requests it if no one figures it out – or guesses the right answer.
I don’t know about the stick of gum but my question is how do the rich double their income in 5 years while the rest of the country becomes impoverished?
ReplyDeleteThe rich didn’t double their personal income in absolute terms. They doubled their share of a declining Venezuela total income which is quite a bit different. Please look @ the graph again to see this.
DeleteThe cost of a stick of chewing gum is important because it illustrates hyperinflation rates that will be coming to America if Venezuelan type socialism takes hold here as is possible with all the socialist propaganda that is being spoken by Democrat politicians & approved of by the American masses. I wrote the quiz because I thought it was important for everyone to visualize what a stick of chewing gum could cost @ these types of inflation rates. It should not be dismissed lightly.
Here's the quiz solution:
ReplyDelete(261.18 - 175.0) x 1000 = 86.18/100 x 1000 = 861.8 Bolivars
Therefore the cost of one stick of gum that cost 1,000 Bolivars in Jan. cost 1,861.8 at the end of the month.
You have the right idea but misread the graph & the commentary “consumer price inflation was 261.18% higher in January than December”. The solution is easier than you show. Please update & you have it.
DeleteDoug, here's the corrected solution: 2.6118 x 1000 = 2611.8 Bolivars
DeleteVery close. You forgot to add in one thing. Add it in & you have it.
DeleteDoug, you are darn right, answer is 3611.8 Bolivars.
DeleteWhat happened is, I got a phone call while I was sending you you the email and in haste, I forgot to add the 1000 to the answer. It better be right this time.
I don't want to disappoint Carol yet.
Bulls eye. Don’t worry PB, you could never disappoint Carol. The moral is don’t take any phone calls when taking the next quiz.
DeleteA $6.00 board in the US X 261.18% = 15.67+6.00 would cost $21.67 ? US
ReplyDeleteVery good, but give it to me in bolivars for a 1,000 bolivar item & you have it.
DeleteX=1000, Jan. 12 pm, Jan. 31 at 216.8% increase = X= 1000 + 21618 = 3168 bolivars.
DeleteThe graph shows that actual inflation was 261.18% in January so prices are 2.6118 times higher @ the end of the month than on January 1. Therefore the item costing 1,000 bolivars @ 12:01 AM on January 1 would cost 3,611.8 bolivars @ midnight on January 31.
ReplyDelete