PrepperNomics 107: Venezuela
Here at 3BY we generally avoid politics. We want to encourage prepping, regardless of your politics, religion, sexual preferences, or state of mental health. 😊 As a result, I have not talked about the largest disaster currently unfolding in our hemisphere, Venezuela.
Unless you’ve been asleep for the past 20 years, you know that Venezuela is in a state of economic and social collapse, brought about via the imposition of a socialist/communist regime, that has put the whole country on an unplanned diet, . . . literally. The average Venezuelan has lost 19 pounds in the past year. Want to lose weight? Move to Venezuela! ☹
Current conditions in Venezuela
Conditions in Venezuela are dire. Not only is food scarce, but toilet paper is scarce, as the government has nationalized most manufacturing businesses, including paper production. It turns out the government doesn’t run these businesses very well, and production has collapsed. Water runs, . . . sometimes. When people discover the water is running they attempt to fill containers before it stops again.
I read that the Venezuelan bolivar is now suffering 1,000,000% inflation. Another source said 14,000%. I don’t think anyone really knows. To compare this to the Weimar Republic is unfair to the Weimar Republic. Effectively, the US dollar is replacing the local currency, despite the fact that relations with the US are chilly.
This chaos has led to an outflow of Venezuelans to neighboring countries that is so serious that it is creating an immigration crisis in those countries. Locally (Peoples Republic of New Jersey) we have a fair number of Colombian immigrants who came to the US. They speak of Colombia as being a beautiful country that they might want to visit, but not live in. They came here for jobs, which tend to be perpetually hard to get in Colombia. Yet now we have Venezuelans going to Colombia in such numbers that Colombia can’t absorb them, because Colombia is so much better run than Venezuela.
Venezuela used to be the richest country in Latin America. It has ample natural resources, including plenty of oil. It has imploded, despite all of its natural advantages, due purely to socialist government.
How Did This Happen?
Hugo Chavez was a career military officer in the Venezuelan military, who was dissatisfied with the Venezuelan political system. He became active in politics and attempted a coup d’etat in 1992. He was imprisoned for two years, and upon release founded a new political party, and was elected President in 1998.
Once he took office, the country began a slide into authoritarian socialist rule. Industries were taken over by the government one by one. Foreign investors were gradually driven out of the country. Governmental power was slowly consolidated in the Presidency.
The problem with this approach, aside from the usual one of eventually running out of other people’s money, was that the government had no particular expertise in the various industries they took over. For instance, if your company manufactured toilet paper and was taken over by the government, the management was replaced if they were Venezuelan, and kicked out of the country if they were foreign. They were then replaced by Chavez loyalists, with predictable declines in toilet paper production. ☹
This was not done to every industry simultaneously, but gradually over time. The ill effects were not obvious while oil revenues were rolling in, but the cumulative effects became very apparent when the price of oil dropped, rippling through the weakened economy. There was nothing else in the economy that could take up the slack left by a collapsing oil industry. GDP growth turned negative.
Hugo Chavez ultimately contracted cancer and was succeeded by Nicolas Maduro, who continued the Chavez policies while Venezuela’s economy continued a downward spiral. At this point President Maduro has made some comments acknowledging the system failure, (DUH!) but the government has not changed, nor have any reversals of policy been implemented. Without protection, it is unlikely that foreign investors would return.
Venezuela’s Future
The Venezuelan government has managed to antagonize foreign investors, neighboring countries, trading partners, and most of its own population.
Venezuela has become a failed state.
The first step in returning the country to health will have to be replacement of the Venezuelan government. How the change of government will occur, i.e. elections, revolution, etc. remains to be seen, but the current government will not undo the policies of the past two decades, and even if they did, no one would trust them not to return to the policies that failed. Even the country’s own population no longer trusts the government. Why should anyone else?
Once the government is replaced, whatever follows will be faced with a massive recovery problem. Venezuela will need to restore normalcy, and attract their population to return from the countries they have fled to, primarily other South American countries.
Man-Made Disaster
Venezuela is destined to become a case study in how a country can become a man-made disaster. The country has conducted an epic demonstration of how socialism can destroy a country from within. By substituting government ownership, for private ownership, Venezuela has demonstrated once again that socialism is a form of national suicide.
I could use to lose 20, but that’s not the way I want to do it.
The Venezuelan situation is like a bad prepping novel, nobody would really believe it.
They had the perfect chance to change course when Chavez died. They could have reformed and blamed everything on him.
I wonder if his personality cult was too strong?
Folks, I will save you the trouble of commenting about US politics. We don’t do US politics here, and that includes the comments. Comments mentioning US politics, parties or politicians will simply not be approved, so save yourself the effort 🙂
The situation in Venezuela is presented as an alternative view to what many resources are saying, not as a way to generate US political conversation.
There are plenty of places on the web to express your political views, but we just are not going to talk about US Politics here.
Can you explain how the situation in Venezuela is completely isolated from American based corporate policy and thus exempt from your rule of not talking US politics? I would honestly love to hear a rational argument that taking control away from foreign/globalist corporations is better for local self-determination and how the debt economy of capitalist global imperialism isn’t going to cause a global meltdown.
Countries in the modern world are never “completely” isolated, but Venezuela has been very thorough in nationalizing foreign assets within the country, so at this point foreign corporations that previously operated in Venezuela, are largely gone, whether we are speaking of US or other countries corporations. We are isolated because Venezuela has chosen isolation.
QUOTE: “There are plenty of places on the web to express your political views, but we just are not going to talk about US Politics here.”
Alex Jones thinks otherwise. If we cannot discuss politics here…then where?
Needing a good debate? Try this site.
https://www.debate.org/
Here’s the thing… we started 3BY because we saw there is a need for a politics-free source of prepping information. My article that publishes tonight is on prepping to drink Ditch Water. Water filtration and purification doesn’t have ANY political aspects to it whatever, and I want people of all political views to see my information on Ditch Water.
If we discuss politics, then 3BY becomes just like every other prepper website out there, focused on political stuff and not PREPPING stuff.
The thing is, we don’t do this to make money. We don’t make a DIME off of this place, in fact it is nothing but an expense in both money and time.
We do it because we believe that every person owes an amount of social rent… to be a quality human being worth the air we breath, we believe that we should give to others some of what we have, so that perhaps we can make their lives better.
We offer it free of charge, no warranties expressed or implied, but we offer it to EVERYONE without borders or boundaries.
Politics = introducing unnecessary borders and boundaries.
Bottom line, I want liberals to be prepped. I want conservatives to be prepped. I want communists to be prepped. I want people of every religion to be prepped. I want people who are not religious at all to be prepped. I could keep going and going, but the point is that I don’t want to put up barriers that will drive people away from 3BY and have them miss out on our information just because they see a bunch of political stuff that doesn’t match their beliefs.
Not going to happen.
If this makes people mad and they want to leave 3BY, well, that’s their own business. There are TONS of prepping sites out there that likely match their political belief system.
Heck, the only people here who even KNOW what I believe politically are Spice and Paranoid Prepper, except on the right to bear arms (that we do take a stand on).
What I believe politically is not relevant to what we do at 3BY though, because (for example) Ditch Water doesn’t care, nor do the little organisms and contaminations swimming around in it.
As the author of the entire PrepperNomics series, I’d like to offer some insight and perhaps make everyone feel a bit better about this post.
Salty is the owner of the site and sets the rules, and I agree with the rules. I also happen to be an MBA with 40 years of experience in financial services and therefore know a bit about economics. As most of you know, I was in the WTC on 9/11/01 because I worked there, and the WTC was part of lower Manhattan, i.e. the financial district.
We both felt the discussion about economics on most prepper sites was poor, and that it would be useful to have some economics posts to improve our readership’s understanding of economic issues. Writing such posts without the posts being political, was clearly a challenge I would face.
I avoided writing about Venezuela for some time, because of the challenge of addressing what went wrong without being political. However, Venezuela is an obvious SHTF situation due to it’s economic collapse, so avoiding the topic entirely just invites the question “How do you explain what is currently the world’s most talked about economic collapse?” Venezuela was a topic that could not be avoided.
Well, I tried to explain Venezuela, and it appears that I failed to make it sufficiently “not political” for some of you. On the other hand, I think the post and comments illustrate why we have the rules. We don’t want to drive anyone away from prepping, or this site. As a result, I promise to try to do a better job of keeping my posts not political. I expect to be governed by the same rules as everyone else.
Fantastic article. Keep them rolling. Living in Europe, I have begun to understand that a number of companies use this method of employing unqualified people to enforce their NWO ideologies and we see destruction of wealth on the same platform as with Venezuela too. It doesn’t happen overnight, but all the refugees, fully unqualified, are being put into managerial positions. Similar to South Africa? This is truly a reason to be prepped.
Thank you for the kind words. There are a fair number of PrepperNomics posts on the site already. You might find some of them to be interesting reads. Feel free to suggest topics to add to the series.