Published: Wednesday, July 08, 2009
Bylined to: Arthur Shaw
Exchange rate should be RE-valued to something like 1.43 bolivars / US$
VHeadline commentarist Arthur Shaw writes: The Venezuelan currency pegged at one dollar for 2.15 bolivars is under a speculative attack from the illegal foreign exchange market, controlled by US imperialists and US monetary authorities, who seek to maintain a depreciation of the bolivar by at least 300%.
The imperialist regime in Washington is pumping trillions of dollars into moribund corpse of US capitalism. As the imperialist regime keeps trying to resurrect the dead with a continuous transfusion of dollars, it is only a matter of time before dollar crashes, especially against the bolivar, because the dollar is overvalued against almost all currencies.
The value of the dollar is being protected at the moment by a cartel of monetary powers, because the dollar is still the main reserve currency in the world.
When the dollar crashes, the value of US dollar denominated
securities crashes.
Some countries ... France, Germany, China, Brazil, Russia ... are publicly and loudly warning the world that the dollar is basically on "life support" and the dollar can only hold on so long.
<blockquote>
"Therefore, there is strong incentive to import and the domestic industry, which has to compete with cheaper foreign products, has a lot of problems to grow properly, to create jobs and to diversify country's exports," Ecoanalitica, a firm of bourgeois economists, is claiming.</blockquote>
The Venezuelan bourgeoisie is hurt by its collaboration with the US imperialists, especially the tendency of the Venezuelan bourgeoisie to let the imperialists plunder and loot ... e.g., R. Allen Stanford at least $3 billion stolen from Venezuelans; Bernard Madoff (hiding as a secret money manager behind Banco Santander, S.A. ), and Wall Street firms pushing the mortgage-backed securities Ponzi scheme, at least $20 billion stolen from the Venezuelans.
Now ... the Venezuelan bourgeoisie helps the US imperialists to depreciate the bolivar and to fuel inflation by the operation of the illegal foreign exchange market which is also an imperialist scam for looting the Venezuelan bourgeoisie. After generations of servility and domestication, the Venezuelan bourgeoisie can't see it is being exploited when it is induced to pay seven bolivars rather than two bolivars for a dollar.
All of these US imperialists schemes to loot the Venezuela
bourgeoisie weakens the local capitalists and the balance of power between the capitalist and working classes in Venezuela shift in favor of the workers.
The Venezuela economy must continue the
shift from US dollar-denominated imports and move from foreign trade where the US dollar serves as a middle or intermediate currency even if the trade is denominated in a local currency. Once this happens, the influence of exaggerated exchange rate in the illegal foreign exchange market on both the value of the bolivar and the amount of inflation in Venezuela will decline markedly.
While Venezuela reduces the role of the dollar as an international transactional currency, shifting to local currencies or other reserve
currencies, Venezuela must at least conserve or, better still, grow its foreign exchange reserves and greatly increase its official gold reserves. When these four things are done ... (1) shift from dollar-denominated imports, (2) remove the dollar as a middle currency, (3) accumulate more foreign exchange reserves, and (4) accumulate official gold reserves ... the illegal foreign exchange market in Venezuela will wither into an irrelevancy.
Presently, Venezuela is making progress in (1), (2), (3) and (4). It is making the most progress in (3), accumulating more foreign exchange reserves. Next to (3), it is making the most progress in (4), ccumulating official gold reserves.
At one dollar for 2.15 bolivars, the dollar is overvalued.
The exchange rate should be RE-valued to something like one dollar per 1.43
bolivars. But the a revaluation is pointless as long as the illegal foreign
exchange market has its current potency. When the time for a revaluation
comes, the domestic market will more than triple. The cost of imports will
plunge. Consumption of the working class will deepen and spread.
Bourgeois economists at Ecoanalitica believe the "... official exchange rate should be Bs.F 5.55 per US dollar, which is 158% higher than the current value of the bolivar and suggest a 61% overvaluation of the Venezuelan currency."
Since the illegal market routinely depreciates the bolivar at about 300%, this devalued "Bs.F 5.55 per US dollar" rate in the legal market means a 16.65 bolivars per dollar rate in the
illegal market. The US imperialists can really loot the stupid and servile Venezuelan bourgeoisie with an illegal rate of 16.65 bolivars for a dollar.
Inflation will leap from 30% to somewhere between 60% and 80%. But most of all, a devaluation will mean that the US monetary authorities exercise de facto control of Venezuela monetary policy through the capricious, arbitrary and utterly jive exchange rates which the US imperialists unilaterally set in the illegal market in Venezuela without the least regard for the fundamentals between dollar and bolivar. So, devaluation will aggravate old problems and introduce new problems, such as the elevation of the so-called "parallel" market into the dominant market.
The hundred or so currency brokerages that constitutes the body of the illegal foreign exchange market, the mass of the Venezuelan bourgeoisie, the bourgeois media, US imperialists, and most of the counter-revolutionary riff-raff expect or demand certain policy changes, e.g., a devaluation, based chiefly on the flimsy "evidence" of the illegal market.
If this garbage jaw-bones their
policy change, they will feel empowered.
[size=14]Arthur Shaw
arthur.shaw@vheadline.com[/size]
Bylined to: Arthur Shaw
Exchange rate should be RE-valued to something like 1.43 bolivars / US$
VHeadline commentarist Arthur Shaw writes: The Venezuelan currency pegged at one dollar for 2.15 bolivars is under a speculative attack from the illegal foreign exchange market, controlled by US imperialists and US monetary authorities, who seek to maintain a depreciation of the bolivar by at least 300%.
The mass of the Venezuelan bourgeoisie, collaborating treacherously with the US imperialists, often uses the exchange rate in the illegal foreign exchange market as its base rate or reference rate for pricing goods and services whether imported or produced domestically.
The imperialist regime in Washington is pumping trillions of dollars into moribund corpse of US capitalism. As the imperialist regime keeps trying to resurrect the dead with a continuous transfusion of dollars, it is only a matter of time before dollar crashes, especially against the bolivar, because the dollar is overvalued against almost all currencies.
The value of the dollar is being protected at the moment by a cartel of monetary powers, because the dollar is still the main reserve currency in the world.
When the dollar crashes, the value of US dollar denominated
securities crashes.
Some countries ... France, Germany, China, Brazil, Russia ... are publicly and loudly warning the world that the dollar is basically on "life support" and the dollar can only hold on so long.
<blockquote>
"Therefore, there is strong incentive to import and the domestic industry, which has to compete with cheaper foreign products, has a lot of problems to grow properly, to create jobs and to diversify country's exports," Ecoanalitica, a firm of bourgeois economists, is claiming.</blockquote>
The Venezuelan bourgeoisie is hurt by its collaboration with the US imperialists, especially the tendency of the Venezuelan bourgeoisie to let the imperialists plunder and loot ... e.g., R. Allen Stanford at least $3 billion stolen from Venezuelans; Bernard Madoff (hiding as a secret money manager behind Banco Santander, S.A. ), and Wall Street firms pushing the mortgage-backed securities Ponzi scheme, at least $20 billion stolen from the Venezuelans.
Now ... the Venezuelan bourgeoisie helps the US imperialists to depreciate the bolivar and to fuel inflation by the operation of the illegal foreign exchange market which is also an imperialist scam for looting the Venezuelan bourgeoisie. After generations of servility and domestication, the Venezuelan bourgeoisie can't see it is being exploited when it is induced to pay seven bolivars rather than two bolivars for a dollar.
All of these US imperialists schemes to loot the Venezuela
bourgeoisie weakens the local capitalists and the balance of power between the capitalist and working classes in Venezuela shift in favor of the workers.
The Venezuela economy must continue the
shift from US dollar-denominated imports and move from foreign trade where the US dollar serves as a middle or intermediate currency even if the trade is denominated in a local currency. Once this happens, the influence of exaggerated exchange rate in the illegal foreign exchange market on both the value of the bolivar and the amount of inflation in Venezuela will decline markedly.
While Venezuela reduces the role of the dollar as an international transactional currency, shifting to local currencies or other reserve
currencies, Venezuela must at least conserve or, better still, grow its foreign exchange reserves and greatly increase its official gold reserves. When these four things are done ... (1) shift from dollar-denominated imports, (2) remove the dollar as a middle currency, (3) accumulate more foreign exchange reserves, and (4) accumulate official gold reserves ... the illegal foreign exchange market in Venezuela will wither into an irrelevancy.
Presently, Venezuela is making progress in (1), (2), (3) and (4). It is making the most progress in (3), accumulating more foreign exchange reserves. Next to (3), it is making the most progress in (4), ccumulating official gold reserves.
The pernicious operations of the illegal foreign exchange market
seriously fetter or impede the progress in (1) and (2), but progress is still
steady and modestly increasing.
At one dollar for 2.15 bolivars, the dollar is overvalued.
The exchange rate should be RE-valued to something like one dollar per 1.43
bolivars. But the a revaluation is pointless as long as the illegal foreign
exchange market has its current potency. When the time for a revaluation
comes, the domestic market will more than triple. The cost of imports will
plunge. Consumption of the working class will deepen and spread.
Bourgeois economists at Ecoanalitica believe the "... official exchange rate should be Bs.F 5.55 per US dollar, which is 158% higher than the current value of the bolivar and suggest a 61% overvaluation of the Venezuelan currency."
Since the illegal market routinely depreciates the bolivar at about 300%, this devalued "Bs.F 5.55 per US dollar" rate in the legal market means a 16.65 bolivars per dollar rate in the
illegal market. The US imperialists can really loot the stupid and servile Venezuelan bourgeoisie with an illegal rate of 16.65 bolivars for a dollar.
Inflation will leap from 30% to somewhere between 60% and 80%. But most of all, a devaluation will mean that the US monetary authorities exercise de facto control of Venezuela monetary policy through the capricious, arbitrary and utterly jive exchange rates which the US imperialists unilaterally set in the illegal market in Venezuela without the least regard for the fundamentals between dollar and bolivar. So, devaluation will aggravate old problems and introduce new problems, such as the elevation of the so-called "parallel" market into the dominant market.
The hundred or so currency brokerages that constitutes the body of the illegal foreign exchange market, the mass of the Venezuelan bourgeoisie, the bourgeois media, US imperialists, and most of the counter-revolutionary riff-raff expect or demand certain policy changes, e.g., a devaluation, based chiefly on the flimsy "evidence" of the illegal market.
If this garbage jaw-bones their
policy change, they will feel empowered.
[size=14]Arthur Shaw
arthur.shaw@vheadline.com[/size]