Oh Mark, never change...
Only Mark Weisbrot could look at this chart…
…and conclude “already inflation has started to fall from its peak of 6% monthly.”
Worse than the headline, though, is the rationale:
“Creo que ya el Gobierno ha comenzado a tomar acciones, una tiene que ver con la reforma del sistema del tipo de cambio”, dijo y mencionó enseguida la segunda subasta especial del Sistema Complementario de Administración de Divisas (Sicad), cuyos resultados anunció la semana pasada el Banco Central de Venezuela (BCV).
El Ejecutivo Nacional puso a andar este año el Sicad, un mecanismo alterno para proveer de divisas al país, donde desde hace diez años rige un control de cambio. “Pienso que el Gobierno está enfocado en arreglar ese problema porque de allí proviene la inflación, todo viene del mercado de divisas. Casi toda la inflación aquí es resultado de eso”, indicó.
So it’s LSicaD that Weisbrot thinks is going to fix the inflation problem. Because, obviously, an effective devaluation from Bs.6.40 to Bs.10.90 per dollar will slow price increases. Duh!
Anyway, whatever happened to Weisbrot’s September 2012 fatwa to the effect that:
Over time, it would be good if Venezuela could develop a foreign exchange regime that sharply reduced or eliminated the speculation against the currency, as well as the black market. This should not be too difficult to accomplish in a country where almost all of the foreign exchange earnings accrue to the public sector, and where the economy is almost always running current account surpluses. It is primarily a question of administrative capacity and choosing the best exchange rate regime. But even under the current exchange rate regime, there is no need to devalue…
Just so we’re clear: back when the bolivar was at Bs.4.30:$, there was no need to devalue and inflation was going to be fine. Now that the bolivar is down to Bs.10.90:$, the needed policy correctives have been taken, and inflation is going to be fine.
Oh Mark…
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