Dispensing with niceties

14 May 2010 By Martin Hutchinson

Venezuela s president threatened to shut down brokers, or the rich moneybags practicing a savage capitalism that has undermined the bolivar. The rhetoric may only be a little more extreme than populists elsewhere. Aping Chavez s policy, however, would be far more dangerous.

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The Venezuelan parliament voted on May 13 to clamp down on foreign exchange trading, by giving the central bank control over the parallel market in foreign exchange, following this year's 25 percent slump in the local currency, the bolivar, against the dollar.

President Hugo Chavez warned brokerages to comply with the new rules, or face drastic action. If we had to eliminate the whole bunch of brokerages and I don't know what, well eliminate them, this country does not need them, we don't need this savage capitalism of these rich moneybags, he said.

Venezuelan consumer prices jumped a record 5.2 percent in April to 30.4 percent above the previous year. Venezuelan GDP is expected by the Economist panel to fall 6.7 percent in 2010 and 0.5 percent in 2011.

Reuters news story

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