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T'Hugonomics

Monday, 21st January 2008

I'm indebted to Francis for bringing this BBC story to my attention. Looks like Hugo Chavez has finally fallen off the edge of the economic world:

Government controls keep food prices low in shops to help even the poorest Venezuelans feed themselves.

But some farmers prefer to sell their produce in neighbouring countries where prices are higher, leading to shortages of bread, milk, eggs and meat.

In his weekly television show, Mr Chavez said farmers doing this should have their farms "expropriated".

People who sell their produce where they wish should be expropriated? People who sell to foreigners should be expropriated? A very national type of socialism, isn't this?

On Saturday, Mr Chavez threatened to nationalise banks which did not give enough low-interest loans to farmers.

Banks are not allowed to charge farmers interest higher than 15% - even though inflation last year ran at 22.5%.

"The bank that fails to comply must be sanctioned, and I am not talking about a little fine," he said. "The bank that does not comply must be seized."

And money must be lent at negative interest rates?

We've all always known that this would end in tears the only question was when. Soon is my guess, given that there is only so long you can fight economics before economics wins.