Venezuela got hit with a 10-pound sledge hammer of reality earlier this week when the International Monetary Fund predicted that it may face a one million percent inflation rate this year.
The socialist paradise’s response was to simply ignore reality. It will delete the last five zeros from its currency. Thus, a 100,000 bolívar note will magically become a one bolívar note.
“The monetary reconversion will start on Aug. 20,” Venezuela's President Nicolas Maduro said in a televised statement, presenting the new bills to the camera.
Problem solved (but not really).
Oil-rich Venezuela was once one of the wealthiest countries in South America; today its people are starving and basic modern necessities, like a simple roll of toilet paper, can’t be found on any store shelf.
Fortunately, there are lots of 1,000 bolívar notes available for the job. Unfortunately they’re not available in an “ultra-soft” version.
And changing the numbers on their currency isn’t going to provide jobs, restart the engine of business and industry, lift the nation’s poverty, or get anyone a roll of toilet paper.
And it’s not going to curb Venezuela’s hyper-inflation.
As ridiculous as the notion is, former President Barack Obama — arguably the most socialist-oriented president in American history — actually considered doing something just as insane.
In January of 2013, when a government shutdown appeared possible over the issue of raising the debt ceiling (with no attempt at actually curbing spending), his administration floated the idea of having the Treasury Department strike a few $1 trillion platinum coins.
Mint the coins, deposit them in the treasury and “poof,” the debt has been magically reduced.
Obama related four years later that it was the scariest moment of his presidency.
But what was scary for him wasn’t the suggestion of minting a $1 trillion coin — it was the possibility of a government shutdown.
And that moment of presidential wrongheaded, “ignoring reality” thinking is what should truly scare the bejesus out of every right-thinking American.
Obama also expressed worry that the U.S. credit rating may be lowered because of a shutdown. He had some experience in that area.
In August of 2011, S&P degraded the favored AAA rating we’d enjoyed since 1917 to AA-plus, citing concerns over the rising debt and inability to control the annual deficit — the very issues that Republican lawmakers cited when they balked at raising the debt ceiling.
And S&P would have seen right through the ruse had the administration dropped a few $1 trillion coins into the government’s piggy bank, just as the IMF will ignore Venezuela’s fiction of dropping the last five zeros from its currency.
Back in the day, we took pity on those who lived in a fantasy world of their own creation, and said they suffered from a mental disorder; today we call those people socialists and often elect them to high political office.
Michael Dorstewitz is a retired lawyer and has been a frequent contributor to BizPac Review and Liberty Unyielding. He’s also a former U.S. Merchant Marine officer and an enthusiastic Second Amendment supporter, who can often be found honing his skills at the range. To read more of his reports — Click Here Now.
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