This confirms yet again my hypothesis that it's now sovereign countries turn to default and go bust. Here's a quote from the post I made on the 1st of December 2009:
It's rather that it just confirms to those who thought the worst is over that they couldn't be further from the truth. It's now time for the sovereigns to default.[Update: Mish also has a fantastic post where he compares Obama and Chavez. Absolute must read.]
Here are some quotes from newspapers:
(LA Times) The cost of most imports is expected to double with President Hugo Chavez's move to adjust the bolivar against the dollar.
Garcia was among the thousands of Venezuelans flocking to stores to snap up appliances, auto parts, electronics and other imports before they feel the full impact of President Hugo Chavez's decision last week to officially adjust the nation's currency for the first time since 2005.
Chavez cut the exchange rate of the bolivar against the dollar by half. At the same time, he warned merchants during his weekly TV address on Sunday that raising prices too much could result in the seizure of their businesses. On Monday, he declared 24-hour closures of two big retailers, Exito and Makro, for alleged "irregularities."
Monday was the first full day of business since the announcement of the devaluation, to 4.3 bolivars to the dollar from 2.15. The move will essentially double the cost of about two thirds of all imports, as well as the price of foreign travel.
Venezuela has long had a thriving black market in dollars, where the exchange rate has been between 6 and 7 bolivars to the dollar.
Venezuelan bond prices rose and the Standard & Poor's debt-rating agency upgraded its outlook on Venezuela's creditworthiness, saying the country will now be better able to balance its budget and pay down its $58 billion in foreign and domestic debt.[My comment: this is simply unbelievably flawed and wrong argument... S&P is out of their minds...]
Critics say Chavez has squandered the nation's oil wealth and that the power crisis stems from his neglect of infrastructure at the expense of foreign giveaways to build support for his anti-U.S. policies. They cite the ongoing military buildup and the nationalization of some businesses.
(FT) Hugo Chávez, Venezuela’s president, on Sunday threatened to deploy troops and expropriate businesses that increase their prices following a steep devaluation of the currency on Friday.
“I want the national guard on the streets with the people to fight against speculation,” said Mr Chávez during his weekly television show, Alo Presidente.
“So much for the ‘strong’ bolivar,” scoffed Eleonora Méndez clutching a new DVD player in a busy shopping mall in eastern Caracas on Saturday, referring to the grandiose name given to the currency after three zeroes were lopped off it two years ago.