venezuela

[Mister Moose]

You know you're in trouble when the graph measuring your inflation rate is calibrated in units of 5,000 percent.

[Bubba]

Trump pressed aides on Venezuela invasion

https://apnews.com/a3309c4990ac4581834d4a654f7746ef" onclick="window.open(this.href);return false;

[Mister Moose]

There is no shortage of reasons to believe the situation will continue on a downward spiral. Oil wells are being shut down and the worker exodus will put an even deeper strain on operations. More than $9 billion in bond payments fall due this year, and it is hard to imagine the government and PDVSA marshalling the resources to meet those payments. Inflation is set to top some 13,000 percent this year, a mind-boggling figure, while GDP could shrink by a further 15 percent. By the end of the year, GDP will have contracted by nearly 50 percent since 2013.

https://oilprice.com/Energy/Energy-Gene ... risis.html" onclick="window.open(this.href);return false;
By Nick Cunningham - Jul 12, 2018, 4:00 PM CDT

Looking at GDP per capita, the US is $59,500. Venezuela is $12,400. Many of the Caribbean nations are between 17,000 and 26,000. Cuba, the longest running example of a government run economy, is only $6,400, while nearby Bahamas is $25,000.

Cuba is a fifth of its neighbors, and a tenth of the US.

And into this performance record, the Democrats are embracing socialism.

[Mister Moose]

The word out of Washington is that the United States is no longer looking at sanctioning Venezuela’s oil industry, and not just because Venezuelan oil accounts for a large part of the imports of the refiners on the Gulf Coast. The U.S. Administration doesn’t want to be responsible for the total collapse of Venezuela, and doesn’t want to be blamed for contributing to it, analysts told Platts’s Brian Scheid.
“If you break it, you buy it,” George David Banks, a former international energy and environment adviser to U.S. President Donald Trump, told Platts. “The White House doesn’t want to own this crisis.”


Venezuela’s inflation will surge to one million percent by the end of this year as the country with the world’s biggest oil reserves remains stuck in a profound economic and social crisis, the International Monetary Fund (IMF) predicts.
The rig count in Venezuela plunged to 28 rigs in July 2018, compared to 50 rigs in July 2017, according to the Baker Hughes International Rig Count.

https://oilprice.com/Energy/Energy-Gene ... s-Oil.html

One Meelleeun percent sounds steep, numbers have been all over on forecasts for Venezuelan inflation, but the slide has not been arrested.

Would you argue for intervention (at what point?) or hands off? This isn't going to be easy. (We currently get about 7% of our imported oil from Venezuela.)

(July 31, 2018) Ten people were killed Sunday in the bloodiest day of protests since March. The attorney general said 121 people have died in all.

One of the top leaders in Maduro's administration, Diosdado Cabello, said the Constituent Assembly would take power in 72 hours, and that it would establish a "truth commission" to prosecute political opponents.

https://money.cnn.com/2017/07/31/news/e ... index.html" onclick="window.open(this.href);return false;

[Coydog]

There is no shortage of reasons to believe the situation will continue on a downward spiral. Oil wells are being shut down and the worker exodus will put an even deeper strain on operations. More than $9 billion in bond payments fall due this year, and it is hard to imagine the government and PDVSA marshalling the resources to meet those payments. Inflation is set to top some 13,000 percent this year, a mind-boggling figure, while GDP could shrink by a further 15 percent. By the end of the year, GDP will have contracted by nearly 50 percent since 2013.

https://oilprice.com/Energy/Energy-Gene ... risis.html" onclick="window.open(this.href);return false;
By Nick Cunningham - Jul 12, 2018, 4:00 PM CDT

Looking at GDP per capita, the US is $59,500. Venezuela is $12,400. Many of the Caribbean nations are between 17,000 and 26,000. Cuba, the longest running example of a government run economy, is only $6,400, while nearby Bahamas is $25,000.

Cuba is a fifth of its neighbors, and a tenth of the US.

And into this performance record, the Democrats are embracing socialism.

Socialism seems to be working quite nicely in Norway where the GDP per capita is $62,510.

[madhatter]

There is no shortage of reasons to believe the situation will continue on a downward spiral. Oil wells are being shut down and the worker exodus will put an even deeper strain on operations. More than $9 billion in bond payments fall due this year, and it is hard to imagine the government and PDVSA marshalling the resources to meet those payments. Inflation is set to top some 13,000 percent this year, a mind-boggling figure, while GDP could shrink by a further 15 percent. By the end of the year, GDP will have contracted by nearly 50 percent since 2013.

https://oilprice.com/Energy/Energy-Gene ... risis.html" onclick="window.open(this.href);return false;
By Nick Cunningham - Jul 12, 2018, 4:00 PM CDT

Looking at GDP per capita, the US is $59,500. Venezuela is $12,400. Many of the Caribbean nations are between 17,000 and 26,000. Cuba, the longest running example of a government run economy, is only $6,400, while nearby Bahamas is $25,000.

Cuba is a fifth of its neighbors, and a tenth of the US.

And into this performance record, the Democrats are embracing socialism.

Socialism seems to be working quite nicely in Norway where the GDP per capita is $62,510.

yeah the things you can do w/o a giant underclass....

s/b a winner for the D's w that Ocasio-Cortez genius as the face of it all....hahhahah fvcking awesome!!!! run on it...I dare ya...

[Mister Moose]

Socialism seems to be working quite nicely in Norway where the GDP per capita is $62,510.

First of all, Norway is not a socialist state, it is a hybrid.
Second, it is extremely fat on exports, especially oil and gas. Norway has a positive trade balance of 19B on a GDP of $398B. They have money to spend most countries don't.

However, oil exports peaked in 1998, and are now down by half that. While they have done a good job of managing their version of public/private distribution, they have done so at a huge expense, and it remains to be seen how well that survives a decreasing export income.

US GDP 19,460B
US Trade Balance -568B

Ratio = -2.9%

Norway GDP 398B
Norway Trade Balance +19.2B

Ratio = +4.8%

So we are bleeding 3% of our economy, while Norway is banking 5% of theirs.

If you want to be Norway, you'll need to first 1) Support far greater oil and gas production, and 2) Support reversing the trade imbalance.

[madhatter]

Socialism seems to be working quite nicely in Norway where the GDP per capita is $62,510.

First of all, Norway is not a socialist state, it is a hybrid.
Second, it is extremely fat on exports, especially oil and gas. Norway has a positive trade balance of 19B on a GDP of $398B. They have money to spend most countries don't.

However, oil exports peaked in 1998, and are now down by half that. While they have done a good job of managing their version of public/private distribution, they have done so at a huge expense, and it remains to be seen how well that survives a decreasing export income.

US GDP 19,460B
US Trade Balance -568B

Ratio = -2.9%

Norway GDP 398B
Norway Trade Balance +19.2B

Ratio = +4.8%

So we are bleeding 3% of our economy, while Norway is banking 5% of theirs.

If you want to be Norway, you'll need to first 1) Support far greater oil and gas production, and 2) Support reversing the trade imbalance.

and lighten up....

[Kpdemello]

First of all, Norway is not a socialist state, it is a hybrid.

I guess it all depends on how you define the term socialist. I'd argue there's no pure socialist states that exist in the world today, and that every country is a hybrid. Even Venezuela is not a pure socialist state. There are numerous privately owned businesses in Venezuela, including McDonald's franchises, to name one type.

Second, it is extremely fat on exports, especially oil and gas. Norway has a positive trade balance of 19B on a GDP of $398B. They have money to spend most countries don't.

However, oil exports peaked in 1998, and are now down by half that. While they have done a good job of managing their version of public/private distribution, they have done so at a huge expense, and it remains to be seen how well that survives a decreasing export income.

US GDP 19,460B
US Trade Balance -568B

Ratio = -2.9%

Norway GDP 398B
Norway Trade Balance +19.2B

Ratio = +4.8%

So we are bleeding 3% of our economy, while Norway is banking 5% of theirs.

If you want to be Norway, you'll need to first 1) Support far greater oil and gas production, and 2) Support reversing the trade imbalance.

That is not how trade imbalance works as the net effect of a trade surplus is not "They have money to spend most countries don't." That's silly.

Here's some educational reading for you:
https://www.investopedia.com/articles/i ... eficit.asp" onclick="window.open(this.href);return false;

And a key quote:

Economic theory suggests that persistent trade deficits will be detrimental to a nation's economic outlook by negatively impacting employment, growth, and devaluing its currency. The United States, as the world's largest deficit nation, has consistently proven these theories wrong. This may be due to the special status of the United States as the world's largest economy and the dollar as the world reserve currency.

[Mister Moose]

First of all, Norway is not a socialist state, it is a hybrid.

I guess it all depends on how you define the term socialist. I'd argue there's no pure socialist states that exist in the world today, and that every country is a hybrid. Even Venezuela is not a pure socialist state. There are numerous privately owned businesses in Venezuela, including McDonald's franchises, to name one type.

Here's two tests that might clarify your vision.

Which countries set prices, as opposed to prices being set by the individual company or merchant?
Which countries nationalize (some) industries, where the government owns and directs the means of production?

That is not how trade imbalance works as the net effect of a trade surplus is not "They have money to spend most countries don't." That's silly.

What's silly is that this eludes you: When you sell more dollar volume than you buy, you have money left over.

[Kpdemello]

Here's two tests that might clarify your vision.

Which countries set prices, as opposed to prices being set by the individual company or merchant?
Which countries nationalize (some) industries, where the government owns and directs the means of production?

All of them. For example, the U.S. sets prices for utilities in many areas, and owns and directs the means of production for certain utilities as well. See here: https://www.tva.gov/" onclick="window.open(this.href);return false;

So look, Venezuela is way out toward being more socialist than most, but Norway is certainly more socialist than the U.S. is. It's just a question of degree. Socialism isn't evil, it's just a political theory that works in some areas and doesn't work in others. To make a blanket statement that socialism doesn't work is just as ignorant as believing pure socialism is the ideal.

What's silly is that this eludes you: When you sell more dollar volume than you buy, you have money left over.

I understand that is what you think, but that is not how it works. Go read that article I cited to you. The short explanation is that the money that a business gets from selling stuff overseas goes into the coffers of the business, not the government. If there's a trade deficit, the money that is sent overseas isn't taken from the government. Theoretically over time a deficit can devalue the currency as more currency is sent overseas but in practice foreign investment can often make up for the loss of currency overseas. Also see how the article cites the United States as an example of a country that has had a trade deficit for decades and yet has had the strongest economy in the world over that same time.

[Kpdemello]

Upon reflection I have a concrete example for you.

Joe the Plumber buys a Toyota Tacoma to use in his business. Joe doesn't sell anything overseas, as he's a plumber. Instead he makes 100k a year doing plumbing work in the U.S., using his foreign-purchased truck. Joe has a net trade deficit with Japan. Does Joe have less money because of it? No, because he's using that foreign-made truck to make money domestically. This happens even though Joe never sells anything to Japan, and Joe is happy and doing quite well.

Now extrapolate to the macro level. Millions of businesses and people buy stuff from overseas companies. While yes they give up money, they actually get stuff in return, and they can use that stuff productively, be it computers, cars, or whatever. Domestic economic growth can easily exceed the amount that is sent overseas in trade deficit. You also have to consider that foreigners are investing in the U.S. economy in the form of U.S. treasury bonds, stocks, or even direct investment, so often times that money comes back to our economy whether or not the stuff we buy overseas is being used productively domestically.

Is a net trade deficit bad? I would think in the long run that it would be, but like the article says, we've had a net trade deficit for decades and it has not been an issue. Will it some day? Maybe. I don't think economists really know or agree on that point. But to suggest that because a country has a trade deficit that it will have less money to spend on domestic welfare programs is just not factual and is based on a fundamental misunderstanding of how foreign trade works.

[Mister Moose]

Here's two tests that might clarify your vision.

Which countries set prices, as opposed to prices being set by the individual company or merchant?
Which countries nationalize (some) industries, where the government owns and directs the means of production?

All of them. For example, the U.S. sets prices for utilities in many areas, and owns and directs the means of production for certain utilities as well. See here: https://www.tva.gov/" onclick="window.open(this.href);return false;

Utility, ie infrastructure, vs industry. Yes, you can get mired in all kinds of exceptions, but that just makes you focusing on the noise instead of the big picture.

Upon reflection I have a concrete example for you.

Joe the Plumber buys a Toyota Tacoma to use in his business. Joe doesn't sell anything overseas, as he's a plumber. Instead he makes 100k a year doing plumbing work in the U.S., using his foreign-purchased truck. Joe has a net trade deficit with Japan. Does Joe have less money because of it? No, because he's using that foreign-made truck to make money domestically. This happens even though Joe never sells anything to Japan, and Joe is happy and doing quite well.

Joe has no trade imbalance, he pays his money to a US owned car dealership. See how easy and pointless this nit picking on details is instead of thinking about the big picture?

Now extrapolate to the macro level. Millions of businesses and people buy stuff from overseas companies. While yes they give up money, they actually get stuff in return, and they can use that stuff productively, be it computers, cars, or whatever. ( <-- This sentence has absolutely no bearing on trade balance) Domestic economic growth can easily exceed the amount that is sent overseas in trade deficit. You also have to consider that foreigners are investing in the U.S. economy in the form of U.S. treasury bonds, stocks, or even direct investment, (This is known as "buying stuff", see my original point*) so often times that money comes back to our economy whether or not the stuff we buy overseas is being used productively domestically.

Is a net trade deficit bad? I would think in the long run that it would be, but like the article says, we've had a net trade deficit for decades and it has not been an issue. Will it some day? Maybe. I don't think economists really know or agree on that point. But to suggest that because a country has a trade deficit that it will have less money to spend on domestic welfare programs is just not factual and is based on a fundamental misunderstanding of how foreign trade works.

I smoked cigarettes for decades, will it be bad for me? I paid my bills chronically late, will it be bad for me? I didn't save anything I earned, will it be bad for me? I mean the fact that the immediate consequence is not apparent to me must mean it isn't bad....


* ...this eludes you: When you sell more dollar volume than you buy, you have money left over.

[Mister Moose]

What's silly is that this eludes you: When you sell more dollar volume than you buy, you have money left over.

I understand that is what you think, but that is not how it works. Go read that article I cited to you. The short explanation is that the money that a business gets from selling stuff overseas goes into the coffers of the business, not the government. If there's a trade deficit, the money that is sent overseas isn't taken from the government. Theoretically over time a deficit can devalue the currency as more currency is sent overseas but in practice foreign investment can often make up for the loss of currency overseas. Also see how the article cites the United States as an example of a country that has had a trade deficit for decades and yet has had the strongest economy in the world over that same time.

There's 3 things going on here you have overlooked.

1) The export of oil and gas does bring large amounts of cash directly to the government:
"...combined, oil and gas equals about half of the total value of Norwegian exports of goods. "
https://www.norskpetroleum.no/en/produc ... l-and-gas/" onclick="window.open(this.href);return false;
In 2017 this was 53 Billion, almost all exported. So yes, this is cash going directly into the coffers of government, to the tune of 13% of their economy, contributing significantly to their high per capita GDP.

2) With very high taxes, (VAT is 25%, personal income tax rates border 55%, corporate profits tax ranges from 28% to as high as 78%. ) income of all the other exporting companies is partially collected by the government as well.

3) When I said, They have money to spend most countries don't, the "money" includes both public and private. "They" is the entire country. It includes the vast oil revenue. There is a net retention of $19 Billion, and that money has to reside somewhere. You, for some reason, focus on how it might be in some particular exporter's pocket, "not the government".

[Kpdemello]

You are over simplifying things to come up with the wrong answer. You are forgetting that when someone purchases something from overseas and uses currency to do it that they get something back of equal value that adds to the domestic economy.

All that I can say is you should probably study economics a little more before trying to develop an opinion about trade deficit. Even Economist argue about whether they are good or bad and what to do about them.