I just learned Venezuela's annual inflation is 30%. Increase in minimum wage can't keep up

[emazur]

More juicy bits below...
http://www.csmonitor.com/World/Amer...nezuelans-scoff-at-Chavez-s-minimum-wage-hike

And the numbers are misleading. The government officially sets the dollar exchange rate at 4.30 bolivares, but since the government so tightly controls the disbursement of dollars, the true rate is closer to 8.5 bolivares. Businesses turn to the black market for dollars when they can’t obtain government-subsidized dollars and set their prices accordingly, eroding consumers’ purchasing power even more.

Rising prices are most keenly felt in food costs, which the Central Bank says is the leading driver behind inflation here. The government regulates the price of many basic food brands, but such items are often missing from store shelves, forcing shoppers to buy more expensive imports that account for 70 percent of Venezuela’s food supplies.

 

[noxagol]

Rising prices are most keenly felt in food costs, which the Central Bank says is the leading driver behind inflation here.

No, the only driver of inflation is the Central Bank good sir.

 

[Seraphim]

It's incredible that such backwards nonsense is so widely accepted.

No, the only driver of inflation is the Central Bank good sir.

 

[hugolp]

No, the only driver of inflation is the Central Bank good sir.

Its funny. According to the central bank the rise in prices (of food) is the leading driver behind the rise in prices. So according to the central bank prices rise because prices rise. I guess you need a PhD to arrive to that conclusion.

Next in the "science" of central banking: There is wind because the air moves. Keep tuned for more awesome "scientific" trues from your overlords.

 

[Acala]

"The government regulates the price of many basic food brands, but such items are often missing from store shelves, . . ."

Now THERE'S a surprise! Holding prices down by force causes shortages? Who knew?

This is why we are doomed. Expanding the money supply causes inflation, but politicians are in denial and the public is ignorant so the Fed will keep expanding the money supply and if they don't, politicians will because it eases the pain temporarily. And when prices shoot up, they will hold them down by force because it eases the pain temporarily. And they will blame speculators for price increases and blame hoarders for shortages.

 

[Bossobass]

What I think is funny is that the 'sources' always seem to report inflation 'accurately' when it concerns an 'enemy' of the US, while the US reports it has virtually no inflation.

Venezuela has a recently confirmed $55 Trillion worth of oil reserves that Big Oil gets no share of so I would suspect that they're a target of plenty of covert external forces.

I believe nothing I read or see reported about Venezuela. YMMV.

Bosso

 

[enoch150]

Venezuela was one of the countries covered by MIT's Billion Prices Project. If I remember right, it had the highest inflation rate they covered.

They report the US running at a 3.44% inflation rate (up from 2.5% a year ago) and the world at 5.93% (up from 2.82% a year ago).

 

[AZKing]

It's incredible that such backwards nonsense is so widely accepted.

No kidding... I can't understand how people think "oh, the price of gas going up is CAUSING inflation". That doesn't make sense no matter how you turn it...

I mean, even in high school economics they teach you that price inflation is caused by monetary inflation.

 

[emazur]

No kidding... I can't understand how people think "oh, the price of gas going up is CAUSING inflation". That doesn't make sense no matter how you turn it...

I mean, even in high school economics they teach you that price inflation is caused by monetary inflation.

To be fair, the price of oil can increase due to factors besides dollar inflation (political turmoil, accident at a refinery, etc), and when the price of gas goes up, the price of transporting goods goes up (which inflates prices of goods) and the price of doing business goes up (if you were a tutor who traveled household to household by car and gas prices suddenly tripled, you might eat the cost for a month or two but can only hold out so long before raising your tutoring rates)

 

[hugolp]

To be fair, the price of oil can increase due to factors besides dollar inflation (political turmoil, accident at a refinery, etc), and when the price of gas goes up, the price of transporting goods goes up (which inflates prices of goods) and the price of doing business goes up (if you were a tutor who traveled household to household by car and gas prices suddenly tripled, you might eat the cost for a month or two but can only hold out so long before raising your tutoring rates)

The thing is that if petrol starts going up in price because of decreasing supply, then people will need to spend more money in petrol and less money in other things, therefore the demand for other goods will decrease and so will their price. But when you see that everything is going up in price you know what is happening.

 

[emazur]

The thing is that if petrol starts going up in price because of decreasing supply, then people will need to spend more money in petrol and less money in other things, therefore the demand for other goods will decrease and so will their price. But when you see that everything is going up in price you know what is happening.

This depends on the situation - when I lived in Japan I never drove a car (always used bicycle or train) so an increase in the price of oil didn't directly effect me as I didn't have to spend more on gas and less on other goods. Back in America now and living in the most bicycle friendly city, I have a car but it's very lightly used so an increase in the price of gas still wouldn't directly effect me much. Maybe it's the same for many of you Europeans - haven't been there myself but I hear the mass transportation is good, plus your countries are older and people live closer together and don't have to travel as far, unlike America is a relatively new country that was still developing at the time the automobile became widespread, allowing for more sprawl. I think how the price of oil effects other goods depends on their elasticity. Food, as a whole, is a necessity of life and therefore very inelastic, but gets transported through gas-powered vehicles all over the place. People could cut down on higher priced food, but the price of all food would still go up. As you say, when people spend more money on necessities like food they have less money to pay for other goods which may drive down prices. But in areas where the profit margins are thin (nowadays, maybe computer hardware?) and there are many competitors, the weakest competitors go out of business so supply and competition goes down, causing prices to inflate.