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And I was complaining this morning about “Snowzilla” covering my car with several feet of snow.
According to Bloomberg, The International Monetary Fund (IMF) has forecast that Venezuela will see an inflation rate of 720% in 2016.
Venezuela’s consumer inflation, already the world’s highest, will more than double this year to a level above all estimates from economists surveyed by Bloomberg, the International Monetary Fund said.
Inflation will surge to 720 percent in 2016 from 275 percent last year, according to a note published by the IMF’s Western Hemisphere Director, Alejandro Werner. That’s nearly quadruple the median 184 percent estimate from 12 economists surveyed by Bloomberg, and exceeding the highest forecast of 700 percent from Nomura Securities.
Spiking prices and widespread shortages for even staples (such as toilet paper) have driven discontent in Venezuela. That helped spur the opposition to gain control of Congress for the first time in a decade as President Nicolas Maduro attempts to turn the tide of what he has deemed an “economic emergency.”
Collapsing oil prices and an abysmal currency exchange rate are compounding Venezuela’s misery. And the is just the official Bolivar exchange rate (not the unofficial rate).
In terms of Venezuela’s sovereign yield curve, it is mostly downward sloping with the peak yield at a crushing 48.04% at the 4 year tenor.
1 year Venezuelan credit default swaps (CDS) are 6 times as large as Greek 1 year CDS. Default on the way?
While the Federal Reserve is finding generating inflation nearly impossible to generate, Maduro and Venezuela have had no problem in creating crushing inflation.
Here is an unenthusiastic Maduro supporter in Venezuela.
And here is an unenthusiastic Maduro supporter in California.
And here is an unenthusiastic Fed Chair Janet Yellen in Washington DC wondering why she can’t generate a target inflation rate of 2%.
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