Happy New Year! (Unless you live in Venezuela)

A few years ago, I shared a New Year's Night Party with some Venezuelan friends. I learned that night that Venezuelans are super friendly, generous, and throw some great parties.

Unfortunately, there won't be a lot of parties in Caracas this year. The main reason is the economy and all of the shortages about everything, from lemon to lime to rice.

How bad are things down in Venezuela?  The answer is very bad, as Nathaniel Parrish Flannery wrote this month:

"Venezuela’s economy is likely to continue to languish in 2015 with inflation and shortages worsening. Even though it will exacerbate the country’s current economic crisis, correcting the exchange rate and eliminating the current nonsensical multi-tiered system is one of the most prudent policy actions Maduro could take to improve Venezuela’s medium and long term economic outlook.     

According to Anabella Abadi, public policy analyst at the Caracas based consultancy ODH Grupo Consultor, “Venezuela’s economy is expected to contract in 2014 and 2015, and even though it’s already recognized as the 14th least competitive economy in the world (according to the World Economic Forum) and the eighth-worst economy for doing business (according to The World Bank), Maduro’s laws seem to discourage private investments even more...”   

Maduro’s actions aren’t likely to kickstart economic growth and bring Venezuela’s economy to an even keel. “It’ll be impossible to control inflation if the government continues to increase the amount of money circulating in the economy without a proportionate increase in the supply of goods and services. This increase in the supply side will be impossible if the central government doesn’t work with the private sector to reactivate the production apparatus,” Abadi added.     

...Until Madero addresses Venezuela’s exchange rate problems, the situation isn’t likely to improve. Few observers are optimistic. 

According to Pedro Burelli, a former board member of state-owned oil company, Petroleos de Venezuela, "You take fragmentation of political power, a dire political situation, high social expectations, no cash, and a lot of people involved, and that to me is the recipe for a mess.” "

It's a first rate mess.  Indeed!

What does this mean to us watching bowl games or our favorite NFL playoff games?

First, it's likely that Venezuela will implode in 2015. It owes money to a lot of countries, like China, who will look to get paid. I'm not suggesting that China will send its gunboats to collect but they will do something.

Second, Venezuela has been subsidizing regimes in Cuba, Bolivia, Ecuador, and Nicaragua. We may see a few dominoes fall after Venezuela goes down.

To say the least, Venezuela's implosion will have serious implications in our neighborhood.

P. S. You can hear CANTO TALK here & follow me on Twitter @ scantojr.

A few years ago, I shared a New Year's Night Party with some Venezuelan friends. I learned that night that Venezuelans are super friendly, generous, and throw some great parties.

Unfortunately, there won't be a lot of parties in Caracas this year. The main reason is the economy and all of the shortages about everything, from lemon to lime to rice.

How bad are things down in Venezuela?  The answer is very bad, as Nathaniel Parrish Flannery wrote this month:

"Venezuela’s economy is likely to continue to languish in 2015 with inflation and shortages worsening. Even though it will exacerbate the country’s current economic crisis, correcting the exchange rate and eliminating the current nonsensical multi-tiered system is one of the most prudent policy actions Maduro could take to improve Venezuela’s medium and long term economic outlook.     

According to Anabella Abadi, public policy analyst at the Caracas based consultancy ODH Grupo Consultor, “Venezuela’s economy is expected to contract in 2014 and 2015, and even though it’s already recognized as the 14th least competitive economy in the world (according to the World Economic Forum) and the eighth-worst economy for doing business (according to The World Bank), Maduro’s laws seem to discourage private investments even more...”   

Maduro’s actions aren’t likely to kickstart economic growth and bring Venezuela’s economy to an even keel. “It’ll be impossible to control inflation if the government continues to increase the amount of money circulating in the economy without a proportionate increase in the supply of goods and services. This increase in the supply side will be impossible if the central government doesn’t work with the private sector to reactivate the production apparatus,” Abadi added.     

...Until Madero addresses Venezuela’s exchange rate problems, the situation isn’t likely to improve. Few observers are optimistic. 

According to Pedro Burelli, a former board member of state-owned oil company, Petroleos de Venezuela, "You take fragmentation of political power, a dire political situation, high social expectations, no cash, and a lot of people involved, and that to me is the recipe for a mess.” "

It's a first rate mess.  Indeed!

What does this mean to us watching bowl games or our favorite NFL playoff games?

First, it's likely that Venezuela will implode in 2015. It owes money to a lot of countries, like China, who will look to get paid. I'm not suggesting that China will send its gunboats to collect but they will do something.

Second, Venezuela has been subsidizing regimes in Cuba, Bolivia, Ecuador, and Nicaragua. We may see a few dominoes fall after Venezuela goes down.

To say the least, Venezuela's implosion will have serious implications in our neighborhood.

P. S. You can hear CANTO TALK here & follow me on Twitter @ scantojr.