http://ca.news.yahoo.com/venezuela-president-vows-no-letup-price-gouging-crackdown-010034869--sector.html
National Guard soldiers occupied electronic good stores on Saturday
Submitted by Tyler Durden on 11/13/2013 12:40 -0500
Submitted by Tyler Durden on 11/12/2013 14:47 -0500
Submitted by Tyler Durden on 11/09/2013 11:46 -0500
CARACAS, Nov 14 (Reuters) - Venezuela's socialist government has arrested more than 100 "bourgeois" businessmen in a crackdown on alleged price-gouging at hundreds of shops and companies since the weekend, President Nicolas Maduro said on Thursday.
"They are barbaric, these capitalist parasites!" Maduro thundered in the latest of his lengthy daily speeches. "We have more than 100 of the bourgeoisie behind bars at the moment."
The successor to the late Hugo Chavez also said his government was preparing a law to limit Venezuelan businesses' profits to between 15 percent and 30 percent.
Officials say unscrupulous companies have been hiking prices of electronics and other goods more than 1,000 percent. Critics say failed socialist economic policies and restricted access to foreign currency are behind Venezuela's runaway inflation.
"Goodyear has to lower its prices even more, 15 percent is not enough, the inspectors have go there straightaway," Maduro said in his evening address, sending officials to check local operations of the U.S.-based tire manufacturer.
Since the weekend, soldiers and inspectors have gone into 1,400 shops, taken over operations at an electronics firm and a battery-making company, and rounded up a handful of looters.
The move - Maduro's boldest since taking office in April - is reminiscent of the dramatic governing style of Chavez, who nationalized swaths of the OPEC member's economy during his 14-year socialist rule.
Like Chavez, Maduro says he is defending the poor.
The inspections have shaken Venezuela three weeks before local elections that his opponents are casting as a referendum on the 50-year-old former bus driver. Maduro has made preserving Chavez's legacy the mainstay of his government and has been matching his former mentor's anti-capitalist rhetoric.
"It's time to deepen the offensive, go to the bone in this economic war," he said.
Only a few of the hundreds of shops targeted with surprise inspections had been found to be offering "fair prices," officials say. Some businesses are voluntarily lowering prices - or staying closed - in case the inspectors come.
"We've reduced everything by 10 to 15 percent, but it's not fair. I can't make a profit now," said the owner of one small electronics store, who asked not to be identified.
"I agree they should go for the big fish, the real speculators, but they risk hurting us all."
Venezuela's official inflation, 54 percent annually, is the highest in the Americas.
Maduro said the forced price discounts should lead to negative inflation of 15 percent in November and 50 percent in December - forecasts that brought immediate mockery from critics on Twitter.
CROWDS AT SHOPS
Around Caracas and other major cities, crowds of shoppers are flooding electronics, clothing and other outlets where price cuts are anticipated. There has been some violence.
The Venezuelan Observatory of Social Conflicts reported 39 incidents of looting or attempted looting since Friday. "We ask officials to moderate language in speeches that could be interpreted as calls to violence," the local non-governmental organization said.
The rhetoric on both sides is becoming more strident.
The campaign to reduce prices and blame entrepreneurs may play well with Maduro's power base among the poor and could help unite factions within the ruling Socialist Party.
Given Venezuelans' anxiety over inflation, and scarcities of basic goods from toilet paper to milk, Maduro was risking a backlash at the December 8 nationwide municipal elections.
Plenty of Venezuelans have applauded his measures, saying price hikes were out of control, while others have expressed fears that Maduro could be uncorking dangerous forces.
Critics say the moves do not tackle the roots of Venezuela's economic malaise, like an overvalued bolivar that forces many importers to buy black-market dollars and then pass those costs on to consumers.
The government has ordered local telecom companies to block various websites showing the bolivar at 10 times the official rate of 6.3 to the greenback on the illegal market.
Prominent pro-opposition columnist Nelson Bocaranda said Maduro's economic policies were "chillingly similar" to those of Zimbabwean President Robert Mugabe. The African leader also used security forces to enforce a price crackdown in 2007.
Opposition party Justice First accused the state of hypocrisy, saying its stores were also hiking prices unjustifiably.
An imported sandwich toaster, for example, that costs $34.99 in the United States, was selling at a fivefold markup of 1,100 bolivars ($175 at the official exchange rate) in state supermarket chain Bicentenario, it said.
"This shows the economic chaos Maduro has got us in where prices have no logic. The government created this monster and now tries to pretend it will control it, but Venezuelans cannot be deceived by this electoral show," Justice First said.
Like Chavez on several occasions, Maduro is seeking decree powers from Congress, which granted preliminary approval on Thursday. He says he needs the Enabling Law to fix the economy, but critics accuse Maduro of simply amassing power.
http://www.bbc.co.uk/news/world-latin-america-24897407
( What happens after all the goods in stores are looted - anyone think said stores restock anything ? Wonder if Maduro has thought that far ahead ? Nah , of course not......)
Venezuelan President Maduro 'to expand price controls'
National Guard soldiers occupied electronic good stores on Saturday
Venezuelan President Nicolas Maduro says he plans to extend price controls to all consumer goods, if he is given powers to govern by decree.
In a televised address, Mr Maduro said that he wanted to set legal limits on businesses' profit margins.
His announcement followed the seizure on Saturday of shops accused of selling electronic goods at inflated prices.
The National Assembly is expected to vote this week on his request to govern temporarily by decree.
'Theft'
The president demanded there be "zero tolerance with speculators" in his speech broadcast on Sunday. "This is beyond usury, this is theft," he added.
On the weekend, soldiers occupied a chain of shops selling electronic goods which, according to Mr Maduro, had sold items at vastly inflated prices.
Hundreds of people flocked to the Daka stores after they were forced by the government to sell their goods at lower prices, some of them at a quarter of the price listed earlier in the week.
"We're doing this for the good of the nation," the president said, accusing the managers of the stores of waging an "economic war" against Venezuela.
He also announced the arrest of five managers from the Daka, JVG and Krash electronics stores on suspicion of hiking up prices.
Five more people were arrested for allegedly looting a Daka shop in the city of Valencia.
But President Maduro said reports of looting had been exaggerated by factions of the press, which he accused of "complicity with the bourgeois parasites".
'Cuban puppet'
The president announced that he would next turn his attention to stores selling toys, cars, food items, textiles and shoes.
Opposition leader Henrique Capriles said the move proved that the president "is a failed puppet of the Cuban government".
"Every time he opens his mouth, he scares away the investments that create employment, and he worsens the crisis," said Mr Capriles, who narrowly lost to Mr Maduro in April's presidential election.
Official figures suggest inflation is running at more than 50%. Price hikes have become an important issue in next month's local elections.
Mr Maduro blames most of Venezuela's economic woes on "sabotage" by opposition forces, but critics say government mismanagement is behind the country's problems.
Opponents say the president's crackdown on price inflation is an attempt to boost his popularity with poor voters ahead of the local polls on 8 December.
Mr Maduro has asked the National Assembly to give him special powers to fight corruption and "economic sabotage". The measure is expected to be voted on this week.
Watch Socialist Paradise Central Planning In Action: Venezuela Looting Edition
What happens when the government sets the precedent that what was private is now public property? Encouraged by President Maduro's seeming incitement "Leave nothing on the shelves, nothing in the warehouses... Let nothing remain in stock!" crowds of Venezuelans looted the local DAKA stores after the government's 'occupation'... "this is good for the nation," Maduro concluded... You decide...
Some might argue that DAKA (in a mysteriously karmic way) got its back on Maduro as he was propelled from his bike by 'nothing' the day after...
Venezuela Dispatches Army To Enforce Appliance "Fair Price" Ceiling After Looting Ensues
Over the weekend, in "Venezuela Government "Occupies" Electronics Retail Chain, Enforces "Fair" Prices", we reported that unpopular president Nicolas Maduro ordered the "occupation" of a chain of electronic goods stores in a crackdown on what the socialist government views as price-gouging hobbling the country's economy. Various managers of the five-store, 500-employee Daka chain - the local equivalent of Best Buy - have been arrested, and the company would be forced to sell products at "fair prices." Since then things have escalated rapidly. Because as we queried, and many wondered, the first question that arose is how would Maduro i) assure that prices were indeed kept at their "fair values" and ii) how would the cool, calm and orderly social order be preserved when suddenly everyone scrambles to buy all those flatscreens (which may have certain operational problems once the socialist paradise is hit with daily electric brown and blackouts very soon) they have been dreaming of for years. Now we know: with the help of the army.
NBC reports that in his "fight" against the economic "war" that he says the political opposition, in collusion with the United States, is waging against Venezuela, President Nicolas Maduro ordered the military occupation of a chain of electronics stores over the weekend, forcing the company to charge "fair" prices. This is happening hours after Maduro also promised that he will lower prices of mobile phones: will battalion regimens be tasked with making sure iPhone 5S are sold at a net profit for Apple?
But back to serious matters such as how brilliant socialist decrees result in immediate looting:
Pictures shared on social media as well as local newspaper reports said that one store in the country's central city of Valencia faced looting. Some critics suggested that the entire operation was a form of looting organized by the government, just in time for municipal elections in December.
"This is for the good of the nation," Maduro said on state television. "Leave nothing on the shelves, nothing in the warehouses … Let nothing remain in stock!"
Pay attention: this is coming to every "developed" banana republic near you.
Head of the High Commission for the People's Defence of the Economy Hebert Garcia Plaza attempted to explain the government's decision to take over Daka on state television on Friday, accusing the chain of unfair markups.From a Daka store in Caracas, the government minister tweeted a picture of a washer/dryer that "cost 39,000 VEF on November 1 and today costs 59,000 VEF, a nearly 100 percent rise in a week."
And while observed from the outside what is going on in Venezuela is a hoot, it hardly is to those stuck in the socialist paradise:
Local economist Jose Guerra, a former Central Bank official, was critical of not just the events at Daka but the bigger picture. "Food today, hunger tomorrow," he wrote on Twitter.Venezuela's opposition leader, Henrique Capriles, has long blamed the government for the state of the country's economy. On Saturday, he tweeted: "Everything Maduro does leads to further destruction of the economy.""Today it's Daka. Tomorrow it'll be the banks where you save your money," tweeted Maria G. Colmenares, a professor at a local university.Oscar Diaz resorted to sarcasm to make his point: "Daka had flour, sugar, milk and other basics. The shortage is over! Ah sorry, they sell [appliances]! Oops."
At this point there is little left to comment on either Venezuela, or the rest of the world that has adopted the same "fairness doctrine" principle. Best to just sit back and consume the trans-fat free popcorn.
Venezuela Government "Occupies" Electronics Retail Chain, Enforces "Fair" Prices
The socialist paradise that is Venezuela has already shown the Federal Reserve just how the world's greatest "wealth effect" can be achieved courtesy of the Caracas stock market returning over a mindblowing 475% in 2013. Of course, while the US inflation is still slightly delayed (if only for non-core items and those that can't be purchased on leverage) Venezuela's own 50%+ annual increase in prices is only part of the tradeoff to this unprecedented "enrichment" of society, or at least 0.001% of it - after all, it's all about the égalité.
More problematic may be the fact that in addition to a pervasive toilet paper shortage, a collapse in the currency, a creeping mothballing of the local energy industry due to nationalization fears, and a virtual halt of international trade as the country's FX reserves evaporate, Venezuela's relatively new government has adopted arguably the best and brightest socialist policy wielded by both Hollande and Obama, namely the "fairness doctrine."
However, in this case it is not about what is a "fair" tax for the wealthy (as taxes in Venezuela's socialist paradise will hardly do much to build up the desperately needed foreign currency reserves), but what is a "fair" price for electronic appliances like flat screen TVs, toasters, and ACs. The result is that Maduro's government now determines what equilibrium pricing should be.
The reason for this latest socialist victory over the tyranny of supply and demand is that overnight Venezuela's President Nicolas Maduroordered the "occupation" of a chain of electronic goods stores in a crackdown on what the socialist government views as price-gouging hobbling the country's economy. Various managers of the five-store, 500-employee Daka chain have been arrested,and the company will now be forced to sell products at "fair prices," Maduro said late on Friday.
In essence Maduro is simply going now where Abe soon, and Mr. Chairwoman will go eventually, and in an attempt to offset inflation (at last check Y/Y inflation was over 50%) has effectively "nationalized" prices by forcing retail managers to ignore such trivial things as import prices, and to see well below cost, or at what the government has determined is a "fair" price. Maduro has stopped short of more outright nationalizations, in this case saying authorities would instead force Daka to sell at state-fixed prices. Needless to say outright nationalizations are the next step.
That this is the absolute idiocy of any socialist regime in its final, pre-hyperinflation dying throes is well-known to anyone who had the privilege of visiting Eastern Europe just after the collapse of the USSR. However, for the Millennial generation it should serve as a harbinger of things to come to every socialist country that thinks it can rule by central-planning ordain, through a monetary politburo, and is absolutely certain can contain inflation in "15 minutes" or less.
State media showed soldiers in one Daka shop checking the price tags on large flat-screen TVs. And hundreds of bargain-hunters flocked to Daka stores on Saturday morning to take advantage of the new, cheaper prices."We're doing this for the good of the nation," said Maduro, 50, who accuses wealthy businessmen and right-wing political opponents backed by the United States of waging an economic "war" against him."I've ordered the immediate occupation of this chain to offer its products to the people at fair prices, everything. Let nothing remain in stock ... We're going to comb the whole nation in the next few days. This robbery of the people has to stop."The measure, which comes after weeks of warnings from the government of a pre-Christmas push against private businesses to keep prices down, recalled the sweeping takeovers during the 14-year rule of Maduro's predecessor Hugo Chavez.
Venezuela's people obviously are delighted:
"Inflation's killing us. I'm not sure if this was the right way, but something had to be done. I think it's right to make people sell things at fair prices," said Carlos Rangel, 37, among about 500 people queuing outside a Daka store in Caracas.Rangel had waited overnight, with various relatives, to be at the front of the queue and was hoping to find a cheap TV and air-conditioning unit.Soldiers stood on guard outside the store before it opened.
But how is that possible: is the wealth effectfrom a 475% YTD return in the Caracas stock market not enough to make everyone perpetually happy and content?
Or did the uberwealth of the 0.001% not trickle down just yet? No worries: it will only take another executive decree to strip the wealthy of their assets, just like it took one order to determine what is "fair pricing" on 50 inch plasma TV, and to enforce "trickle down" economics in this utopia gone bad.
As for what is left of the remaining retail sector, they have gotten the message:
Opponents also blame excessive government controls and persecution of the private sector for shortages of basic goods ranging from flour to toilet paper, and for price distortions and corruption caused by a black-market currency rate nearly 10 times higher the official price."This ridiculous show they've mounted with Daka is a not-very-subtle warning to us all," said a Venezuelan businessman who imports electronic goods and is an opposition supporter.Under price controls set up a decade ago, the state sells a limited amount of dollars at 6.3 bolivars, but given the short supply, some importers complain they are forced into a black market where the price is nearly ten-fold higher.Maduro showed astonishment at a fridge on sale in Daka for 196,000 bolivars ($31,111 at the official rate), and said an air-conditioning unit that goes for 7,000 bolivars ($1,111) in state stores was marked up 36,000 bolivars ($5,714) by Daka."Because they don't allow me to buy dollars at the official rate of 6.3, I have to buy goods with black market dollars at about 60 bolivars, so how can I be expected to sell things at a loss? Can my children eat with that?" added the businessman, who asked not to be named.
Who expects your children to eat, citizen? After all they didn't build that negative profit margin. Just eat your peas, be replete of hopium, sell for a "fair price", be happy you don't have to sign up for healthcare.ve under gunpoint, and don't forget to sing the praises of a socialist central-planning utopia. And always remember: BTFATH!
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