Inflation rate exceeding 50% in Venezuela

It seems the socialist’s model of a utopia is crumbling at the seams.

Venezuela, a country torn apart and facing immense shortages of basic food items, toiletries and medicine, is facing daily violent protests on the streets, ration cards and political suppression persisted by the Nicolas Maduro administration, a policy that was quite common under the Hugo Chavez reign.

On top of all of this, the Latin American country is undergoing a staggering 56 percent inflation rate and economic analysts are projecting that the levels are going to reach new highs throughout the year.

Despite the central bank and federal government’s disastrous policies, the incumbent president is blaming the rising inflation rate on opposition leaders and Washington lawmakers. This has caused President Maduro to call this an “economic war.”

Although Venezuela prides itself as helping the poor by offering free university education and inexpensive gas, the government isn’t garnering enough revenues to fund its socialist state. The country has tremendous oil reserves, but because of questionable government policies, such as filling a car with gasoline that’s cheaper than a bus ticket, it can’t profit off of it and fund hospitals, schools and roads.

“The guy with an unstabilized economy is subsidizing the guy that has better roads, better inflation and better fiscal figures,” said Alejandro Grisanti, an oil analyst with Barclay’s Capital in New York. “This does not make any sense. The economic and political cost for Venezuela … is huge.”

Opposition leaders cite the rising inflation rate, food shortages and now ration cards as a signal that the socialist-led system is falling apart and much-needed reforms have to take place in order to correct the mistakes of Chavez and now Maduro.

We reported last week that the Venezuelan government would be installing ration cards because of the lack of food supplies at state-run grocery chains Mercal, Bicententario and PDVAL. This move is akin to what has happened previously in socialist and community nations as well as in other Western countries at times of war.

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