Socialism in Venezuela: Dollarization of the Economy?

Today, Nicolás Maduro, leader of the socialist revolution and current president of Venezuela, "disputes" the presidency of the "republic" in an "electoral contest" against Henri Falcon, opponent of false flag, and Javier Bertucci, ex- evangelical pastor.

There really is not much to talk about about these elections, because like almost all of them, it's just the montage of a terrible play called democracy, in which politicians act so that people see it while pretending that the events were not carefully written by a scriptwriter, who in this case, is Maduro or whoever thinks for him.

Maduro proposes to renew his mandate, but according to him, with more experience and with the help of the Petro. Bertucci, on the other hand, proposes to solve the problems with international humanitarian aid. Finally, Henri Falcon proposes to dollarize the economy.

Based on these ideas, the whole depressing electoral spectacle is composed, although that really does not matter, because the real objective of these elections is to try to validate Venezuelan democracy before international public opinion.

However, I do want to talk about something specific and that has called the attention of a large part of the population, which is the issue of the dollarization of the economy, that is, supplanting the national currency for US dollars.

This idea is appealing to different sectors of the country, especially in the "middle class", which sees in dollarization the opportunity to keep their businesses running, since inflation is currently causing them to decapitalize.

The dollarization proposes to use the international reserves that Venezuela has to replace the national currency for dollars. Those who propose this strategy, argue that the state would lose control of the issuance of money, and therefore, inflation would be reduced immediately, and that wages would increase.

Very nice everything, but no, the problem is a little more complicated than that, it's not just about replacing one piece of paper with another.

The problem that the economy of Venezuela suffers is simple; production is not enough to meet the needs of all people, import is high, but not enough to fill the gap left by the national industry, exports, basically oil, have decreased, so the national currency is it depreciates in correlation to others, and finally, the monetary issue excessively exceeds the amount of goods and services available.

That is the cause of the high inflation currently suffered by the Venezuelan economy.

Can dollarization solve the problem?

No, dollarization by itself could only ruin the economy even more. Dollarization must be accompanied by a set of economic measures to solve the fundamental problem, and that problem is basically that there are not enough goods and services for people.

If the dollarization is accompanied by an injection of capital to the national industry with the objective of increasing production, in addition to establishing measures to prevent the capital flight from oil revenues, then yes, it is possible that apart from delivering the entire economy to the international banking, moderate success is obtained; otherwise not.

For this model to work, it will probably be necessary for Venezuela to borrow from international banks,with the same people who have been financing Maduro and his government all these years, and even then, there are no guarantees in this regard, because analysts say that dollarization has been implemented before and has been successful, but I fear that in the case of Venezuela is not the same, because this time the problem is not only the high monetary emission, but also the low production of goods and services, without counting that it is an oil country.

This is how I determine that dollarization would eventually bring more harm than benefits, because if according to those who propose this mechanism, the big problem is that the State prints a lot of money to finance itself, so, what makes me suppose that the problem in the future will not be the propensity to seek financing on debt?

Debt makes people slaves of interests.

The economic problem that Venezuela faces is a production problem, and that must be solved as such. It must be produced, and the only way in which Venezuela can do it is by dismantling socialism; removing price control, labor legislation, exchange control, as well as providing legal security to the owners.

If production increases, importation will not be much needed, if production increases the currency will not be devalued because the products will have international demand, in fact, if production increases enough, i|t is possible that the amount of money circulating becomes insufficient..

The economy is simple, you must sow and harvest what you are going to eat, the only thing that must be done is to eliminate the impediments that the industrial and agricultural sector currently has, so that production can solve the problem.

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