March 2, 2007

Política monetaria de a locha

Quico says: Chávez yesterday on the upcoming monetary reform:
Now, starting on January 1st, a dollar will not be worth two thousand one hundred some odd bolivars, but 2.1 bolivars, that is, we're going to strike three zeros from the bolivar, we're going to change the scale. This will bring a good number of benefits to the country. We're going to end this era of the bolivar's loss of value following Black Friday [February 18th, 1983, when the bolivar slide started,] we're going to end monetary instability in Venezuela.

We're going to see the puyita, the locha, the 12 cent coin, the locha is coming back.

We do it now because no government could've done it earlier because this
isn't something you can just decree, this is something you can do only when the country regains its economic strength, its foreign reserves, the respect Venezuela's economy has around the world, the population, GDP growth, economic growth, political stability, social strength; this will be the new bolivar, along with the new Venezuela.

OK, granted: I'll be happy to see the locha - that charming pecuniary eccentricity - in circulation again (or well, at my age, for the first time.) Though I rather doubt the new batch will read "United States of Venezuela."

The remarkable thing, though, is that as he rattles off every factor he figures matters for monetary stability, Chávez manages to miss every single relevant policy variable. Liquidity growth? Interest rates? Public spending? Central bank autonomy? Whassat?

You'd think that, just by the law of probabilities, he would've mentioned at least one of them. But no.

But never fear. Chávez is going to end monetary instability in Venezuela. No, really, he is. I mean, he said he would. He has the will to end monetary instability in Venezuela. And this is a revolution, so that's all that matters.

Wait, come again? You doubt it?