January 2, 2018

HOW NOT TO FIGHT INFLATION, EXAMPLE #100,000,000,006: Venezuela raises minimum wage by 40% as economic crisis deepens.

President Nicolas Maduro said the new pay level would protect workers against what he called Washington’s “economic war” on socialism.

But most economists say his socialist government is in fact stoking a vicious cycle in a country already wrestling with the world’s fastest inflation.

The new minimum wage will come into force in January, President Maduro announced during a televised end-of-year speech, and follows six previous pay hikes in 2017.

The move is intended to counter quickening inflation coupled with a depreciating bolivar, a situation that has plunged millions of people into poverty in the once-thriving oil-rich nation.

Venezuelans will now earn at least 797,510 bolivars a month, factoring in food tickets – or just over $7 (£5.10) on the widely used black market index. Millions will still be unable to afford three meals a day or basic medicine, while the increase is likely to stoke inflation further.

Maduro’s socialist government is in effect fighting cancer with cigarets.

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