tag:blogger.com,1999:blog-6574722.post8787465987875639851..comments2023-10-26T02:13:30.025-07:00Comments on A View to the South: Venezuela: Chavez Stops Inflation in its Tracksleftsidehttp://www.blogger.com/profile/00676827005815770066noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6574722.post-26194186227637563212007-04-04T10:50:00.000-07:002007-04-04T10:50:00.000-07:00Ok, ok I muffed this one. I know what a VAT is, ha...Ok, ok I muffed this one. I know what a VAT is, having lived in England, but for some reason just used the first <A HREF="http://www.fedex.com/us/international/irc/profiles/irc_ve_profile.html?gtmcc=us" REL="nofollow">link</A> that popped up. A VAT is also paid on customs though besides each link in the production. <BR/><BR/>The cutting off zeroes and introducing the old bolivar fuerte coin are psycological measures. As currency valuation is based on the security one feels in the Bolivar. The true test to see if that had some impact will be next month, don't you agree? If the VAT had an immediate effect (that again only 1 of 12 predicted - I doubt you would have been that bullish - you neglected that argument) then to sustain the declining inflation next month would be a result of the other moves. We'll see...leftsidehttps://www.blogger.com/profile/00676827005815770066noreply@blogger.comtag:blogger.com,1999:blog-6574722.post-4102280561265144572007-04-04T06:24:00.000-07:002007-04-04T06:24:00.000-07:00Once again, it is YOU who do not understand simple...Once again, it is YOU who do not understand simple economics. Please research "Value Added Tax" and you'll see that it is "...applied to the value added to the goods at each stage of production" and is irrelevant to whether that transaction is from abroad or from resources in Venezuela. It is regressive and I applaud the move. And yes, of course the prices dropped because there were immediate reductions in the cost to middlemen, distributors, vendors, etc... Again, I'm not sure why anyone can take you seriously given your shallow understanding of how the real world works.<BR/><BR/>And do you believe that dropping zeros from the currency will help the economy? I wonder why you've failed to discuss that. Isn't it because that was simply a cosmetic move without any real economic benefit?<BR/><BR/>Again, I applaud the reduction of the VAT and would recommend that it is scrapped all together. I've never met a tax cut I didn't like. I bet sooner rather than later, the Venezuelan gov't will drop it entirely in order to maintain control over growth. Mark my words.jsbhttps://www.blogger.com/profile/16526596147319229399noreply@blogger.comtag:blogger.com,1999:blog-6574722.post-81689631219438104562007-04-03T09:11:00.000-07:002007-04-03T09:11:00.000-07:00No JSB, it is you who does not know what a Value A...No JSB, it is you who does not know what a Value Added Tax (VAT) is. It is a tax placed only on foreign imports. The inflation pressures were not being caused directly by the price of foreign goods. If you read the likes of Romero and NY Times, they tell us that the inflation pressures were a result of Government spending and domestic price controls. So yes maybe the price of selected foreign goods dropped, but nobody predicted this kind of immediate effect (ok well 1 of 12 Bloomberg economic experts did). So for you to say "of course prices dropped" is disingenous at best.<BR/><BR/>The fact that the original Times article did not mention the VAT reduction is just another stain on their journalism, not mine. Why did they not include it I wonder?leftsidehttps://www.blogger.com/profile/00676827005815770066noreply@blogger.comtag:blogger.com,1999:blog-6574722.post-89488861748787758412007-04-03T05:39:00.000-07:002007-04-03T05:39:00.000-07:00You really DON'T understand how economics works, d...You really DON'T understand how economics works, do you... Of course prices dropped because a built in part of that price has been removed. It is only a temporary solution. The "Demagoguery and showmanship" was refering to the slashing of 0's from the currency which did NOTHING to change anything. These are two different issues, but then again making distinctions doesn't suit your apologist agenda.jsbhttps://www.blogger.com/profile/16526596147319229399noreply@blogger.com