It’s quite frankly amazing that the socialist government running Venezuela is still standing. That country is a testament to the ability of humans to put up with unimaginable poverty and tyranny without flipping their lids and lynching their leaders.
But alas, socialist governments can only last so long, even when their subjects aren’t actively trying to overthrow them. At a certain point these types of governments simply run out of money, which is what it appears is going to happen in Venezuela.
The Venezuelan government only has $10.5 billion left in foreign reserves, which the government has been using in recent years to pay outstanding debts. In 2015 Venezuela had twice that amount, and it had over $30 billion six years ago. And what’s left of this nation’s reserves is expected to rapidly diminish in the months ahead. Venezuela will have to pay $2.1 billion by this April, and a total of $7.2 billion by the end of the year. Only about $7.7 billion worth of their gold reserves are left after the government had to send some of their bullion to Switzerland last year.
And unlike most countries, Venezuela can’t simply accumulate more debt and inflate their currency. They can’t kick the can down the road anymore. The currency is already practically worthless, and they’ve been struggling to pay their debts for several years. Inflation is expected to increase by 1,660% this year and another 2,880% next year. Unless the price of oil goes up again in the next year or so, then it appears that the Maduro regime will have to default on its debts, which will likely lead to a collapse of the government.
Contributed by Daniel Lang of The Daily Sheeple.