RE: ADSactly World - Venezuela and the currency exchange control
which consists in taking the currency of the country and forbid exchanging it for other currencies.
First thing that pops in my head is this question “What’s the point of doing it, if that automatically devalues the curency?”.
Yes, it is completely absurd to think that forbidding individuals to do what they want with their own property such as capital... just like you pointed out, people justifying this are the once who make the system or the once who are completely uneducated and agree with anything their government says and does.
... Now imagine doing that over and over again, day after day, year after after.
That’s crazy and really frustrating for people who know what is going on. And there is nothing they can do about it. Except leave the country, if that is even a possibility. It must be very difficult to do business as a general contractor. One day you give a proposal, the next day you sign a contract. Than the same day you should buy all required material and finish the job in order to get paid as quickly as possible. Otherwise you are risking loosing money before you even start. In US, when I give a proposal, I usually make it valid for up to 3 months, expecting the inflation to increase in a faster rate than in the past. But to be worried and uncertain what happens in the next few days is just unimaginable for me doing any business. I say “RUN”.
As mentioned in the article, the excuse was because rich people were free to take their money to other countries, and since political movements like the one currently ruling in Venezuela are mostly driven by envy, they didn't like rich people doing with their property what they wished, hence the currency exchange control was implemented.
But the real reason, as explained in the article, is that it allows people in the government to multiply their money by buying cheap dollars using the official exchange rate, and then selling it at the black market rate to citizens desperate to escape the high inflation.
USA and its stability is like a paradise compared to what happens in Venezuela. You mentioned the inflation in America which is like 2% a year right? Well, 2% is like a boring Monday in Venezuela :)