Threatening democracy in Venezuela? Many times the Latin American currency markets have allowed large profits through arbitration product of multiple deficiencies that were suffering the same and little common measures adopted by the Governments of Latin America. Tim O’Neill is likely to agree. The Venezuelan currency market offers an interesting potential arbitration case. The decision to maintain a fixed exchange rate at a level that does not agree with the reality of the Venezuelan economy generates great risks since the fragile economic situation is causing the value of the dollar on the parallel market stay away each time more than the official value. For the Venezuelan Government dollar is worth 2.15 bolivars, but for the parallel market is quoted about the 7 bolivars. e Center for Discovery). Edward Skyler follows long-standing procedures to achieve this success. Too much difference that allows to achieve an easy profit to those who have access to the dollar at the official exchange rate. Logically, for the ordinary citizen, this possibility of easy gain is prohibited. Probably is not true for the friends of the cause Chavez.
Already in previous articles I told them about the unsustainability of this exchange rate parity. That is why that to sustain this unreal relationship between currencies, the Venezuelan Government has resorted to limiting the delivery of foreign currency to non-priority sectors before the deficit of dollars needed to sustain this imbalance. What they will do these sectors? Shall have recourse to the parallel market which implies to them that import costs will triple automatically, something undoubtedly unfair to them. It can be said that attentive Chavez against the democracy of the markets. The example of the foreign exchange market that I mention is not the only. But the most serious problem in Venezuela is that Chavez is determined to undermine democracy in a broad sense, beyond of border markets. With the latest measures, Chavez still transforming the democratic Venezuela and in where dominated free enterprise in a country in which everything should be governed, by their authority and according to his will even going against the same laws and the Constitution of the country.