The United States froze the personal assets of Venezuelan President Nicolás Maduro on July 31 in response to what the international community considered rigged elections in the troubled South American nation. For the people of Venezuela, however, the sanction is of little consequence as their economy spirals toward hyperinflation.
“Inflation has been practically institutionalized in Venezuela, eroding the income and savings of the citizens,” wrote Willians Ruiz, director of the Venezuelan libertarian think tank Instituto Mises, in an article on the organization’s website.
He says that after taxation and oil revenue could no longer fund populist state programs, the government had to resort to increased money printing to keep financing its expenditures. Now, with inflation at more than 950 percent according to calculations by Johns Hopkins University professor Steve Hanke, and with shortages of even the most basic goods, it seems there is nothing left to take.
But how does a country relatively rich in oil descend into economic oblivion? Fergus Hodgson, editor of the intelligence publication Antigua Report, says it is because of the systematic dismantling of the market economy and government corruption, mostly during the Chávez regime.
