Re:Venezuela’s Currency Has Had its Biggest Monthly Collapse
by csomar on Thursday November 24, 2016 @07:11PM
(#13033626)
Lived in a country with a similar effect albeit very very much lighter.
> but how does that turn into no one being able to buy milk (or other essentials)?
The problem is that these countries come with price controls for basic food. The food can be available on black market. The problem, it's much more expensive to produce than the current price tag on the controlled government market.
So there are two possibilities:
1. The industry goes bankrupt because of the laws. And I witnessed this first hand. I saw people and farmer throw away milk on the street. It makes no economical sense to produce at all.
2. Sell it on the Black market, or smuggle it outside of the country. This will depend on how strong is the local government on controlling borders and commerce.
> but how does that turn into no one being able to buy milk (or other essentials)?
The problem is that these countries come with price controls for basic food. The food can be available on black market. The problem, it's much more expensive to produce than the current price tag on the controlled government market.
So there are two possibilities:
1. The industry goes bankrupt because of the laws. And I witnessed this first hand. I saw people and farmer throw away milk on the street. It makes no economical sense to produce at all.
2. Sell it on the Black market, or smuggle it outside of the country. This will depend on how strong is the local government on controlling borders and commerce.