Two drones filled with explosives were recently deployed in a failed assassination attempt to take out Venezuelan President Nicolas Maduro. Chaos filled the streets as the military ran for their lives. But this sort of pandemonium is commonplace in Venezuela today: Where citizens have run out of basic necessities such as toilet paper and have begun eating their pets in order to stay alive. The mainstream Keynesian-brainwashed media doesn’t talk much about Venezuela or hyperinflation; perhaps because they are viscerally aware that the seeds of intractable inflation on a worldwide basis have already been sown by the global elites–and they don’t want to frighten you.
Venezuela is currently in the throes of hyperinflation on a massive scale. The communist-led government has mismanaged its economy into a fiscal catastrophe. Among other things, skilled farmers were thrown off their land and replaced by government apparatchiks that are untrained and incapable of producing enough food to feed the people. Oil production also waned due to mismanagement and corruption. To smooth over the government’s mounting debt it printed massive amounts of money in response to rising budget deficits. The currency plummeted, and foreign denominated debts were defaulted on.
The International Monetary Fund is forecasting a 2,349% inflation rate for Venezuela this year. The Venezuelan people are starving and leaving the country in droves—the nation is a modern-day cautionary tale of what happens when fiat money dies.
And while Venezuela is the poster child of failing economies, there are other deteriorating economies around the globe that are not far behind. Turkey is another economy on the brink of a hyperinflationary death spiral.
Turkey’s lira has weakened over 40% against the dollar this year and is now near all-time lows. This is leaving Turkey in a no-way-out position as it attempts to repay debt denominated in non-domestic currencies like the dollar and the euro. Turkish banks and corporations have billions of dollars’ worth of foreign-currency debt coming due that they will find nearly impossible to service with the Turkish lira in freefall.
In addition to corporate debt, Turkey’s government depends heavily on short-term “hot money” to fund its current account deficit. This deficit has widened in recent years as President Erdogan, in a desperate bid to stay in power, garnered favor with stimulus measures including interest rate cuts, loan guarantees, infrastructure spending and tax breaks after the failed 2016 coup. And now we have US sanctions, which if fully enacted will ensure the Turkish economy’s baneful fate.
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