WADR: you missed the relevant points

Posted on: February 10, 2022 at 11:36:28 CT

Venezuela was a highly successful oil exporter and the export earnings financed its excessive spending on social programs. It's oil export earnings evaporated, but it did not rein in spending on social programs. It kept increasing the money supply, but the supply of goods and services did not increase accordingly. The result was inflation and it has extracted a very heavy price on the economy and on the very folks that benefited from Chavez' earlier spending.

The point in the Weimar Germany example is the impact of inflation, the dangers of it and what it can do the social structure if it goes unchecked.

I.e. if the Federal Reserves continues its low interest rates and buying of approximately 300 billion a month of market securities, the economy may continue to bloom for a while, the problem is what happens then.

The overall point is the form of government, democratic, socialist, dictatorship, etc. makes little difference if the monetary authorities in the society allow the money supply to grow unchecked and out of balance with the economy's ability to produce goods and services.