Thursday, October 16, 2014

World Economy - Venezuela

I am not the only one who is looking at oil prices and thinking that some countries are going to have problems. There is an article on oilprice.com that talks about how Venezuela is in a world of hurt as a result of the price of oil dropping. It turns out that Venezuela needs oil to be at about $120 a barrel to break even on all the spending the government does. With oil being down near $80 things are going to get even uglier in Venezuela. So we can expect some kind of government action and possibly more rioting and protesting. Since much of the population is dependant on the government, things will not be pretty as the money runs out, since Venezuela will not be able to borrow very much. With inflation running over 60% and crime being rampant in the streets of the capital, expect things to get out of control quite soon. How will this effect the countries around Venezuela and those who are friendly with them (like Argentina and Cuba)? Things are going to get uglier and it will happen quickly if oil price do not start to rise.

For more please see:
http://oilprice.com/Energy/Oil-Prices/Falling-Oil-Prices-Could-Push-Venezuela-Over-The-Edge.html