Accountability is simply a dirty word for Chavismo. There he was, Nelson Merentes, the current Minister of Finance talking on TV on what a mess the economy is, as if he had not been omnipresent in Chavez’ Cabinet and as if all of the things he was saying are not working, were not the creation of Chavez, aided by none other than Nelson Merentes, Jorge Giordani and others. Sadly, he also showed that he has no clue as to how to solve the problems anyway.
First, the clueless Mathematician says that the black market dollar “perturbs and gives anxiety” to Venezuelans. Thus, the wise man suggests that the Illicit Foreign Exchange Bill needs to be changed because it has not fulfilled its objectives. He also suggests that the Securities Markets Bill also needs to be modified.
Let’s see. The first Bill has been in existence for eight years and was passed when the National Assembly was 100% Chavista. It was modified once to make controls tighter, not softer, making it illegal to even mention what the exchange rate is and to make all foreign exchange transactions, except those made thru the Government, absoluetly illegal.
Even worse, up to 2010, there was a functioning parallel market in Venezuela, which the Government squashed because it did not like the ever increasing rate of exchange, killing Venezuela’s Capital markets in the process, jailing people and modifying a well-thought out (and widely consulted!) Capital Markets Law to satisfy the regime’s wishes at the time.
The result? That same parallel rate is now five times larger, barely three years later!
And Merentes apparently thinks that changing these laws will apparently solve the problems, the same way he thought SITME was the best foreign exchange market in the world (Will last 100 years! Nelson dixit) and silly SICAD would solve the scarcity problems)
Which shows that after eleven years practicing finance, which Merentes had never been interested in, he has yet to learn much about it. Moreover, things are what they are because of the absurd monetary and foreign exchange policies, which he helped implement at the Central Bank and are still in place today.
Because changing the laws, will not lower the black market rate. Creating a parallel market will not lower the black market rate. (I personally think it will increase it, not decrease it!) Because the problem is excess demand for foreign currency, generated in part by the artificial creation of money, while maintaining the official exchange rate constant.
It’s very simple: You start with pent up demand for foreign currency which has been building up over the years. Then, you increase restrictions on who can get the foreign currency. You follow it up, by having the Government increase its imports, which is not only inefficient, but full of “guisos”, overprices and empty containers and follow it up with keeping the official rate of exchange artificially low, while all this time the number of dollars you have to sell are constant, if not lower.
It is an equation that will never work, to put it in terms the Minister should understand.
Because the US$ 47 billion that Merentes magically mentions as what Venezuela imports, is not really that much. When the Government is directly importing US$ 34 billion, while “assigning” US$ 26 billion to the private sector using convoluted criteria at such a favorable rate, simply does not work. Even Jorge Giordani has admitted that as much as 40% of all that may be fake.
And then, the final and golden touch to his statements is when Merentes says: “We want to produce what Venezuelans consume”. Really? You could have fooled me Nelson, because you have spent fourteen years doing exactly the opposite, threatening, expropriating and making it very difficult for the private sector to grow. And just a hint, keeping a low official rate of exchange, with 20-30% inflation is exactly a recipe to kill local production, so start there.
Same with exports, where many of those same exports don’t exist today, because the plants and factories were expropriated and lie idle under Chavista management.
But Merentes speaks as if this is a new Government and he was never part of the previous one. As his predecessor in his current position, there is simply no accountability. It is as if these failed policies were implemented by extraterrestrials. In fact, It is as if he became Minister of Finance last week, not almost five months ago.
Accountability is a fifteen letter word, but for Chavismo it appears to be a four letter one.
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December 5, 2013 at 7:09 am
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September 9, 2013 at 11:38 am
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September 7, 2013 at 5:18 am
m_astera,
Thank you for your comment.
You stated:
“I have understood your indexing idea since you first posted it here. It’s simple enough and would work fine.”
By asking you the following questions I am not implying that you do not know the principles and their effect/s. I am simply confirming that you understand them in the same way I understand them and their effects.
Do you understand that it would only work fine on a NATIONAL basis when all salaries, wages, transport prices, water costs, electricity costs, issued share capital, capital reserves, retained profits/losses and especially trade debtors, trade creditors and all other non-monetary payables and receivables, etc. are indexed in terms of DAILY INDEX?
Do you understand that everything has to be done in terms of a DAILY INDEX as it was done in the past in Latin America, especially very successfully in Brazil from 1964 till 1994?
Venezuelan companies, for example Plumrose, implementing IAS 29 since 2009 are using indexation in terms of the MONTHLY published CPI and it does not make much difference to them and to Venezuela.
1. Do you agree that IAS 29 has to be changed as soon as possible to REQUIRE DAILY INDEXING and that such a change would actually stabilise the Venezuelan constant real value non-monetary item economy (all the items I mentioned above are constant real value non-monetary items) over a short period of time once Venezuela is FORCED to implement DAILY INDEXING because your companies already implement IAS 29?
The matter would be out of the Venezuelan government control. It would be a REQUIREMENT in IAS 29 and Venezuela already implements IAS 29.
You stated:
“It would be illegal for a private company to index its goods against the true value of the US dollar. How could they index against something that is illegal to even discuss or print?”
I agree that the daily US Dollar parallel rate cannot now be used since it is illegal.
IAS 29 requires the use of “the measuring unit current at the end of the reporting period.” Everybody implementing IAS 29 uses the MONTHLY published CPI for that purpose. The month-end DAILY CPI is also “the measuring unit current at the end of the reporting period” since the Daily CPI is a lagged, daily interpolation of the monthly CPI: it is based on the monthly published CPI.
Venezuela already has a monthly published Daily CPI because Venezuela values its government capital indexed bonds on a daily basis on the Venezuelan Daily CPI: these Venezuelan sovereign bonds CAN trade on a daily basis and are thus priced on a DAILY basis by the Venezuelan government department responsible for the management of government debt in terms of the Venezuelan Daily CPI.
2. Do you agree that this already available Venezuelan Daily CPI can be used as the DAILY INDEX in terms of IAS 29?
I would really appreciate your answers to the above two questions.
September 3, 2013 at 11:54 pm
It is very strange that no-one in Venezuela (including all of you on this blog) is interested in monetary correction when Latin America is famous for indexation in terms of daily index: It was used for 30 years in Brazil – from 1964 till 1994. Chile and Colombia currently use daily indices: Chile the Unidad de Fomento and Colombia the Real Value Unit. The links are available on my blog. http://realvalueaccounting.blogspot.com
Have you ever heard of monetary correction (daily indexation) ?
September 4, 2013 at 10:29 am
Nicolas, it seems you are only obsessed with promoting your business.
Yeah, and helping Venezuela, right.
September 5, 2013 at 10:47 am
I have no business.
I am an accountant. I got involved in this research by chance during my 2 1/2 year working experience in Angola´s hyperinflationary economy from 1994 to 1997. I stopped our fear of hyperinflation after working there for 15 months with accounting dollarization: running your business in US Dollars and doing your accounting in US Dollars in terms of the daily US Dollar parallel rate. Then I spent the next 18 years researching the fundamental principles involved.
Kepler, don´t feel bad about not understanding anything about capital maintenance in units of constant purchasing power in terms of a daily index as implemented very successfully in Latin America for 30 years from 1964 till 1994: the International Accounting Standard Board also does not understand it. I am in the process of explaining it to them.
Brazil, Chile, Colombia and other LA countries have tons of knowledge and experience of the above subject from actual experience. I am sure that knowledge – which I have drawn on extensively in my 18 year research of the subject – will be well used in the near future regarding the subject.
Latin America is the leading player in the current IASB research regarding the above subject. A proposal for amendments to IAS 29 Financial Reporting in Hyperinflationary Economies (which your companies have been implementing since 2009) was submitted to the IASB in 2010 by the Argentinian accounting standard-setter, the Federación Argentina de Consejos Profesionales de Ciencias Económicas in collaboration with the accounting authorities of Chile, Brazil and Mexico. The Venezuelan accounting authority was invited to comment, but did not participate.
I know too much about the subject to simply walk away from it. I encounter a great lack of knowledge about the subject at the IASB and from people like you. I understand that you do not have any knowledge about it. I am, however very frustrated about the lack of knowledge of CMUCPP at the IASB as well as their resistance to change – which is, in fact, very normal under the circumstances.
September 5, 2013 at 10:59 am
Kepler, you are 100% correct as far as one thing is concerned: I have a purely selfish interest in what is happening in Venezuela. I am only interested while you are in hyperinflation. If you were a low inflation country I would most probably never visit this blog. I used to spend hours every single day – especially in 2007 and 2008 – on a Zimbabwe forum when they were in hyperinflation. Since they have dollarized spontaneously, I have never visited that forum again.
September 5, 2013 at 11:01 am
I learnt a great amount about the subject on that Zimbabwean forum during their hyperinflation.
September 5, 2013 at 11:10 am
Yes, I wish to help Venezuela because of my specific knowledge about CMUCPP in terms of a daily index and my actual experience of working as an accountant in a hyperinflationary economy and because I stopped our fear of hyperinflation in the company where I worked with accounting dollarization in 1996.
I am trying to help Venezuela via the IASB. I realise I have little hope of success to do it via the IASB. But, I will keep on trying.
September 5, 2013 at 11:03 pm
Nicolaas-
I have understood your indexing idea since you first posted it here. It’s simple enough and would work fine. Except that the robolutionaries don’t want to fix things, they want to continue working the system they have invented to steal money.
It would be illegal for a private company to index its goods against the true value of the US dollar. How could they index against something that is illegal to even discuss or print?
So, although I understand your interest in Venezuela’s hyperinflationary economy, you are barking up the wrong tree. The government does not wish to fix a *problem* that is making the insiders very rich.
September 6, 2013 at 12:10 am
m_astera,
I am not proposing accounting dollarization as I invented and used it in Angola in 1996. I am also not proposing using the US Dollar´s daily rate as the Daily Index in Venezuela because I know that is illegal.
I am trying to get the IASB to understand capital maintenance in units of constant purchasing power in terms of a DAILY INDEX. Using a DAILY INDEX is what makes indexing or monetary correction or price level restatement – which are all forms of capital maintenance in units of constant purchasing power – work. The IASB does not understand that.
Latin American countries used it, but also did not understand the fundamentals involved. They did the right thing instinctively, like street vendors update their prices daily in terms of the US Dollar daily parallel rate during hyperinflation in all hyperinflationary economies.
If I could get the IASB to REQUIRE daily indexing in terms of the Daily CPI in IAS 29 it would be magic for Venezuela. It would stabilise your constant real value non-monetary economy in a very short period of time. It appears revolutionary because it would REQUIRE salaries, wages, rents, transport fees, all administered prices to be updated DAILY in terms of the Daily CPI. That is what Brazil and other LA countries did from 1964 till 1994.
This would not come from the Venezuelan government. It would come as a REQUIREMENT from the IASB via the implementation of IAS 29 which companies in Venezuela have been implementing since 2009.
The IASB is as obstinate as the Venezuelan government regarding capital maintenance in units of constant purchasing power. Currently the IASB staff is attempting to ban its use during low and high inflation. Unbelievable, but true.
September 5, 2013 at 11:20 am
Kepler, I suppose you think I sell many copies of my book. I have sold three copies since I published it a year ago. I have stopped looking to see whether there are any sales. So then, that is my business: 3 books sold.
September 2, 2013 at 6:07 pm
Are bolivars cheaper than toilet paper yet?
September 2, 2013 at 10:37 pm
johnbarnardblog,
Most Venezuelans would prefer a bolivar shortage over a toilet paper shortage.
September 3, 2013 at 7:22 am
The 2’s an 5’s are, but they stain your butt blue and orange.
September 3, 2013 at 12:16 pm
Also they will clog your pipes, they won’t dissolve properly.
September 3, 2013 at 1:40 pm
Yeah, that’s a problem especially if you are on a septic system.
September 4, 2013 at 5:12 am
Have you actually checked that Chavistas have been using the same PAPER?
All things are possible in HugoLand, whether Hugo is alive or dead.
September 2, 2013 at 2:01 pm
Miguel, there is no way these guys will get someone there who really understands a bit of economics, whether an economist or misia Pepa, la propietaria de la arepera de al frente.
Supply and demand are simply concepts these guys refuse to accept. If you read Marx a bit you will see why. The guys are crazy and they won’t accept it, period. They think the State can control things. And now they are onto something like: “now, with computers, we can do that”. They are imbeciles.
September 2, 2013 at 2:05 pm
I know, my understanding is that they plan to create a parallel market where they control the price again. Thus, there will be two parallel markets.
I am also being told that Giordani is blocking what Merentes wants to do and this public statement is to try to squeeze him out.
September 2, 2013 at 1:49 pm
Chavista Deputy Elvis Amoroso: Anyone that speaks about the parallel market attempts agaisnt the stability of democracy. (Quien hable de paralelo atenta contra la estabilidad democrática.)
Jeez, is Merentes in trouble or is Amoroso a Moron?
September 2, 2013 at 1:47 pm
“Under this volatile regime, it’ll certainly be a risky and short term business to become involved in.¨
Which the Government could declare illegal at any time.
September 2, 2013 at 10:09 am
For 2010, registerred brokerage institutions were either negotiating permuta dollars – the inevitable consequence of the controls- or playing a passive role in the securities market: that is, waiting for the next very-lucrative government bond placement. Trades in the Caracas Stock exchange -if any- were already inexistent after Cantv, EDC and others were nationalized. Other private deals in which institutions could participate were extremely rare.
In the end, the sad truth is that brokerage houses had turned into a sort of government branch, exclusively dedicated to executing the state’s economic policy. A simple amendment excluding them from dealing government bonds was enough to wipe out the whole system.
It’s not like Conditions will change under this new regime. Now there’s even fewer trades in the BVC and fewer enterprises than in 2010 that could help in diversifying business. Few corresponding banks – if Any- will be willing to open accounts to institutions transmitting money. Not to say anything about the regulator, which is the utmost exemplary afiliate of the very corrupt and crime-sponsoring government that rules the nation.
Under this volatile regime, it’ll certainly be a risky and short term business to become involved in.
September 2, 2013 at 8:51 am
Sure he’s responsible.
But the bigger story is the one the BBC runs with: the financial architect of Bolivarian socialism admits that his policies, and those of Chavez, haven’t worked.
What possible rebuttal can they have to that?
September 2, 2013 at 9:11 am
They could look for an economist, for example, someone that understands supply and demand and basic macroeconomics, even if Chavista. Merentes and Giordani are and have been clueless, improvising because they had a pipeline of dollars.
September 2, 2013 at 1:00 am
The article in El Universal is lamentably brief and inconclusive, the BBC m.bbc.co.uk/news/world-latin-america-23924372 reads much more into what was said, or are they referring to another interview?
“This is a government that has won 18 elections, that has had social achievements,” Mr Merentes told Televen television.
“But it still has to be successful on the economy.”
Makes sense to me…
Without wishing to comment in any way on Merentes’ previous involvement in the ruinous and futile economic decisions to date, I would like to think you’re not going to shoot the message because you don’t like the messenger?
September 2, 2013 at 1:43 am
When the messnger is the general that lost the battle, he or she might very well deserve to be shot.
September 2, 2013 at 1:47 am
… and not only that, the general/messenger has announced he intends to change nothing about the way he fights battles. As Chavez would say: “In Bolivars time you would have been shot.”
September 2, 2013 at 3:59 am
As our Nordic friend says: Merente is fully responsible. He has been not just a messenger but responsible, together with Giordani, for a lot of the mess we have today. Of course: it is all shared across all those Boligarchs.
September 2, 2013 at 9:09 am
No, I dont like the message either, he plans to change laws, hoping something will happen, the same way everything has been done in the past. In the end he has no clue.
September 1, 2013 at 11:41 pm
When the credibility on economic authorities has been lost and with the actual mafia in political power there is no solution other than a simultaneous change of all of the authorities: economic and political… All of them have to leave an a complete group of well trained people take those positions…This may look like a dream but I believe it is the only way to save the country.
September 2, 2013 at 6:49 am
Kind of like flushing the toilet and relacing with fresh water.
September 1, 2013 at 9:46 pm
when is the bloody oil price gonna drop??
September 2, 2013 at 9:08 am
When they devalue sharply, otherwise forget it. The implicit dolar, what you get when you divide the number of Bolivars by international reserves stands at Bs. 39 pero dolar today, thus the black rate is not out of line.
September 2, 2013 at 10:32 pm
yeh, but surely there are external factors that drive price. The questions stands… when the hell is oil price going to drop. We need it to.
September 1, 2013 at 9:31 pm
20-20 Hind Sight is now decreed to be
the New Policy of 20-20 Foresight.
We successfully accounted for the past 14 years, and
great rhetoric made great strides in this country, and by Bolivar!
We shall be accountable for the next 14 years!
Hot air still belongs to us!
With our kind of Socialism, who needs Economics?
September 2, 2013 at 9:48 am
A Wet Dream
Bang Bang who’s there? It’s MEE, Bee_ESS*
GO AWAY!
DING DONG who’s there? It’s MEE, Bi_EssFairy
So?
Help me! YOU_ess_Devil don’t love me no more …..
I’m too fat, I’m six times bigger, what should I do?
Oh well,
go tell the pee-pees to stop peeing
and you’ll be back to normal in no time.
I can’t! I can’t! The pissers are out in force!
Don’t worry, Bee_Ess_Fairy, the ‘lectric’s on self destruct …
before you know it, the pee-pees will stop peeing Fairies,
and you will get to starve yourself into a shadow of what you are now.
*Bs aka Bee_ESS, Bi_EssFairy aka BsF,
pee-pee aka printing press, pee aka printing.
[& the handsome YOU_ess_Devil hunk
that she pines for is aka usd]
BTW
it’s Bi-essFairy, because she likes it every which way.
Just try counting the number of eff-exxx rates she sells herself for.
Cheers
September 3, 2013 at 11:12 am
Suggestions made by chiguire bipolar …
preparamos una lista de sugerencias que reactivarían la economía de Venezuela.
– Mudarnos de país todos: Si el gobierno utiliza algunos petrodólares para regalar pasajes de avión a todos los ciudadanos, el país quedará vacío y, por lo tanto, los problemas económicos llegarían a su fin. El desempleo de los venezolanos o la poca preparación del capital humano pasarían a ser responsabilidad de otros Estados, no de Venezuela.
– Cobrar impuesto sobre las matracas policiales: Los policías tendrán que pagar un impuesto por cada persona a la que matraqueen, eso permitirá al Estado subsidiar alimentos básicos para los más necesitados.
– Colocar patrocinantes en los símbolos patrios: Sifrinitas, Empresas Polar, Tío Rico… cualquier marca podrá publicitar su marca en los libros de historia de bachillerato, sedes de organismos públicos y en las astas de los edificios residenciales en días feriados. Quizás hasta se puedan inventar nuevos símbolos patrios, como el carro oficial de Venezuela, para conseguir más financiamiento.
– Crear más conflictos en el medio oriente para que el petróleo suba de precio: Apostarle a los conflictos de esos países que nos hacen la competencia en el mercado del crudo siempre es beneficioso, además en las guerras los países poderosos necesitan más gasolina para matar civiles y niños, haciendo que la demanda incremente.
– Que Chino y Nacho nos presten algo de dinero: Todos hemos visto esos videos musicales y sabemos que les sobra platica, así que en vez de endeudarnos con otros países o fondos monetarios, podríamos pedirles que nos den alguito mientras tanto.
– Reemplazar el pollo con venta de carne de palomas: Para evitar importar pollo, el Estado podría iniciar la industria palomera con las palomas gordas de las plazas Bolívar de todo el país. El sabor sería un poco distinto a lo acostumbrado, pero en una empanada frita nadie notaría la diferencia.
– Vender la virginidad de las jóvenes que aún la tengan por Internet: No es explotación sexual si lo hace el Estado… o capaz sí. Pero todos hemos leído las noticias sobre las subastas de virginidad y están claros que podrían ayudarnos a pagar la deuda externa.
– Armar una industria de panderetas a base de chapitas de cerveza: Ya que el hobby del venezolano es la cerveza, se podría crear una industria de panderetas utilizando las chapas residuales de las bebidas clavándolas en palitos.
– Vender unas torticas caseras: Si la cosa está apretada, hay que rebuscarse. Viandas con tortas caseras serían enviadas a los encuentros internacionales en los que participe Venezuela para que los diplomáticos aprovechen la ocasión de hacer dinero extra para el país.
– Legalizar la compra y venta de divisas libremente, garantizar seguridad jurídica para inversionistas, bajar los impuestos y eliminar controles de precios que distorsionan el mercado: Pero mejor no, porque eso suena como que es complicado y nos va a sacar del hoyo de perdición en el que estamos.
Like!
September 3, 2013 at 7:14 pm
Re: Apagon…
“A esta hora todo parece indicar que la extrema derecha ha retomado su plan de Golpe Eléctrico contra el país. Alerta y Activos los Venceremos (…). En el momento que hemos estabilizado el servicio eléctrico y vamos inaugurando nuevas obras, dan este golpe para volver a desestabilizar”, afirmó Maduro en su cuenta de Twitter.
Forces of Nature, Rains & Acts of God have joined
la extrema derecha para propinar additional calamities
to the suffering population. why? why? why?
ni siquiera se pueden dar “el capricho” de lamentarse o
darse golpes inútiles de pecho.
La extrema izquierda habla de pareceres,
indicaciones, golpes, desestabilizaciones….
hasta la saciedad.
Cry! my beloved Land
September 1, 2013 at 8:56 pm
I think that all events are extremely simple to explain. All required expertise is tuned towards improving individual cash flows and benefits. Some additional skills are required for camouflage/pretending and some political skills are required for staying alive. Absolute no expertise is required to run, manage and govern a country, its economical strength, production, export, health, construction, infrastructure, security you name it.
As long the Oil dollars keep coming there is/will be absolute no need to change.
If one tries to analyze events, I can not see any logic whats or ever that follows any text book about anything that I have had in my hand while in university, teaching, on the job or now retired.
Where am I wrong?
September 1, 2013 at 6:01 pm
“Because the problem is excess demand for foreign currency, generated in part by the artificial creation of money, while maintaining the official exchange rate constant.” Miguel Octavio
The problem with the parallel rate – not the economy as a whole – is twofold:
1. The one issue is International Accounting Standard IAS 29 Financial Reporting in Hyperinflationary Economies which is being implemented in Venezuela in terms of the month-end CPI since 2009.
Just like the US Dollar parallel rate changes DAILY (and can change more than once a day in the future at much higher rates of hyperinflation) so the CPI also changes DAILY. Venezuela has a Daily CPI. It is the DAILY INDEX used by the Venezuelan government to price Venezuela’s government capital inflation-indexed bonds issued in Bolivars DAILY. They can trade on a daily basis. This Venezuelan Daily CPI is available in Venezuela.
Implementing IAS 29 in terms of the month-end CPI destroys a part of current year results because the 355 non-month-end Daily CPI´s are being ignored. Only the 12 month-end CPI´s are being used under IAS 29. (I can supply an example if anyone is interested.)
What actually happens is that Venezuelan companies use Historical Cost Accounting for the 355 non-month-end transactions. Imagine using Historical Cost Accounting during hyperinflation! Very unfortunately the International Accounting Standards Board very mistakenly REQUIRES the use of HCA during hyperinflation. Under HCA it is ASSUMED that the Bolivar is PERFECTLY stable during those 355 non-month-end days. Imagine assuming the Bolivar is PERFECTLY stable during hyperinflation! Every company in Venezuela is doing that as far as transactions on the 355 non-month-end days are concerned!
When IAS 29 is implemented in terms of the Daily CPI, then the Venezuelan constant real value non-monetary item economy would stabilise over a very short period of time. For example, salaries, wages, rents, transport prices, all items in the income statement, capital, reserves, all items in shareholders equity, provisions, etc. would be measured in units of constant purchasing power in terms of the Daily CPI.
Variable real value non-monetary items, e.g., property, plant, equipment, inventory, stock, finished goods, consumer products, listed and unlisted shares, etc. would be measured in terms of International Financial Reporting Standards (at, e.g., fair value – market price) and then historical values would be updated DAILY in terms of the Daily CPI till they are again measured in terms of IFRS (e.g. market price).
This would stabilise the constant item economy over a very short period of time.
2. Secondly the Venezuelan Central Bank should issue a decree that ALL monetary items should be inflation-adjusted on a daily basis in terms of the Daily CPI. Chile is doing this with 25% of its broad M3 money supply for years already.
There would be still be hyperinflation in Venezuela if the Central Bank keeps printing too many Bolivars. But, there would be no cost of or gain from hyperinflation when ALL monetary items are inflation-indexed daily in terms of the Daily CPI.
It would be a real revolution if Venezuela were to do this.
The above revolution in the constant real value non-monetary item economy (1) can be brought about by the IASB by a simple change in IAS 29 from using the month-end CPI to using the Daily CPI as was done in Brazil and other Latin American countries with daily indexation or daily monetary correction or daily price-level restatement from 1964 till 1994. Unfortunately the IASB is as obstinate as the Venezuelan government regarding real change.
The IASB unfortunately does not even understand capital maintenance in units of constant purchasing power in terms of a daily index although it was widely used in Latin America in the recent past. The IASB refuses point blank to acknowledge that IAS 29 in terms of the month-end CPI had absolutely no positive effect during 8 years of full implementation in Zimbabwe’s economy even though all accountants in the world – except at the IASB – have the common sense to see that it had no effect at all. The IASB only very recently very vaguely acknowledged that Capital Maintenance in Units of Constant Purchasing Power is being implemented in IAS 29 after I pointed it out to them. IAS 29 was authorized 24 years ago in 1989. The IASB does not yet understand the automatic constant purchasing power capital maintenance effect of using the Daily CPI instead of the monthly published CPI in IAS 29. They are slow learners. They are intoxicated with HCA and the stable measuring unit assumption.
The daily indexation of ALL monetary items (100%) is another revolutionary step not yet taken by any country although Chile has been doing it to 25% of its money supply for years as confirmed to me by the Central Bank of Chile.
September 1, 2013 at 5:48 pm
The thing with all these laws is that they won’t or can’t enforce any of them.
If they tried it would drive the country into an even bigger hole.
Many of the people using the black market are doing so to keep the shelves full of products that the country needs.
September 1, 2013 at 5:41 pm
Well, I really blew it, didn’t I?
September 1, 2013 at 5:57 pm
Errare humanum est et Miguel quoque.
September 2, 2013 at 2:42 am
At least you accept your mistakes, something this chavernment could do too if it had any sense…
It really seems they have no other option at this point but to launch another ‘paquetazo’ to bring things closer to equilibrium….
September 1, 2013 at 4:33 pm
Accountability is a fourteen letter word 🙂 🙂