Market 1, Chavez 0

Yesterday came an awesome piece on news hasn't been spread enough so here it is.

It is strongly reminiscent of a recent opinion piece in the Wall Street Journal arguing for the same thing... dump the US gold reserve to burn the nutty right wing hoarders. Some nutty right wing hoarders said in the comment: Bring it on, we'll be here to buy.

Well Chavez tried to do something quite similar. Prop up his failing currency by dumping his foreign reserves on the market. And guess what? The evil speculators thanked him and sucked up the money.

Of course, those greedy speculators artificially devalue the great revolutionary bolivar by manipulating the market, but somehow a huge oil exporting nation sitting on a ridiculous amount of foreign exchange reserves is unable to manipulate anything. Manipulation works in mysterious ways ^^

Now don't get me wrong, dumping one's reserve in dollar might be a good thing, but if you're going to do that

- You do not brag about it. Trading 101. You do it stealthily like the Chinese. When the Chinese central bank say they don't want to buy more Gold, it's dumb to believe them, that's what they'd say regardless.
- You do not exchange it against your moronic socialist currency that you're simultaneously working to devalue.

All in all, this is evidence that markets work pretty damn well.

Share this

But if Chavez loses, then so

But if Chavez loses, then so do the millions of welfare recipients who depend on his handouts. You, sir, have no heart, no compassion at all. I approve!

OK, say you are right.

You do not see any economic difference between being the world reserve currency and being a 3rd world worth nothing currency? An action in either currency has the same effect on the world market?

What should the US govt do? Buy, sell, or ignore the gold market?

Where did I say anything

Where did I say anything like that? Your question doesn't really make sense to me.

My systematic answer to "What should the US govt do" is "Apologize and disband".

New national slogan? "Sorry

New national slogan?

"Sorry dudes, our bad."

It works for foreign policy too!

Two party politics

The other party indignantly calls for a radical departure from your "sorry dudes" policy:

[Facepalm] "What was I thinking?"