For some time now, the United States has been using Venezuela’s vulnerabilities to engage in a low-grade economic war. Instead of military action, the U.S. has imposed selected economic sanctions against certain Venezuelans. These have amounted to slaps on the wrist, with threats of worse to come. But, as January 28, 2019, the U.S. has declared a full-scale economic assault.

President Mnangagwa’s pledge that Zimbabwe is “open for business” rings hollow. Indeed, many businesses in Zimbabwe are shuttered. An increase in government controlled fuel prices over the weekend has ignited simmering fury over what is in fact a currency crisis. In response, Zimbabwe’s security forces have launched a violent crackdown on protestors and opposition politicians. The crackdown has been done under the cover of a social media blackout. Yes, the internet is shuttered, too.

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

 

Venezuela's economy has collapsed. This is the result of years of socialism, incompetence, and corruption, among other things. An important element that mirrors the economy's collapse is Venezuela's currency, the bolivar. It is not trustworthy. Venezuela's exchange rate regime provides no discipline. It only produces instability, poverty, and the world’s highest inflation rate for 2018.  Indeed, Venezuela’s annual inflation rate at the end of 2018 was 80,000%.

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

 

China is slowing down. Forget all the reported statistics and those that have recently been discontinued—like Guangdong’s monthly purchasing managers’ index—money and credit tell the tale. Indeed, there is a strong link between the broad money growth in China and nominal GDP growth. For example, during the 2003-2017 period, the money supply (M2) grew at an average annual rate of 14.92% and nominal GDP grew at a 14.67% annual rate.

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

 

Today, the Fed defied President Trump’s irreverent Tweets. Indeed, the Fed did what it signaled it was going to do long before Trump pushed the “Tweet” button. Yes, the Fed—with all 10 members of the Federal Open Market Committee (FOMC) voting “yes”—increased the federal funds interest rate by 25 basis points to the 2.25-2.50% range. And, as night follows day, the U.S. equity markets, currency markets, and precious metals markets took a hit.