Monday, December 27, 2010

Gas Prices Rise in Bolivia by Decree, Estonia to Enter the Euro, Will China’s Grand Experiment End with Runaway Inflation?

12/27/2010 Cochabamba, Bolivia Pop in your mints

We are back here at The Mint to ponder what is and what may be as the Gregorian calendar turns another year older.  We can be certain of two things for 2011.  Both Bonds and Fiat currencies (the most prominent of them the US Dollar) will decline in value.  Whether or not the decline will be severe is open to debate but every passing day under current circumstances and accompanying monetary and fiscal policy lead them ever closer to tumbling off a cliff.

What catches our attention today is that, last night here in Bolivia, the Vice President, Álvaro García Linera, who greatly admires and in appearance closely resembles the founder of Wikileaks, Julian Assange, came on TV to announce that the price of gasoline and diesel fuel, which are completely controlled via subsidies by the government, would go up 72% and 82% respectively effective immediately.  This takes the price from roughly $2.12 per gallon to roughly $3.66 per gallon.

Assange and Linera, seperated at birth?
The reasoning for the move, as explained by the government, is to kill the trafficking of “contraband” gasoline from Bolivia to, most notably, Chile.