21st century Socialism

The most colourful politician in South America, Hugo Chavez of Venezuala, who famously described Venezuala, Cuba and Bolivia as "the axis of good", is in financial difficulty. His state budget had been drafted on the assumption of a $65 oil price versus today's price of $48. Earlier this month he seized $8.7bn from the central bank for a social spending fund, then he decided to cut petrol subsidies (the price of petrol was a mere $0.17 a gallon) and yesterday he ordered his telecommunications minister to nationalise the largest private telecom company CANTV. He still has more foreign reserves than foreign debt so need not default but diverting reserves into spending increases money supply and inflation, already running at 20%, so any collapse would be hyperinflationary.