All of the pieces are dropping into place - Venezuela
Hugo Chavez has either no knowledge of history or he is a political moron.
Not content with nationalizing the telephone, oil, electrical industries and effectively cutting off any future outside investment, he is now planning to go after the banks.
From
The Australian:
Chavez threatens banks with takeover
President Hugo Chavez has threatened to take control of banks that fail to meet state-imposed lending requirements designed to benefit Venezuela's farmers.
Mr Chavez, who says he is leading Venezuela towards "21st-century socialism", accused private banks of neglecting laws requiring them to set aside nearly a third of all loans for agriculture, mortgages and small businesses at favourable rates.
"The law must be applied," he said at a televised meeting with farmers on the weekend. Any bank that didn't comply "should be seized".
Mr Chavez also announced his Government had approved legislation establishing a maximum 15per cent interest rate on agriculture-related loans and extending payment deadlines from three to 20 years.
I'm all for the farmer and the small business owner, hell, I am both.
Still, setting a quota on low-interest loans allows for very poor selection of clients and a significant increase in the chance of default. Something that the banks will be loath to do.
A bit more:
Mr Chavez's comments come amid food shortages and rising inflation, which hit 22.5 per cent last year, the highest official rate in Latin America.
Circling the drain Hugo baby...
Posted by DaveH at January 20, 2008 9:01 PM