Squandered Oportunities
Venezuela has benefitted from the high price of oil for several years now. None of that wealth has really gone to help the citizens or improve the countries ongoing economic situation. Money has been used to finance growth in Argentina. Nestor Kirchner has used that money to pay off the renegotiated external debt. This has caused a tremendous inflow of foreign direct investment. Other countries in South America are also experiencing tremendous inflows of money and growth in their economies.
Venezuela is not getting foreign direct investment; because business people are afraid of Hugo Chavez and because it is very difficult to repatriate funds from that country. The business people of Venezuela are unable to get hard currency to invest abroad. The entire economy is expected to stagnate during the coming year. Latin Trade Magazine http://www.latintrade.com/ predicts dire consequences for the Bolivar’s exchange rate and severe inflation. For Venezuelans local real estate should be the only safe haven for capital that cannot be moved outside the country. Real estate is cheap now; because people are leaving the country. The prices should reflect the inflation in other sectors.
An old investment adage says, “The time to buy is when the blood is in the streets”. There may not be blood in the streets; but it is hard to distinguish all the red ink from blood.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
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