Chavez Ambitions in Venezuela

Black Gold or better called Crude oil ... the prices behave much as any other commodity with wide price swings in times of shortage or oversupply. Oil prices fell to 17-month lows at $63 a barrel Monday as investors weighed Friday's OPEC output cut against growing evidence of a severe global economic slowdown that would undermine crude demand. The demand for oil is expected to keep falling in the coming months as growth slows.
Europe and other nations that have relations with Venezuela should be aware that the same tumbling oil prices that led OPEC to slash output last week threatens to send Venezuela's economy into a tailspin, and put an end President Hugo Chavez ambitions to expand his socialist revolution at home and abroad.
To cope with plummeting oil revenue, the source of half the government's spending, Chavez will cut domestic handouts and foreign aid. The first items likely to go will be arms purchases from Russia, oil subsidies for Cuba, and job- creating local projects such as bridges and subways...
Venezuela is a country with an oil boom, that doesn't know how to save, doesn't know how to set up productive industries that generate jobs, and goes into debt, then oil prices fall and the party ends !!!
Venezuela may be poised to repeat the economic collapse it suffered in the 1980s at the end of its last oil boom. Former President Carlos Andres Perez, employing policies similar to Chavez's, lavished petrodollars on public works projects, foreign aid and nationalizations in the late 1970s, setting the stage for a 1983 currency devaluation and spending cuts that sent millions of Venezuelans into poverty.
Venezuela is now more dependent than ever on oil, Venezuela is the most vulnerable country in all of Latin America to a falling oil price.
Chavez is already spending beyond his means, posting a $7 billion budget deficit in the first half of 2008, a period of unprecedented oil prices, on a $63.9 billion budget for the year.
Economists' estimates of the minimum oil price Chavez needs to sustain his economic policies range from $120 a barrel to $65. Oil settled Oct. 24 at a 16-month low of $64.15 a barrel in New York. Below $80 a barrel, it's likely that Chavez will devalue the bolivar for the first time since 2005, sparking a surge of inflation and a drop in real wages because of Venezuela's reliance on imports...