Nate Silver, who became famous for his use of polling data to accurately project U.S. elections, launched a new blog – FiveThirtyEight.com last month. It’s been off to a rough start, Paul Krugman wrote soon after its launch, “[S]loppy and casual opining with a bit of data used, as the old saying goes, the way a drunkard uses a lamppost — for support, not illumination.” I leave it to the reader to decide whether the FiveThirtyEight article on March 17 by Dorothy Kronick on Venezuela fits this description.
While most of the news from Venezuela has been focused on protests, something that is probably more important for the future of the country has taken place. The black market value of the dollar has plummeted by one-third in the past three weeks.
Venezuela's central bank has reported a slowdown in inflation, while vice-president of the economy Rafael Ramirez has claimed the country's latest currency exchange system has already decreased the value of the dollar on the black market – before it's even operational.
A third currency exchange system has been introduced in Venezuela in efforts to stabilise the value of the bolivar, called Sicad II, which will facilitate daily currency auctions at prices determined by “supply and demand”, according to Vice President for the Economic Area Rafael Ramirez.