Another triumph of government economics.
First milk, butter, coffee and cornmeal ran short. Now Venezuela is running out of the most basic of necessities – toilet paper.
Explanation: Venezuela has been printing money like mad, resulting in massive price inflation (reported at 29.4% most recently). The government panics and institutes price controls, forcing prices below market levels. Consumer demand soars as people grab what they can while supply dries up. Astonishingly, the AP (as published in The Telegraph) manages to zero in on this explanation:
“State-controlled prices – prices that are set below market-clearing price – always result in shortages. The shortage problem will only get worse, as it did over the years in the Soviet Union,” said Steve Hanke, professor of economics at Johns Hopkins University.