Oil at Center of Financial Crisis


Just about everyone on Linked In knows that the state Venezuela is in is shockingly scary, as they are on the verge of entire collapse, but few people really understand why. One of the biggest reasons that Venezuela is going through more than rough economic times, aside form the major food crisis, medical crisis and drought, is the drop in oil production and the lowering of prices of oil around the World. Venezuela was a country that was plagued by Malaria in the early 1900’s and according to Dr. Jose Manuel they were a region of the World that was in a huge amount of poverty. The drilling and production of oil over the last century and current century have cut the poverty and disease and even lead to the country being able to live high luxury lifestyles, with citizens having the ability to generate quite a bit of wealth for themselves and their families. The dropping in oil prices around the World has hit Venezuela particularly hard, as every aspect of their countries wealth is basically tied into the oil market. The dropping of prices has caused them huge financial difficulty and the end result has been the eye popping hyperinflation that is going on with the Venezuela’s currency. However, this last month may be the nail in the coffin, as they have reported their lowest production of oil, so it does not look like things are going to be getting any better any time soon.