sâmbătă, 25 ianuarie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Venezuela Enacts "Law of Fair Prices" Banning Profits Over 30%, with 10-Year Imprisonment for Hoarding

Posted: 25 Jan 2014 07:49 PM PST

No matter how ridiculous things are, they can always get worse, especially when dealing with leftist dictators and hyperinflation setups.

Via translation from El Economista, please consider Venezuela Issues Law of Fair Prices, Prohibiting Profits Over 30%.
The Fair Prices Act, an instrument with which the Government of Nicolas Maduro intends to control prices and eliminate shortages, includes a ban on profit margins over 30%, with penalties of up to 10 years imprisonment for hoarders.

The law passed in November, and the Supreme Court ratified the law yesterday.

The law, published in Official Gazette, states that the profit margin will be established annually "addressing scientific criteria" by the National Superintendency for the Protection of Socio-Economic Rights (SUNDDE).

The law provides for the application of preventive measures and sanctions such as confiscation, temporary occupation of premises or property, the temporary closure of an establishment or suspension of licenses and the "immediate adjustment" price.

In the section of the law regarding hoarding, those who "restrict supply, circulation or distribution of regulated goods or cause distortions in prices, shall be punished with imprisonment judicially 8 to 10 years."

The law also provides for fines ranging from 107,000 bolivars ($17,000) to 5.3 million bolivars ($850,000).

SUNDDE will "fix maximum prices for the production or importation, distribution and consumption according to their importance and strategic nature for the benefit of the population as well as the technical criteria for assessing the levels of exchange equitable and fair of goods and services."
Under this preposterous measure, no companies will be able to import and sell goods at anything but a loss. Expect all goods and services to vanish soon.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Free Shipping Anecdotes from Canada

Posted: 25 Jan 2014 10:31 AM PST

Reader Ian, who lives in Ottawa, Canada is wondering "How do they do it?" Ian writes ...
Hello Mish

Recently I went to WalMart online to price cat litter. An 18 kg box - about 39.7 lb - was $8.98. This is the same as my local WalMart in-store price. But online came with free shipping.

I spoke to the guy who delivered the 2 boxes I ordered. He is an owner-operator of a shipping company that contracts for WalMart delivery. Since he owns his own truck, he has to pay gas, insurance, depreciation, licensing, maintenance, etc.

Questions abound.

How much does WalMart pay this guy for delivering an $18 order? How does this delivery provider survive? Is the cost of operating a store be so high that WalMart has enough margin to ship from a warehouse while offering free shipping?

I'm in Ottawa, Canada. I'm not even aware of a warehouse in our city. If there is no warehouse, the litter had to be shipped from a store, with no savings on store overhead.

Even if there is a warehouse, the increased distribution distance means the shipper must be paid more or go out of business.

WalMart seems to be somewhere between a traditional bricks and mortar model and an Amazon model. I don't understand how this works, but I'll use it while it exists, saving time and money.

Ian
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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