Inflation, as Milton Friedman said, is a monetary phenomenon. The only way you get inflation is to print out money like there’s no tomorrow. Because when you do that, there IS no tomorrow, money-printing destroys savings and with it, future investment. Which would have great implications for a nation’s stability and passage to or from democracy. Slobo of Yugoslavia, for instance, achieved his greatest repression, after he triggered the worst money-printing orgy in history, printing literally at the speed of inflation for a 313,000,000% rate. A dark curtain of tyranny descended over the country after that. You can read about it in Steve Hanke’s essays on it here and here.

Venezuela, under Hugo Chavez, has been spending money if not like Slobo, at least like Imelda Marcos. Not that he might not try to catch up with Slobo. He’s printed and printed and hasn’t invested a penny. He’s the ultimate singing summer grasshopper in the surrounding world of industrious ants. Chavez is burning money like a souped-up roadster engine burns fuel.

And as economist John Maynard Keynes once drily said: Anything that can’t go on, won’t.

That’s why a chart put out on by Miguel Octavio on The Devil’s Excrement Web site is so instructive. Hugo Chavez is printing money like crazy. He’s printing far faster than he’s taking oil money in. He thinks capital controls will preserve the value of the money but it won’t. There are too many holes through the black market. Now the central bank is running scared. Inflation and the end of savings are coming soon, based on the vivid lines on that chart, showing a freefall. Venezuela probably only has a few months left before a great big crash happens.

The fall is going to be hard. See Miguel’s proof in the chart here, the interim ripoffs by grabby rats on the sinking ship here, and the critical backgrounder here.

UPDATE: Miguel has much more, under a hilarious new headline, in this post here.