EXCERPTS:
"CARACAS (Reuters) – Venezuela will nationalize a fleet of oil rigs belonging to U.S. company Helmerich and Payne, the latest takeover in a push to socialism as President Hugo Chavez struggles with lower oil output and a recession.
A former soldier inspired by Cuba's Fidel Castro, Chavez has made energy nationalization the linchpin in his 'revolution'. He has also taken over assets in telecommunications, power, steel and banking.
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Chavez, who faces legislative elections in September, often pushes ahead with radical plans during election campaigns.
The 55-year-old leader is having a hard time in his 11th year in power. Venezuela's economy is the worst performing in Latin America this year, a problem exacerbated by a drop in oil output since 2008, power outages and soaring inflation.
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Chavez has kept pressure up on the private sector in recent months, blaming a "parasitic bourgeoisie" for Venezuela's recession and 30 percent annualized inflation,
He has threatened to nationalize Polar, the top brewer and food processor in the country of 30 million. The government has also seized a bank belonging to an owner of the leading opposition TV station and put an arrest warrant out for his partner, who is now on the run.
QUESTIONS:
1. If you had money you wanted to invest somewhere, would you consider investing in Venezuela?
2. If you already owned a company that operated in Venezuela, and you saw what was happening to this oil company, what would you want to do now?
3. Given your answers to the first two questions, what would the consequences in Venezuela be for investment, the country's capital stock, its production possibilities frontier, and the standard of living for an average citizen?
4. What would be the consequences for the value of a share of stock in Venezuelan companies and for the foreign exchange value of the country's currency?
