The case of economic recession in a South American country is quite thought-provoking. The former leader attracted a large number of supporters through radical populist policies—nationalizing foreign oil companies and converting oil revenues into social welfare, which temporarily gained public favor. The problem was that the country lacked both capital accumulation and advanced oil and gas extraction technology. Relying on outdated equipment left over from foreign investment, as the equipment aged and deteriorated, oil production plummeted from its peak to just a fraction, and coupled with rent-seeking corruption within the system, the originally promised welfare system for the people suddenly became unsustainable.

The government did not choose structural reforms but instead embarked on an irreversible path—printing money. A large influx of excess currency flooded the economy, resulting in a classic vicious inflation spiral: soaring commodity prices, erosion of savings, collapsing purchasing power among the populace, and rapid evaporation of social wealth. This cycle has repeatedly played out in history and is also a core reason why many cryptocurrency enthusiasts are concerned about the risks of fiat currency systems.

From this case, it is clear that relying solely on resource exports without industrial upgrading, combined with irresponsible monetary policies, will ultimately destroy the entire economic system.