Hugo Chavez, the socialist Venezuela leader, agreed on Monday to buy Verizon Communications' (NYSE: VZ) 28.5% stake in the country's CANTV, the country's leading telecommunications provider.

Chavez offered $17.85 per CANTV ADR versus the $16.08 per share Monday trading price, an 11% premium. Last year, Carlos Slim, the Mexican billionaire offered $21 per share.

The CANTV offer follows the government's agreement to pay $740 million for AES's 82% stake in Electricidad de Caracas, which was also close to its current trading value.

Anyway you look at it, Venzeula is a country that simply cannot get out of trouble. If its run by capitalists, the rich keep all the money and the poor get poorer and poorer. If the country is run by an extreme reformist, like Chavez, the state runs the businesses into the ground.

If you even have an opportunity to go to Venezuela to evaluate investment opportunities, don't go. It is too tough of a place to make money, whether a capitalist or communist is running the country.

Yesterday, there were numerous press reports stating that Venezuelan president Hugo Chavez would nationalize the country's electrical and telecommunication companies, continuing to transform Venezuela into a socialist state.

However, entering his third term, Chavez's plans may already be running into trouble. According to yesterday's Wall Street Journal (subscription required), Venezuelan inflation is approaching 17% due to Chavez introducing his own version of socialism and unilateral redistribution of wealth policies. Additionally, Chavez has promised much of the windfall money from high oil prices to leaders of other countries in the region that are tempted to re-explore socialism as a way to govern.

The Journal article suggested that if oil drops below $50 per barrel, Chavez could run into trouble keeping up with all the promises he has made. In addition, oil below $50 per barrel might mean he cannot meet Venezuela's external financial obligations.

Before politicians can get in a frenzy about Mr. Chavez, the market may simply take care of him itself.