US newspaper The New York Times Friday published an editorial, "New Coin of the Realm," criticizing President Hugo Chávez' monetary policy and charging him with "cronyism, corruption and incompetence."

The editorial came in response to Chávez' announced monetary conversion chopping three zeros from the Venezuelan bolivar as of January 1st, 2008, in an attempt at recovering purchasing power, AFP reported.

"Mr. Chávez appears to be counting on a psychological boost from a currency with three fewer zeros," said The New York Times. "But by drawing attention to the bolívar's recent weakness and -even worse-to the government's capricious response, the maneuvers could further undermine confidence, rather than raise it."

"Demagoguery and showmanship will do nothing to solve Venezuela's 20 percent inflation rate -now the highest in Latin America."

The newspaper cited skyrocketing government expenses -which soared 48 percent in 2006- and price controls as two of the causes behind inflation and currency weakness.

"Venezuela still has billions of dollars in foreign currency reserves. And Mr. Chávez has used some of the oil wealth to push social programs -including literacy and health clinics- to improve the lives of Venezuela's poor."

The newspaper added, however, "We fear that any good is quickly being undone by the old strongman formula of cronyism, corruption and incompetence."