Things are going well, Maduro is in Paris eating and drinking better than in Caracas. The National Assembly will investigate how Chavez’ cancer was inoculated, but refuses to discuss how the terms of the Comptroller, some CNE Directors and some Supreme Court Justices have ended and they should be replaced (Most of the elected when the opposition had no representation in the National Assembly), while that exchange rate hits all time highs, even if its increase has been stopped by rumors the Government will do something to “open” the foreign exchange system.
But it is harder to find a dollar in Caracas that a roll of toilet paper.
People really understand little about how ideology is the main driving factor behind the now Maduro revolution. The papers are full of speculation about how the swap market will come back, the necessary laws changed and we will live happily ever after.
No such luck, as we have been predicting for weeks…
Yes, the Illicit Foreign Exchange Bill will be changed, but that’s about it. It will be changed so that the absolute ban on foreign currency trading without the Central Bank in the middle is removed and participants can buy/sell foreign currency in a market tightly controlled and regulated by the Venezuelan Government.
Yes, according to Central Bank Director Armando León, the “father” of the Bolívar fuerte, what the Government has in store for us, is simply a “new and improved” SICAD foreign exchange system, the same one that so horrendously failed in March.
According to Leon:
“The final alternative system to the official Cadivi system will be expanded and will be made to be as efficient as possible”
In fact, I can´t find a link to all that León said, but here is a summary:
-Venezuela is working to resume Sicad dollar auctions at the beginning of second half of year.
– The Government is working to allow private and public companies and banks to sell dollars on the Sicad system
addition to cash.
-The Government is focused in May and June on delivering more dollars to small and medium companies that are key to resolve shortages
-The Sicad in its debut was very complicated. A review of the system has been completed so that it includes small and
medium companies and individuals
-The Government will also make the official Cadivi exchange system more effective.
Thus, while people are looking for some sort of more pragmatic policy, what the Government is thinking about is about making more “efficient” a system that the same people planned and designed in March but failed miserably, but this time around, “trust us” it will be dynamic, pragmatic, efficient and will solve of the problems with shortages, drive the swap dollar down and make people happy.
Yeah, sure! And the Bolívar fuerte was going to stop inflation. Didn’t you suggest that Armando?
So, what we will see is a an expanded SICAD, with all sorts of rules and regulations. Remember SITME? The same people that created and designed SITME are in charge of this SICAD with Fluoride. These are the same people who blame the failure of SITME on the banks, the oligarchs and the capitalists.
Which is why the new system will also fail. First, they will make up a lot of rules. The ones for the first SICAD auction were doomed from the beginning. The ones for SITME were the ones that created the system that amde a lot of people a lor of money. They will improve on that and create many more. They love that, that is what they are experts on, control, rules, distortions and the like.
But, they have not said the most important thing: Who will sell dollars into the newfangled and improved system?
That, my friends, is the only important question. And as long as the system is rigged and controlled and the priced fixed, only the Government will. And that solves absolutely nothing.
As simple as that.