A Rant For Democracy In Venezuela

June 25, 2015

Give or take a vowel or a consonant, this rant (post) preceded the existence of this blog, which was created in 2002. In fact, in 1998, writing for a private publication, I noted that in the 1998 election, not a single one of the candidates had been selected by a primary election: They had all self-appointed themselves. In fact, even Hugo Chávez did that, and he could have had a primary and won it without a single vote against him. In that same note, I also pointed out that in the previous election in 1994, only one candidate had been elected in a primary (He lost!), despite the country having undergone a fairly undemocratic impeachment of a President, because some politicians wanted to get rid of the democratically elected President of Venezuela.

And 20 years later, things are not too different. Yes, we ask for democracy, but it seems that the opposition leadership has a particular conception of democracy, including “dedocracy”, choosing the candidates you want using your finger in a smoked filled room, if things get uncomfortable. “Dedocracy” works quite well when you have to satisfy the egos of leaders from the Paleolitic age, even if there is no literature that can explain to us exactly how they became leaders at the time.

And that is exactly what the “MUD” did yesterday (We all knew it was coming!) when they announced the 60% of the candidates chosen by the magic “consensus” formula. Here is one guy from MUD looking at it on the Board to figure out who was the candidate for District 3 in Caracas. Anyone that knows any math can tell what it says:


Since it is so incomprehensible, it has to mean Henry Ramos Allup is the candidate for the El Recreo District of Caracas, because it is obscenely incomprehensible that this man can be the consensus candidate there.

And yes, I know all of the arguments about the difficulties of holding primaries everywhere: It is complex, expensive, bla, bla, bla, but in the end, if the alternative is to have such a candidate in District 3 of Caracas, then the system is not only undemocratic, but it stinks.

It would have been better to ask anyone who wants to be a candidate to provide the volunteers to manage the voting polls on primary day. At least, the ability of a candidate to mobilize people would have told us about his popularity and ability to win an election.

Because Mr. Allup was always a candidate for Carabobo, until the 2000 election where he was hand picked for Caracas, maybe because he is not as well liked anymore in his home State, but vaguely rang a bell in Caracas.

And this shows how screwed up the system is. In Distric 3, Jose Guerra, who at least has been more politically active against the Government than Mr. Ramos Allup under Chávez and Maduro, had to go out and win the Primary, while Ramos Allup watched from the seats of the MUD stadium, doing nothing.

Let the candidacy come to him!

And that is the problem, we complain about the neo-Dictatorship that Venezuela has become, but the opposition does not offer a truly democratic platform. I am not inventing anything, this just so happens to be the law in Venezuela, as Art. 67 of the Constitution clearly says:

“…sus candidatos o candidatas a cargos de elección popular serán seleccionados o seleccionadas en elecciones internas con la participación de sus integrantes.”

“Its candidates for popular election will be selected in internal elections with the participation of its members”

Nobody can convince me that the MUD held “internal elections”

To me the only possible solution the MUD had was to have full primaries with the participation of anyone. I was in Caracas the day of the primaries for the opposition and since the part of the city where I was had no primary, nobody was even aware that a primary was taking place in 40% of the electoral districts of Venezuela.

Not the best way to get the electorate involved, says the Devil!

I wrote this same rant when talking about the Coordinadora Democratica (Remember them?), who had even fewer primaries. And there are other rants in this blog (Another one here) about this same subject: I truly believe until people don’t feel there is full democracy in Venezuela, people will continue to put down politicians and political parties will continue to be as “caudillistas”, inbred and gerontocratic as they are today.

And the strategy could eventually backfire, as I am told that part of the Government’s strategy is to “back” alternative opposition candidates against candidates like Ramos Allup, hoping to divide the opposition vote. I can imagine thousands of El Recreo voters, casting their vote for an unknown before  doing it for Mr. Ramos Allup. Yes, I dont like Mr Ramos for too many reasons, but the chief one is that he has no place in Venezuela’s politics, because he stopped doing anything about it, except continue being part of this self-appointed leadership boards. But he has also made accusations against people I respect, like Alek Boyd and Thor Havolrssen, which were not only false, but self-serving.

But I am just using him as an example everyone can understan,  I haven’t gone through the whole list, but I am sure there are many more “Allups” among the candidates of the opposition selected by the dedocracy of the MUD: Permanent members of the self-appointed leadership, “living room” politicians who know theory but don’t get their hands dirty, except when it comes time for self-promotion.

Until the opposition starts advocating the need to comply with the basic principles of democracy stated in the Venezuelan Constitution, there will be no progress. Democracy is what it is, not like what someone wants to say it is at some point in time. It is time for at least the opposition’s selection of all candidates and its party’s leaders to become fully democratic.

End of rant! Thank you!

P.S. Just after I posted this, our magnanimous Electoral Board announced that at least 40% of the candidates have to be women. If the MUD had held primaries, this argument would not hold water, as it would not be democratic. But given that they hand-picked their allupses and ramoses, they can go back and chose again and make some of them female. The tricks have just begun! And the MUD ain’t ready, who would have thought, Tibi is a feminist!




Some Music Brought To You by PSUV

June 24, 2015

As people get in lines for shopping, show their cedulas to be able to buy and Venezuela bickers with Colombia and Guyana over borders, the people from PSUV send this message of happiness, patriotism, socialism and whatever…

What do you think?

Elections Are Coming! Elections are Coming!

June 22, 2015


Elections are coming, but don’t get too excited yet. The ever affable and joyful Tibisay Lucena came on TV today and revealed to the country and the world, the closely held secret of when Venezuela’s Parliamentary elections would be. And then she, bitterly and acidly, proceeded to blast all of the critics of the Electoral Board, whose pristine record, from not having yet revealed the final vote of the 2007 referendum, to gerrymandering, to rushing to swear in Maduro the day after the questionable election in April 2013, she proceeded to defend. Deep in her troubled mind there must be an excuse for keeping the date secret for so long. For leaking and telling friends of the Government any date from September to December, before letting the “people” know when the elections will finally be. (Hopefully)

So democratic, it makes her democratic soul tremble with joy to make the announcement.

And then we are supposed to believe now that Obama and Shannon had something to do with this. Because somehow, Shannon agreed with the Capo to let elections proceed, in exchange for some mysterious concession. Because equally somehow we are now expected to see Leopoldo Lopez give up his hunger strike, as if holding elections was the only thing he was asking for. Maybe he will, but the reason Lopez is in jail, is because he is a dangerous organizer and leader, who in 2013 put in danger the Government’s phantom vote factor with his use of a strategy to have witnesses in over 90% of all precincts.

Of course, there are other theories, like Diosdado was negotiating for himself, undermining Maduro, who simply sent Delcy Rodriguez, his Foreign Minister, to spy on Diosdado during the meetings.  A sort of Agente 007 a la Maxwell Smart and nobody noticed that she was there in order to weave a proper conspiracy theory.

But jeez, nobody seems to find it strange that Shannon would meet with Diosdado (and have pictures taken) if he is being investigated. Yes, there is separation of powers in the US, but there is no lobotomy for thinking strategically. If in a few months an indictment was brought forward against Diosdado, the anti-Hillary, anti-Obama, over half of US politicians, if not more, will raise hell and Shannon would be forced to resign.

All of that for mostly ignored Venezuela, on the third year of a US Presidential term, with an unpopular President?

I find that hard to believe…

But Venezuelans seem to believe everything they are fed these days, particularly those in the opposition, even if Chavistas appear to be quite gullible too. One must look at the way people reacted when some Brazilian newspaper suggested Dilma has called her Foreign Minister to find out about what happened to the Brazilain Senators in Venezuela. Until Itamarati issued the a rather bland press release which was followed by Marco Aurelio Garcia’s statement calling the visit an intromission into Venezuela’s affairs, which was finally crowned by Dilma’s own statement that the visit was “shameful”. and an intromission into, bla, bla, bla. It seemed both statements were written by Maduro’s handlers.

But yes, the elections are coming!

And to guarantee their integrity and the reputation of the Electoral Board, Tibisay will only allow the pure, technical and unbiased observers of Unasur!

What a joy!

Unasur will be here!

The same people that backed the results of the 2013 election and called for an audit that was never fully implemented. For their good job in 2013, they get the exclusive in 2015. They can send as many “observers” as they want. Please no experts, just observers. Just like Chavismo runs things in Venezuela, Unasur is not expected to send anyone with too much knowledge of voting processes, computers, cheating and the like. No, Unasur will send true Foro de Sao Paolo sympathizers, for a taste of revolutionary traveling, as well as arepas and cachapas. If they have time, they can visit some of the revolution’s success projects, wherever they may be ,now that most Barrio Adentro’s modules are shut down.

I mean, it was an exquisite way of proving exactly what Tibisay was blasting her supposed enemies for. Venezuela could have invited the OAS, of which it is a member. Too many “come mierdas” there for Maduro. Or it could have asked Disodado’s best new friends from the US to send four people to observe. But no, in the same announcement of the closely kept secret, she gave exclusivity to an organization that has no record, experience or competence on Electoral matters, other than the infamous 2013 Venezuelan Presidential elections.

Truly, you can’t make stuff like this up. The revolution can always rewrite history any way it wants.

But Tibisay better hope that things go well and the revolution stays in power by whatever means necessary. Because if one day the Electoral registry can be examined or somebody sings to tell us how exactly elections were rigged, Tibisay will have to visit The Hague for violating the rights of most Venezuelans.

She will have to get in line to be tried, but she will be there…But I digress.

And now the strategies begin. I must say I thought that the elections were going to be held sooner (September/October) rather than later (December). Because things are deteriorating fast, very fast. Because right now, there isn´t much of anything to buy or its very expensive. While in Caracas last week, I heard all sort of conspiracy theories about the Government stashing money away to import things ahead of the elections and flood the country with “stuff”.

Really? If the “stuff” will be imported by the Government, you have to be truly gullible to think there will be all sorts of stuff around. They will steal half the money, rob half the stuff and in the end there will be too much of many things and little of a whole bunch of others. And I am not counting what will go to Colombia.

And can the “stuff” I arrive in time for December 6th? Call me skeptical of Chavista “planning”, an oxymoron, if I ever saw one.

Maduro’s plan, according to some sources, is to make the election about the “people”. The “people” are PSUV, and of course, the memory of Chávez, who happened to be elected for the first time on …you guessed it, Dec. 6th.

It will not be about Maduro, the economy, Diosdado or anything like that It will be about “Ustedes”, “el pueblo” and “El Comandante”.

Of course, inflation could screw it all up. I hope it does.

A Post Dedicated To Your Dani

June 11, 2015


Your Dani explaining how he listens to the opposition in his “democratic” world

I think that there are few people as despicable as Jorge Giordani in the destruction of Venezuela by Chavismo. The guy has no shame and comes out to speak up and criticize the chosen one, Nicolas Maduro, as if Maduro got there on his own. I was making a commented translation of the interview with Giordani (His words in bold, my comments in italics, not bold), when I saw the great article by that brilliant genius, Laureano Marquez, in which he defends Maduro against “Your Dany’s” attacks. I had to copy that name…

Here is the interview in English (bold) and my instant comments (italics) on everything Your Dany said or was said about him. With my comments, the interview becomes the truth. And, as we all known, the truth shall make you free! Enjoy!

Some call him “The Monk”, perhaps because of its austere and simple life, without extravagance and lack of luxuries. (He vigorously defended buying a luxurious Airbus for Chávez, to be “comfortable”) Tall, thin and reddish, at 75, he confesses to being a scholar (Can he list his publications that have had any scholarly impact? I think there are none, like in zero. He thinks he is a scholar because he reads a lot) and reader at the moment he is re-reading “Don Quixote”. He arrives on time for our appointment, on Wednesday, May 28, accompanied by one of his great friends, Professor Hector Navarro (Another scholarly fake! He brought us the half an hour time change, a costly and useless whim with little redeeming value).

Jorge Giordani, of Dominican origin
(He should have stayed in his birth place of San Pedro de Macoriz and become a ball player, just as his idol Chávez should have), with characteristic gestures of a real Caraqueño (Born in San Pedro de Macoriz?), he talks like a typical Venezuelan. Born June 30, 1940 in San Francisco de Macoris, Giordani, begins to recall events from his own story, he moved to a trip to the past, “a flashback,” starting with the lives of his parents, Primo Giordani, his father, an Italian Communist (How did he inherit his empty and failed ideology?) who was part of the Garibaldi Brigade  (always a loser) during the Spanish Civil War (1936-1939) and his mother, a young Spanish  music and pharmacy student. The Giordani’s  were forced out of Spain (Our loss! They were right, their gain!) through the Pyrenees, which was a painful and long journey in winter, with a child (Not Your Dany)  in her arms, his older brother, to reach a concentration camp in France, where housed refugees from the war in the neighboring country. At the time, they managed to embark to America, the Dominican Republic, from where they emigrated to Venezuela in the 40s (Which means he was like ten years old when he got here, so much for a real caraqueño, no?), the country in which they settled since (Unfortunately!).

He studied in the Escuela Experimental Venezuela and the Liceo Andres Bello, then goes to Italy to study electrical engineering at the University of Bologna.
(A tough and hard life in democratic Venezuela before Chávez). A graduate degree (After he was fired from CANTV, another accident of history, which he fails to mention!) in Development Planning at the Centre for Development Studies (CENDES) of UCV and obtained a doctorate (paid by the State!) at Sussex University (on Urban Planning!) in England. (Note he never studied Economics in his life, but he ran the Venezuelan Economy for 14 years!). He is retired professor of the Central University of Venezuela (He made sure to stop Caldera’s pension reform so that his pension would always be that of a Full Professor. Of course, it was all a waste of time, as the inflation he created has made that pension peanuts). He has written 24 books (How many people have read them? * BTW: He wrote most of them as he was Minister, he had nothing better to do) Planning as a social process; Planning, Ideology and State; The case of Venezuela, the proposal of MAS; Transition Venezuelan and search his own way; The Venezuelan transition to socialism; Gramsci, Italy and Venezuela; Marx was not dead was Clubbing; Impressions of everyday life; among others, and here he presents his latest, Matches and Mismatches in a Bolivarian Construction work. (Even the titles are insufferable)

A student of Marx, Gramsci and Mezaroş
(Pure ideological BS), and identified with the character of “Don Quixote” in solidarity with the struggle of Hugo Chavez, whom he met when the commander was detained in Yare, marking a friendship and working that would last until his physical disappearance. In this period he has served as Minister of Planning and Finance on four occasions, becoming the best-known minister in this area (He was trained in Urban Planning, but that’s it, other than that he has no studies in Economics, nor a track record in the field). Although sometimes he had differences with President Chavez (Particularly when Chávez fired him in 2003 and Giordani held weekly meetings on Saturdays with friends at his home to tell everyone what a disaster Chávez’ Government was) he said that their relationships was always based on the grounds of mutual respect. He is regarded as the architect of the humanist economy (How the Hell do you eat that? As another former Chavista would say?) in that period and one of the indispensable men of Commander Chavez when taking decisions in the economic area. (Few of them any good or based on economic known principles, since he knew little about them)

On June 17, 2014 he was separated
(Read: Fired!) from the cabinet of President Nicolas Maduro, and from there a series of disputes, which he unleashed when he published his famous open letter to the Venezuelan people: Testimony and responsibility to history, whose appearance falls like a bomb in the areas of power and national public opinion. Since then he is considered by some as an authentic revolutionary who had the courage to stop, criticize and warn about the poor economic situation of the country (After he left the Government, while in Government he never said a word); while for others, he is a traitor to the revolutionary process that acts in spite of his departure from power and some more, in not doing so in time, when he was still in power.

This interview has been divided into three parts, in which he talks about his friendship with Chavez, his admiration and affection for the son of Sabaneta, who he says, was a gifted statesman, scholar
(How easy Dany says someone is a scholar) and responsible (Did he mean irresponsible?) to the critical situations that presented themselves (Really?) and whom he had seen, he (Chávez) immolated himself up in building a better country. (No, he ignored knowledge like most of his life and sought the most backwards doctors in the world)

He is critical of the economic model and disruptions of the current power structure.
(Simply a continuation of what he started with Chávez and presided by the man that Chávez designated as his successor. Wasn’t Chavez “gifted”? What a “gift” Maduro has turned out to be!) He warns about the economic and political situation of the nation (Something he failed he failed to do in the 14 years in which he initiated most of the policies continued by Maduro). Analyzes the problem of relative prices that distort economic reality and the serious consequences of dolarization.(Dany is the father of that distortion and the initiation of dolarization. He stopped the Permuta market out of spite and revenge, a witch hunt with vile and malice) He warns of the urgent need to tidy up the economy (Which he never did as Minister!), honestly (your are shitting me), because there is no more time. (He never seemed in a rush when he was Minister). He states that “the Venezuelan economy is a time bomb” continues its analysis (A bomb which he helped build from scratch) “There are three basic elements, structural crisis of capital (Marx and Mészáro) is a global, general, permanent and creeping crisis, it does not solve four basic contradictions, the environment (What did Chávez do about it except allow it to be screwed up?), the nation state and transnational, the problem of substantive equality and the problem of structural unemployment (Of which Venezuela continues to be an example, after 16 years of the “revolution”), that element is there, that touches us all 7 1300 million human beings we are on earth (Say big numbers, so that the BS overwhelms the real discussion), first element . Second particular element to Venezuela: the collapse of the Venezuelan rentist capital, “later adding” we are in a crisis of hegemony, which is not resolved if the means of production are not controlled (Control and destroy, repeat after me, control and destroy). “

Giordani talked about the collapse of the oil rentist capitalism. “The “given away” free time is over, should have been finished long ago
(Did you try when you had a chance?), but we are used to saying “give me mine, with don’t screw with what is mine” (like his pension). Venezuelans did not produce that, it was there. (Like Cadivi, Sicad, Simadi, Sitme and all other of those screwed up things he and Chávez invented) Suppose that oil just ends, what are we going to eat?, ” he said. (And what did you do about it, except give away the oil income?)

For the Professor, it is “a political mistake” to hide the inflation rate, which currently must be breaking thermometers. “With Chavez we always published, and if it was bad we had to explain it.”
(Did Chávez publish the final referendum results of 2007? Or the nutrition or epidemiological data? …Just asking) He explained it or we did.”

In this sense he presents his latest book “Matches and Mismatches in a Bolivarian Construction”, foreword by Professor Hector Navarro and edited by Vadell Brothers as a guide and study material to work on the current crisis.

We also present these proposals for measures to be taken as a contribution to emerge from the pit in which we find ourselves
(And Dany was responsible for):

  • Taking on the crisis as it did in 2009 Comandante Chavez, speaking clearly to the country and the Venezuelan people. (Maduro speaks every night, or twice a day. Chávez always said we were “shielded”, just like Maduro. Like Father, like Son)
    • Nationalization of the financial sector and foreign trade.
    (Good Move, you have intervened, nationalized and screwed up every sector except this one, time to destroy it, in order to complete the job)
    • Immediate restructuring of the state apparatus in terms of state enterprises such as PDVSA, the basic industries of Guayana, the Company of Electricity, Telecommunications, and those dedicated to food.
    (All of the things Dany helped screw up and destroy. As usual, no suggestion or road map of how this will be done, he has no clue)
    • Unify exchange policy.
    (Just like he never did for 11 years)
    • Enact a progressive tax reform.
    (Tax the State?)
    • Freeze the bureaucratic apparatus of the State making effective and efficient.
    (Just like Dany did not try in 14 years)
    • To stimulate domestic food production
    (Which Dany just realized needs to be done) through the protection of small and medium producers in the country and the city.
    • Build an emergency economic team
    (Dany, Hector and Merentes, as usual) that is accountable to the country permanently. (You were never accountable to anyone or anything, remember Fonden? Was it US$ 30 billion that is missing, or am I wrong?)
    • Start a special period of economic adjustment safeguarding the progress of the revolution
    (???????) in the social field and encouraging the creation of productive jobs. (No clue about this, but he will figure it out in a decade or two)

At the end of the interview says he is 24 hours in the service of the Revolution (Fortunately, the revolution is dead) and ends with a message to the Venezuelan people “must be organized. Democracy (Does Dany even know what that is anymore?) has to come out from the bottom. You have to grow and we must speak clearly to the country (Which Dany never did). Assuming the crisis (Which he created)

Way to go Your Dani, it is hard to believe you even exist. Unfortunately, you do and you did.

*(My friend the reporter Andres Rojas has read some of them. Kudos to him that could even finish them!)


Venezuela Marches, People Show Frustration

May 31, 2015

Lilian-Tintori-Lopez-encabezo-venezolana_MILIMA20150531_0018_11Lilian Tintori, Lopez’ wife addresses marchers

Yesterday, Venezuelans marched all over the country, and also abroad, to protest against the Government, in favor of political prisoners and asking for more democracy. The marches were peaceful and attendance was quite nice, given the fear that people have of a repeat of last year’s repression by the Maduro Government. The success of the protest was a tribute to Leopoldo Lopez, who seems more attuned in ail with the opposition than most of the opposition leadership. In fact, it was remarkable that from his cell and using a video, Lepoldo Lopez could accomplish what he did, thousands of people going and protesting, knowing the dangers that they were exposed to.

But what it showed is that people are fed up and ready to protest and Leopoldo has understood that quite well ever since last year. In contrast, the leadership of the opposition unity group, the MUD, really blew it, rejecting the march openly, rather than staying quietly on the sidelines.

What the MUD does not seem to understand is that at this point in time, there is need for many different ways to express opposition. Elections are a nice goal, but here we are May 31st. and there is no scheduled election to take place in 2015. Oh yeah, there should be parliamentary elections before the end of 2015, but what if the CNE does not call for them? Does the MUD have a plan B?

In fact, I find it very hard to understand why the MUD did what it did. To me, it really had only two choices: One to simply shut up, the other to back the march and incorporate demands for an immediate announcement of when the elections will take place into the protest.

It is as if 16 years of dirty tricks and subterfuges have not convinced the MUD that this is not a fair game, this is a game which is loaded with radioactive dice that do whatever the revolution wants and needs. And at every step, the revolution has had weapons, plans and tricks, while the opposition has always had a naive plan A, but no Plan B, or let alone any possible dirty tricks.

But dirty tricks is all the opposition will get from here on, from gerrymandering (here is a simple explanation from today’s twitter): CGP2yuiUgAIofyt

to faking census data, to fielding fake opposition candidates, to cheating on the elections, Chavismo is, as always, ready to pull all of the dirty tricks in the Universe. Including changing laws so that an opposition victory becomes meaningless.

And in the middle of this, the MUD can not even back a protest promoted by one of its leading members who happens to have a very vested interest in all this, given by the fact that he has been in jail 14 months for his strong stance against the Maduro Government.

And the MUD strategy was not to support the march? Gimme a break!

Well, in my humble opinion, they did more to damage their reputation with the rank and file with this decision than with any previous one, at a time that they are trying to promote the vote among the member of the opposition. In the end, it may not matter, Leopoldo will call for people to go and vote and they will follow his wishes. But why waste so much energy in non-existing problems?

What yesterday showed is that the people want leadership. They want to do things, but they do not want to sit passively until the CNE or Maduro or Cuba, whomever calls for elections in Venezuela decides to. They want to put pressure. They have many issues, from democracy, to Human Rights, to crime, to lines, to shortages, but they are being told to stay home till whenever some hypothetical elections take place.But they want action now, and they know now that Leopoldo and Capriles, who smartly backed the march, are the leaders. The rest are just living room politicians taking the supposedly safe road.

But that road does not include the people’s frustration and one day, the people may simply overcome the leadership and act on their own, unless somebody, whether in jail or not, is capable of leading them they way they want.

Elections and Protests are not two different strategies. They are part of an array of weapons that the opposition needs to use. In fact, marches and protests are the way to motivate and promote the vote, when and if, the Government decides that it will finally take place.

The Hyperinflated Arepa Index Part IV

May 26, 2015

arepaIt has been a while since I reported on my Hyperinflated Arepa Index. In April I had one while in Caracas, but the variation in price was so small (see graph) that I did not think it was worth boring you with the small increase.

Then I went back last week, before the unmentionable parallel rate of exchange had soared, and as you can see in the graph above, the Hyperinflated Arepa Index seems to be a leading indicator of what the abominable website reports, as in one month, there was an increase of 53.3%. This is above what the parallel rate rose in the same period.

You be the judge…

The summary of the increases so far are then:

Nov. 17th. Bs 120

Dec. 7th. Bs. 156 Increase of 30% in three weeks

Jan. 21st. Bs. 178.6 increase of 14.7% in six weeks

April 15th. Bs. 187.5 increase of 5% in 11 weeks

May 15th. Bs 275 an increase of 53.9% in four weeks

Since it was almost precisely six months since my first delicious arepa for this experiment, we can quote the half a year inflation of 129.16%.

I could do a fit to the slope, but really, it is only five points, we dont not need such sophistication. .

I guess I will have to continue being a glutton and eat those delicious arepas in the name of data collection and science every time I go there. Will have to bike more too…

Parallel Rate Soars: Whose Fault Is It?

May 24, 2015

Venezuelans love a conspiracy theory. Sometimes it seems it is easier to embrace such theories than to analyze what is going on. Least of all, look at numbers to seek a possible explanation. This week was a clear example of that. As the parallel exchange rate soared, the most common explanation was that a webpage was manipulating the price of the dollar for some obscure or maybe not so obscure purpose.

That webpage claims to obtain its price from whatever its happening at the border of Venezuela with Colombia. These are real transactions. The exchange houses in Cucuta open in the morning and begin trying to make a market adjusting the price according to what they see. I have no clue as to the volume traded in Cucuta every day, but the border has a very active trade and there has to be a way of going back and forth between Bolívars and US$ or Pesos. This is what that webpage supposedly reports.

Of course, that particular webpage has a lot of influence, as it seems to be the one most people check. But let’s look at the variables that affect the exchange rate and what’s been happening in the last few months.

At the origin of everything, is oil. The Venezuelan oil basket determines how any dollars come in every day to the country, whether you believe the country’s production is X or Y, variations in the price of oil affect the cash flow the Government sees. And that determines everything. When the Government had savings and cash lots of cash flow, it would divert some money to the parallel exchange, whether before it became illegal in 2010, after that or in the last few months. The problem is that savings are gone, the Government owes everyone money and it has so little foreign currency that in March it created  a new and newfangled foreign exchange system with three official rates (Bs. 6.3 per US$, Sicad and Simadi) and the second one, Sicad, has yet to have an auction. It is only used as a reference according to the last value it had prior to the new system being announced.

That’s how little money the Government has.

This is what the Venezuelan oil basket has done in the last six months: oilbasketAs you can see, the price hit bottom at $38.82 per barrel the week of January 31st and has recovered to US$ 56.28 per barrel by now. However, most oil sold by Venezuelan is sold on a 90 day basis, so that the Government is receiving today is that of 90 days ago, or roughly February 20th., which was around US$ 47 per barrel.  Thus, cash flow has improved in the last three weeks (In theory the minimum was around April 30th), however, the lower cash flow has taken a huge toll on the savings (International reserves): reserves Reserves began the year at US$ 22 billion, grew to over US$ 24 billion in March and since then, they have dropped to barely US$ 17 billion. That’s a 22.7% drop since January, thanks to the Dominican Republic buying out its Petrocaribe debt and down 29.16% since the beginning of March.

Not a pretty picture.

At that level, liquid international reserves are likely around US$ 500 million at most, which is peanuts for a country the size of Venezuela. And with shortages all over the place and the Government owing money to everyone (A Brazilian delegation of food exporters came to Venezuela a week ago, they left empty handed) there is simply little money for the parallel market.

Thus, as demand soars (companies have to function), supply collapses.

Guess what happens then?

Moreover, some of the supply disappeared as the jailing of a couple of Venezuelans in the US has apparently scared some suppliers of the market.

If goods are scarce in Venezuela, then the greenback seems to be the the toughest good to find.

And if you think that the dollar market price is artificial and there is little volume in that market, let me show you a graph of another market: The Caracas Stock Exchange. Volume in this market is very low, some $50k-$100k per day. Why? Because there are very few shares to be had. Well, this week, as the parallel exchange rate soared 31%, the Caracas Stock Index soared even more, jumping up 42% for the same reason: ibvc Simply put, there are very few stocks sold and people were looking to protect their savings, just like those seeking to buy foreign currency are trying to either protect their savings or keep their enterprises going.

And you can’t blame any webpage for the fact that stocks soared even more (close to 25% more!) than the actual rate of exchange. And there is some real trading in that market…

The point is that what is going on is simply the effect of scarcity. The Government has fewer dollars at a time that it has run down its savings.

And to make matters even worse, the Venezuelan Central Bank keeps printing Bolívars like there is no tomorrow, as shown by this plot of how M2, the Money Supply, has increased since last year:


As you can see, as the price of oil collapsed (fewer dollars), the Money Supply, the number of Bolívars in circulation (which can buy dollars) almost doubled and the savings are practically gone. This means that there are almost twice as many Bolívars chasing those very scarce dollars, local stocks and/or goods.

Simply, a recipe for disaster… So, don’t blame a webpage or a conspiracy…blame reality.

A Priceless WSJ Headline, But Does It Mean Much?

May 19, 2015


While there is no question that seeing Godgiven’s face on the front of the WSJ’s website was extremely satisfying and priceless, particularly to those of us that have spent over a decade trying to unmask the hoodlums in the Chavista regime, we are unsure that this headline will have the immediate meaning that some believe it has.

I mean, it is not as if Maduro got his copy of the WSJ this morning saw the headline and said: “Oh my God, how could he do this?”. I mean, this is old news. How many members of the Venezuelan military close to this person have been declared drug kingpins in the past, including his buddy Carvajal? Who happens to be Maduro’s buddy too…

And this is a press report, not even an indictment. Can we get one, please?

People have many theories surrounding this, but I buy few of them. The first and obvious one is that the Secretary of State’s Emssary Tom Shannon asked Maduro to get rid of Godgiven, showing him proof of his activities and the US would normalize relations and thus the leak


Is Maduro so strong that he can get rid of the most powerful former military in Government just like that?

I am not so sure…

After all, Maduro comes from the civilian, ideological side of Chavismo, while Godgiven represents the connection to active military. How many of his classmates hold important positions in  Government? Maduro’s connection to them is tenuous at best.

In fact, if anything, this could be the spark for increased political instability in Venezuela. If Godgiven sees his political base undermined, he may decide to go for the whole enchilada. And this would bode badly for everything: Democracy, Stability, Human Rights and the future of Venezuela.

But my bet is that this will be turned into a Venezuela vs. the US battle. Another excuse to blame the problems of the country on Obama and his right wing Government. The Evil Empire trying to get rid of the expanding ideological influence of Madurismo and simply another battle in the economic war against the extremely successful economies policies of Chavismo and other stupidities like that.

In any case, we will know shortly who is right on this…



Maracay: Crime Thriving In Venezuela’s Military Enclave

May 14, 2015


This week, the Venezuelan military and the police essentially took over the city of Maracay, attempting to restore order in the crime ridden San Vicente barrio. While most of the news has centered on the origins of this confrontation, what I find the most interesting is that this happens to be ocurring in Maracay of all places.

You see, the city of Maracay, located about 130 Km. South West of Caracas is as much of a military enclave as there exists in Venezuela. Look up, for example, Wikipedia, and you will find the following list of “interesting facts about Maracay”:


After history and Economy and Transport, comes “Military”, because the military plays such an essential role in the life of the city. And under Military, you will find the following description:


Maracay is the cradle of aviation, Chavez led his coup from there, the 4th. Armored division is there and Venezuela’s gun production military company is there.

Despite this huge military presence, the military has been unable to protect itself from the widespread crime of the country. In fact, Maracay is among the top cities in crime per inhabitant and the crooks seem to be armed with grenades and weapons “obtained” from the many military facilities in the city. As an example, when some gang members were killed by the police, the gangs retaliated by simultaneously attacking three units of the investigative police with grenades, which led to the raid on Barrio San Vicente.

Which leads to my main point: Venezuela’s military is so incapable, so dysfunctional, that it can not even protect its own turf. You would think that a city dominated by military life would be the safest, as high ranking officers worry about their wives and kids. Instead, their inability to coordinate and execute, their lack of training and their corruption has made their own turf among the worst in the country.

In fact, the grenades and weapons come from the same factory the military runs. It is just big business to sneak out and sell a grenade here, a box of bullets there and a gun somewhere else. That’s how the gangs armed themselves.

But you can’t blame it all on incompetent military. This is in fact part of the Chávez legacy. Chávez wanted these now so-called gangs to be armed, in order to create paramilitary groups that would support him and his Government when and if the time came. Except that these groups took a life of their own, became independent enterprises, while the military found it hard to go against the Big Boss and looked the other way, while they also enriched themselves.

So now, over ten years late, the revolution tries to stop the monster it created. Reportedly, there were three dead and 800 wounded in the raid and they keep running them trying to isolate the gangs. But the big problem is that those detained will suffer the same system of injustice that has been allowed in Venezuela during the last 16 years: Jails have triple their capacity, most prisoners remain jailed without sentencing and guess who runs the jails?  The same gangs that run San Vicente, kill cops at will and fight the military.

So the military is now being bitten by its own incompetence, indolence and ability to ignore even the problems that surround them. When and if this nightmare ends, one has to wonder if the military simply has to be eliminated, they seem as dysfunctional as the Chavista Government and incapable of contributing to restoring order and organization in Venezuelan society.

Godgiven Traps His Enemies With Him In Venezuela

May 13, 2015


The idea must have occurred to Godgiven C that fateful weekend when General Hugo Carvajal was suddenly jailed in Aruba and barely escaped deportation to the US. At that point it must have been clear to Godgiven, no more Miami, Andorra, Panama and the like in the future for him. Except for places he would not like to visit, like China, Cuba, Iran and Russia, he was now trapped in the hellish country the former Hugo created and he helped destroy. Not even his family could safely visit the Empire or even neighboring countries, as you never knew what trick could Obama play against them with all his influence. Well, he must have thought, if I am trapped in Venezuela and feel so claustrophobic about it, I will make sure my enemies are too. Because he felt truly awful. What would he spend all his money on if he was trapped in Venezuela?

Thus, why jail them? Why not sue the few remaining media outlets in the country and have the Judge ban their owners, Directors, legal counsel from leaving the country and thus subject them to the same unfair punishment the gringos imposed on him?

And so he did. The first chance he got, a really preposterous case, he sued for defamation everyone of importance at El Nacional, La Patilla and Tal Cual and a friendly Judge complied his wishes and 22 members of the respective Boards, including Miguel Henrique Otero, Teodoro Petkoff (again!) and Alberto Ravell (who is not in Venezuela) are now prohibited from leaving the country.

The case is so preposterous that all these media outlets did was simply to reproduce verbatim what Spanish newspaper were saying about Godgiven. This not only violates freedom of speech, but even international treaties exempt such reproductions of news items from legal liability, except for the source.

But it gets even worse. According to Venezuelan law, the Court had to notify each of the defendants, something that has yet to be done and under no circumstance can the Judge rule that the defendants were prohibited from leaving the country or be a flight risk if she had not even talked to them or knew in detail anything about them, other than they were on the Board of these media outlets.

And to add insult to injury, the defamation case got really speedy consideration and resolution in a country where the average prisoner has not seen a Judge in the first few months after its detention and most spend two years without sentence.

Of course, their name is not Godviven C. (A pseudonym used to protect the author of this blog).

Oh! his power! His manipualtion of Justice!

The intent is clear: To intimidate. If the simple reproduction of news items published outside or inside the country by any media outlet can be a justification to sue you for defamation and block you from leaving the country, the few media outlets that maintain some form of independence will be silenced even more.

And reporters, media owners, Directors will all be trapped in Venezuela and with Godgiven to boot. Just think, none of them can take a jaunt to Aruba to get some shampoo, soap or even Harina Pan, let alone enjoy their wealth.

The worst part is that at some point they may even  be trapped for hours with Godgiven in Court.

It is hard to think of worst punishment for them…



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