The Devil's Excrement

Venezuela’s President Hugo Chavez claimed to have foiled a coup attempt against him today. The truth was that the “coup” appeared to be more like a comic opera in the words of its suspected leader 83-year old Enrique Tejera Paris. In the middle of the night military and intelligence police searched his home accusing him of plotting to kill the Secretary General of the OAS Cesar Gaviria who had left on Friday. During the raid a map supposedly was found that described the takeover of the Presidential palace with local police (??). When Tejera Paris, a former Minister of Foreign Relations, showed up at the Intelligence police there was no formal opening of a case against him and he was not even detained. Chavez Foiled or Chavez Folly? You be the judge.

(That Mr. Tejera may be conspiring against Chavez may be true, roughly 60% of the population appears to be doing it, including me. The fact that he was not detained proves there was no solid evidence against Mr. Tejera and Mr. Chavez is simply VERY paranoid))

One has to wonder what happens to people when they become Government officials. I have (had?) a reasonably good impression of the Minister of Production and Commerce of the Chavez administration, at least a better opinion of him than most of the Cabinet members. Rosales is a former Professor of the local MBA school IESA. But today he won the October Maza Zavala economic stupidity award for his statement on inflation in 2002. Said Rosales:

“projections that inflation will reach 35%…..are political, but a number like 26% (for the year) seems reasonable”

 Now let’s look at the numbers. The Venezuelan Central Bank reported on Monday that inflation for the month of September was up 4.5%, given a total value for accumulated inflation in the year 2002 of 25% . Thus for the Minister’s prediction of 26% to become reality, the CPI would have to rise less than 0.3% for three months in a row. Now the lowest monthly CPI in Venezuela for the last four years was 0.4% in February 2000, thus it would seem somewhat difficult for it to be below 0.3% for three months in a row. Moreover, The CPI in September was the highest of the year and the highest in four years, so there is no reason to expect a dramatic drop in the last three months of the year. In fact, if we are benevolent and assume the CPI will be in the last three months similar to the average rise per month this year of 2.5%, then the “political” prediction of 35% becomes a very precise reality.

Now, how can a reasonable intelligent person say what he said? I guess it must be the same “street smarts” that led him to accept the position of Minister in the Chavez Government…..

According to Strategic Forecasting, the US and Hugo Chavez’ Government have some sort of secret understanding such that the US Government will not interfere with internal politics if Chavez guarantees supplies of oil in case of a US-Iraq war:

“Venezuelan relations have shifted dramatically since President Hugo Chavez hinted in news interviews last April that the Bush administration supported the political violence that briefly toppled him. This new relationship is based on mutual self-interest. In return for guaranteed oil supplies and anti-terror cooperation, Chavez apparently believes the Bush administration will not interfere in his country’s domestic political crisis”

I find this hard to believe. First of all, it would imply trust in Hugo Chavez which he has done nothing to earn. Second, it would imply strengthening Chavez’ position at a time when he might be getting ready to purge the military and guarantee mantaining a stronghold in the country for a long time. I can’t believe the US would like a strong Chavez so close to home and is willing to go all the way to Iraq to get rid of Saddam. Third, US policy certainly does not seem to be unified when it comes to Chavez. There are reports of a CIA meeting on Venezuela to understand what may happen in the near future and Otto Reich’s comments on “nobody copying” the Venezuelan model are not exactly very friendly ones. While I could see why right now the US would like Venezuela to be quiet, they may have just sent the opposition a message to delay any coup attempt.

(Note added the next day: Now Stratfor says a local group is ready to stage a coup and the Chavez Government will declare a state of emergency to avert it…as ususal in Venezuela…stay tuned…)