Imagine a
country in which a Central Bank Director warns that a change in the law will
eventually “burst somewhere”. Markets would panic the currency would
drop, Congress would reconsider what it is doing.
But not in Venezuela.
Yesterday the Finance Commission of the National Assembly approved the reform
of the Central Bank Law requested by Chavez and Central Bank Director Armando
Leon had
such dire warnings in an interview in El Universal today. But nothing
happened. The currency can’t move because there are exchange controls and
little money is invested in the local stock market these days.
But Leon’s
statements represent a very serious warning by a trained economist that nobody
could accuse of being rabidly anti-Chavez. Leon warns that the transfer of
international reserves will create economic disequilibria. He goes even further
than that warning: “If that is maintained in the reform, there will be a
permanent financial instability”, concluding:”sooner or later the pressure
created by these changes will burst somewhere”.
Scary warning from a respected central bank board member.
The Devil's Excrement 
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