The Devil's Excrement

It’s the economy stupid! By Teodoro Petkoff in Tal Cual

The Government and its cronies are boasting about the “enormous success” that the placement of the so called Bono del Sur has been, for which the demand exceeded by far the offer. They see a sign of economic health in what is nothing but a symptom of disease. The great demand the “Chak” bond had simply brings out the following things: 1) The wonderful deal which signifies buying dollars at preferential prices, that can then be sold in the parallel market, at a considerably larger price, making a nice speculative gain without any risk at all. I am sure there will be some shenanigans too, for sure. 2) The desperate search for dollars on the part of sectors that really need them for their imports and that are banging themselves against an incontinent foreign exchange control office (CADIVI). 3) CADIVI’s constipation has provoked grave difficulties to those industries that depend on imported raw materials, which in turn generates shortages of the goods they produce. We are told of shortages in car parts and medicines, besides the log list of consumer products, which have disappeared from markets and mercales.

As is well known, nobody learns using someone else’s head and least of all these fake revolutionaries, because in their petulance they think that it is them that invented the wheel and ignore everything that is happening now with inflation and shortages is a subject n which they will have to take a make up test, a subject in which prior Governments prior to this one had flunked.

Nothing new under the sun

They begin by establishing price controls. It is the great panacea blessed by the conventional wisdom of a country that during decades has lived through them and that still believes that is the way to go. But inflation, that old cadaver, revived by the exchange and fiscal policy of this Government, pushes production prices up, and controls becomes a trap that commercial logic begins to break, because nobody can sell below the cost of a product. The controls start to become fictitious, until the threats, the anti-inflationary pacts and laws against hoarding attempt to make them work: then, the produce ceases to produce for the same reason: nobody ca produce at a loss.

Shortages begin; products begin to disappear from markets and mercales. That is not explained by the “Wiseman” Heinz Dietterich nor are the answers in the Soviet manuals. Neither are they in the Cuban advisors, true experts on matters of shortages and fake recipes to face them, but unable to provide the argument of the economic sanctions as the alibi, because it does not work in this case. I, the Supreme must bemoan not being able to appeal to that line, but we, in contrast with the Cubans, are over invaded by gringo products. Now the Government wants to self impose economic sanctions, reducing almost by force.

How can we not remember Clinton: It’s the economy, stupid!

This entry was posted on March 1, 2007 at 7:18 pm and is filed under Venezuela.