- Between Dec. 29th. and Dec. 30th. Venezuela’s International Reserves went up by US$ 5 billion, which remains largely unexplained until today. Obviously, this was some last minute manipulation by the Government. In the old days, PDVSA was obligated to turn over to the Venezuelan Central Bank all of its foreign currency, except what it needed for expenses. This is no longer the case, so there is little transparency as to what the numbers mean. My theory is that this was done in order increase reserves so that Chavez can get away with withdrawing this month US$ 7 billion from reserves and give it to development fund Fonden and today El Nacional gives a very confusing story that seems to confirm my theory. The story says PDVSA owed the Government a dividend from 2007 and some of the money came from Fonden.
- Inflation for the year did indeed close above 30% whether you used the new and improved national index the INPC, up 30.9%, or the old Caracas CPI, up 31.9%, a little bit off the initial Government target of 11% last January (Cabezas even talked about 3% at one point), 18% in June and 27% in September. More ominously, Food and Beverage prices were up 41.6% according to the INPC or 46.7% according to the Caracas CPI. Of course, the Minister of Light Industries and Commerce came in with his revolutionary and idiotic theory that the poor are not affected by inflation as much as the rich because the poor purchase their goods at Mercal, as if controlled goods were not at the heart of the measure of the CPI. (Which ean inflation is higher) Moreover, the fraction of a household budget spent on food is much higher for the poor than for the better to do. This shows how indolent and ignorant these officials are.
- And PDVSA announced that it will cut 189,000 barrels a day of production in January to comply with OPEC’s cuts. However it said it had cut in October and November, 46,000 and 129,000 barrels a day, but the November and December OPEC reports showed cuts of only 29,000 and 20,000 barrels a day. Moreover, the cuts seem to have been imposed on the joint partners projects which are being asked to cut 20% of their production. The good news is that if OPEC keeps cutting, PDVSA and the Government will have to stop lying as their virtual production, now at 3.1 million barrels of oil a day, will converge to the real production of around 2.4 million barrels of oil a day.
- And funny man Juan Barreto, the former Metropolitan Mayor of Caracas, authorized additional expenditures for US$ 87 million in the week after his party lost the election. I wonder if the Comptroller will ban him from running for office in the future. The new administrators also found more than 500 phantom workers in the Metropolitan mayors office. These workers had no formal functions except to be ready to receive orders from three Deputies of the National Assembly to mobilize for spontaneous protests as well as providing protection for political figures.
- And monetary liquidity, M2, the measure of how many Bolivars are out in the Venezuelan economy closed the year at US$ 89 billion, up from US$ 71 billion on January 1st. 2008, or an increase of 25.2% for the year. In order to attempt to sterilize this, the Central Bank had issued by the end of the year a total of US$ 24.7 billion in short term CD’s to the banking system. And the Government wonders why there is so much inflation…
Archive for January 11th, 2009
Economic tidbits from the Chavez revolution
January 11, 2009Lots of species, one borrowed
January 11, 2009
Sophronitis Coccinea Aurea on the left, this plant flowered three times in 2008. On the right, Pablo Figueredo sent this Shomburgkia Undulata Marisabel de Las Casas.
Had troubles getting this Comparettia Falcata all in focus.
On the left a close up of Dendrochilum Glumaceum. On the right Cattleya Lueddemanniana Maruja x Pto. Cruz
This is the first flowering of this Cattleya Jenmanii Gerd x Claudia. Coerulea Jenmanii tend to have a horrible shape, but this one is not so bad.
Two Cattleya Walkeriana. The Corulea on the right is called Manhattan Blue, it is not great, but the plant grows a lot, this was part of six flowers the plant had this time around.
The Devil's Excrement 