Venezuela is living a sort of suspended animation. Only a few months ago, suggesting that there would be no devaluation by July would have seemed nuts, but here we are less than ten days from July 1st. and as I expected, the “official” rate of exchange remains at Bs. 2.15 per US$. The worst part is, that the longer it is held fixed, the bigger the explosion will be in the end.
As Chavez hopes for a recovery of oil prices, the truth is that nothing will save him by now. Oh yes, oil prices are up to US$ 70 per barrel, but the average price of the Venezuelan oil basket, so far this year, is roughly at US$ 50 per barrel, a level impossible for the Venezuelan economy to be sustainable for the remainder of the year.
What is likely to happen, is that the economy will shrink dramatically in the second half of the year and that demand will simply collapse. As importers go to the swap market (even pharmaceutical companies are not getting US$ at Bs. 2.15), prices will jump so much that people will not be able to buy stuff (and will get unhappy!) and even if Chavez does not want you to buy imported diapers, even his factory is likely to find problems to produce his much touted Bolivarian shit absorbers.
And even now, it seems like under ignorant Giordani’s tutelage, Chavez refuses to devalue, setting up the country for an even bigger devaluation later in the year.
But rather than paying attention to these problems, the Government continues on its confrontational road, worrying about survival via politics, rather than trying to patch up this almost unpatchable economy.
And reading the political end of things in the daily news is simply too much. Here is a Government trying (what for?) to look democratic, and the Supreme Court has just validated prior censorship and given the Minister of Infrastructure the power to exercize it. If he does not like and ad or an opinion, he can simply shut down the TV station, radio station or blog for that matter, even if Art. 62 of the Constitution gives everyone the right to say whatever you want. But I guess Chavez is beyond the Constitution by now. He used to show it all the time, the”best Constitution in the world” he used to call it. I guess those were the days even for those that objected his Constitution but believe it is there to be respected by all.
And then I read about the Organic Bill for National Security, which declares (Article 47) all basic industries as “security zones”. Funny, security zones have been out of fashion since 2002-2003, when the Government decided to declare security zones around any place it did not want opposition protests around. So now, all large unions in the country are simply screwed, they can’t protest where they work! It must be that unions are by now controlled by the right wing in Venezuela. Whatever that may be.
The funny thing is that if you think Chavez is left wing, how about Pablo Medina accusing Chavez today of giving the country away to foreign powers! According to this member of the opposition (Yes, somehow, he is supposed to be on my side, even if I have yet to find where I belong!), Chavez gave up our claim to part of Guyana, gave away part of the Orinoco oil belt to Brazil, the island of La Orchila to the Russians and he did not give Colombia the Gulf of Venezuela because people found out about it!
To add to this confusion, today I learn that the President of PDVSA, Mr. “I decide everything”, went to the Prosecutors office to ask that the former President of PDVSA Gustavo Roosen, be charged for giving away the Boscan field without opening up the process for bidding!!!
Jeez, Mr. Ramirez could have fooled me! Isn’t he the one that has rewritten contracts, giving them away, signed a loan guaranteed by the heavy crude in the Orinoco and gave at least a half a dozen areas in that belt to friendly countries, all without consulting with anyone?
It must be that he can’t accuse himself or something like that.
Meanwhile, Chavez keeps saying that he will continue taking away from the oligarchy what they have taken from the “people”, but he says little about what his cohorts are taking away from the people or the oligarchy and creating a new oligarchy, the “Bolibourgeois”.
Because I find it fascinating that while Chavez is nationalizing banks and creating Bolivarian insurance companies, those close to him keep buying banks and insurance companies and paying through the nose for it. Has it occurred to Chavez that these guys may have plans that do not include him? Maybe when he says someone wants to kill him, he is looking in the wrong direction.
Thus, it gets harder and harder to understand Venezuela, so I better follow Iran much closer than I am, after all, it is much simpler to understand what is going on there.
Let me make it a simple analogy to Venezuela. If Iran were Venezuela, what is happening there would be that a Chavista candidate beat a dissident Chavista candidate (while the opposition was not allowed to run) and the dissident candidate does not want to accept the results of the Electoral Board. Almost the same, except there is no opposition, no?
The Devil's Excrement 
June 23, 2009 at 8:25 am
Tosh:
Wonderful article, thanks for the link. I am glad that the Bloomberg canard has been exposed by that stalwart defender of Man & The Truth: Venezuelanalysis.
You can see the excellent journalism, with titles to other articles like:
“Separatist Opposition uses paramilitaries for social cleansing”. That ought to put paid to any doubts we might have had regarding crime in Venezuela. Now we know it’s the oppositions fault, too.
Now if Guayuco Inc. can come up with a diaper for verborrea, we’ll really be making strides.
June 23, 2009 at 1:28 am
The US is still at least a few years behind. Our ‘Glorious leader’ has not spoken out strongly against the tyranny in Iran while yours has embraced the tyranny. Ours just wants to keep the door open for ‘dialogue’.
Your government nationalizes and gives away companies to cronies at a whim, ours still find it necessary to fire those pesky watchdogs Inspectors General when they catch a crony breaking the laws.
You have prior censorship already while our administration has argued in front of the Supreme Court for the power to ban books and films that even barely touch on ‘politics’ (Anything they say is political) if even a dollar in funding came from a ‘special interest’ (define that: Anyone with an opinion) and even if one line in a 500 page book got their dander up.
I doubt the SCOTUS accepts that anti-1st amendment view, but who is to say they won’t in a year or two when new judges could be added?
Yup, we, the US, are just a few years behind you.
June 22, 2009 at 9:25 pm
http://www.venezuelanalysis.com/news/4540
June 22, 2009 at 9:25 pm
the article by Bloomberg is DISINFORMATION because the website Venezuelanalysis has an article to the contrary.
BTW, Venezuelanalysis is not going out of business, the funding drive is an attempt to make them look independent and grass roots. Any monies received will go to Greg Wilpert, the husband of the Venezuelan Consul in NY (second highest ranking diplomatic post in the US). Greg travels the US preaching BS about Venezuela all expenses paid … nice little way to see the US.
June 22, 2009 at 9:16 pm
Fear not Andromeda, we don’t need the Japanese when we have the Iranians and their TECHNOLOGY TRANSFERS to carry us forward (not to be confused with Chavez obtaining a nuke from Iran) … I’m talking about bicycles, tractors, dairy factories, high explosive factories and automobiles.
Just watch how the Iranians mullahs squash the US sponsored illegal fascist opposition … Chavez will do the same when the time comes.
June 22, 2009 at 7:48 pm
Did you mention a few days past, of the need for foreign troops to be more effective in putting down a potential insurrection, rather than using the home countries armed forces?
http://www.ibtimes.co.uk/articles/20090622/revolutionary-guards-iran-iranian-protests.htm
June 22, 2009 at 7:34 pm
Miguel, sorry for the OT post, but I think this hasn’t received much coverage…yet.
Japan May End $1.5 Billion Venezuela Loan Plans After Seizures
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=azoc7oRS4mRc
June 22, 2009 at 6:06 pm
OT:
We have friends from Vzla over here for a 3 weeks vacation.
The problem they face, theire CC – Amex – I dont know what bank – is not working on ATM´s till yesterday they could pay with it. Today no more cash on the ATM and the card was not accepted anymore in the shops. They still have nearly all theire $$ Limit on the cards. Does anyone know/has a link or information about blacklists of venezuelan Banks over here in europe?
At my local Bank here we did not get any information why the card/s is/are not working anymore.
I just hope we dont get hit by a bank that was not paying theire bills..
Can you emagine how embaressing it is to stand at the counter and the card is not working? You know that you have enough money on it, the people around you dont… ok I payed the bill in cash, but I think my venezuelan friend will never ever go to that shop again. And is affraid to use that shit card again.
I hear before many times about that kind of thing happen, emagine youre in a hotel and you can not pay the bill because your bank is on a blacklist..
I guess Hugo does not have any problems to get his bills in foreign countries payed – you ppl over there pay for him having a good time overseas
Greetings from germany
June 22, 2009 at 4:24 pm
Yesterday in Alo Presidente Chavez sent his support to Armadinejad blaming “the capitalists” for the chaos over there. An officialism newspaper (Kayhan News/Tehran) claimed today in its front-page news that the CIA had payed 400 million dollars for creating havoc in Iran… Have I heard that before? Anti-government protests in Venezuela were paid by the CIA, people are willing to die because of a few CIA dollars!!
June 22, 2009 at 4:14 pm
Were “Guayucos” inspired by Chavez wishing he had been wearing some back on Feb 4, 1992?
June 22, 2009 at 1:34 pm
Haha-exactly
And if she keeps turning left, she will get to Miraflores.
June 22, 2009 at 12:34 pm
Coye Miguel, esta se perdio!
Susan, you turned left instead of right and ended up here. Go back, double around the lake and go LEFT.
June 22, 2009 at 11:43 am
Here is someone in the US who doesn’t need rthe stimulus. We wonder how many more there are .
Perhaps the following article could explain part of our Arizona Budget deficit. We wonder about other states. Sounds like a Chavistomics ?
I have worked for 59 years and never made 48K. ( 90 hours past my master’s degree.)
Perhaps reporters are paid like Hager ?
Haeger contract vote unanimous
By LAURA CLYMER
City Editor
Saturday, June 20, 2009
The Arizona Board of Regents unanimously approved a three-year contract extension with a $48,000 salary raise for Northern Arizona University President John Haeger.
Haeger is under contract until June 30, 2010. Through then, he’ll be paid $300,000 in salary, plus an additional $114,000 in housing and car allowances and retirement contributions. The contract extension OK’d Friday morning by ABOR doesn’t go into effect until July 1, 2010. He has said he will donate the first-year increase to a foundation for student scholarships.
Regent Robert Bulla commended the many hours ABOR staff spent reviewing and evaluating Haeger’s performance, which Bulla described as “extremely positive.”
“It is apparent that he has accomplished a great deal” at NAU, Bulla said.
Without additional comments from the Regents, the board approved the deal, which will keep Haeger at the NAU helm until 2013.
How about a cap on college pay ? Cap on Regents pay ?
S.