Soaring swap rate, corruption, shortages and limited primaries welcome me back to Venezuela

May 5, 2010

(Dear Father, I ask that when I resucitate, it may not happen in the Republic of Venezuela)

I went away for ten days and really managed to keep my mind as far away from Venezuela as possible, something which is becoming harder and harder to do. And I must say, it was not only fun to get away but also to ignore the growing problems of our land.

And I come back with the currency soaring and reaching all time lows and the Government, as usual, refusing to take responsibility for its total incompetence and lack of coordination. It helps little when those in the key positions of responsibility have no clue as to what they are doing, but if on top of that they disagree and bicker over policy, it simply gets worse and worse. And thus, while the Government looks for culprits, the enemy is within and the swap rate soars without control. Any fool that believes that the swap rate does not matter to the masses is either nuts, or very ignorant, or simply both.

And Venezuela continues to bleed from corruption, as another Argentinean scandal hits the press. When the buddies of the Kirchner’s and even companies related to past and present Ministers and high Government officials of Mr. and Mrs. K, receive a 15% commission for doing business with Chavez’ Government, you have to wonder how much dirtier it has to get for Chavez to do anything about it. Chavez with his typical “who me?” attitude dismisses the charges, once again turning into prosecutor, judge and jury, deciding that like Maletagate (some of the principals are coincidentally the same) nothing should be investigated. It is as usual a “plot” by the “enemies” of Venezuelan-Argentinean friendship or the like.

And history will judge these “left wing” heroes like Chavez and Lula, on the one hand claiming to care about democracy and the people and on the other allowing corruption to run rampant and naming Mr. Kirchner to preside a less than democratic institution like Unasur, a “union” that only includes those they sympathize with them and will go the way of other useless and irrelevant institutions like the OAS, because they have been either reduced or created just to promote the personal interests of a few. Chavez gives away the farm, Argentina’s oil company never paid US$ 600 million to PDVSA, corruption in inter Government deals is rampant, but Chavez the clown is allowed to appoint kings to empty fiefdoms.

Meanwhile, Chavez’ own election did not go well for him. You can bicker about abstention and whether enough people showed up or not, but you can not argue that it was successful. But the numbers are remarkable, of the 106 “loyal” Deputies of the current National Assembly that aspired to repeat, a meager 22 were able to squeak by, giving clear indication that they got there because of Chavez, have no constituency and did so little in their four year tenure that nobody wants to vote for them.

But even more interesting is that “renown” figures of the robolution like that despicable character Mario Silva or the murderous shooter from Puente El Llaguno Richard Peñalver did not get there either. Instead what is considered the “right-wing” of the revolution, led by Diosdado Cabello, scored a small victory by being more organized and preserving more loyalty from his followers that Chavez managed to do. Of course, some of the losers in these stage will be re-anointed by Chavez guaranteeing the level of loyalty that Chavez the Dictator likes to have.

And the little Dictator showed his class by insulting a reporter for the biggest of all sins: questioning the almighty leader. Cubans are good he said and in any case, he does not have to defend his position. But then he proceeded to do exactly that for half an hour. Next time, only loyal press at the press conference to insure that Chavez’ autocratic and personalistic view can be espoused without impertinent questions by brain washed reporters of the opposition and only the paid slaves of the robolution can ask questions.

And thus I am back, still tired and recovering from resting too much and partying some. The water is back for the time being but the shelves at the supermarket did not look great. To the Argentinean story I will return with more details, but I leave the primaries behind, both sides failed democracy, choosing at will and violating the spirit and the letter of the Constitution.Let’s see what happens in September.

As for the economy, not doing very well so far, soon the Central Bank will let us in on the secret of the first quarter GDP numbers , maybe that jolt will wake up Chavez, Merentes or Giordani, but I doubt it.

18 Responses to “Soaring swap rate, corruption, shortages and limited primaries welcome me back to Venezuela”

  1. An Interested Observer Says:

    Canuck, it suddenly struck me, the similarity between piracy and socialist areperas. In each case, someone undercuts the legitimate business – by different methods, of course, but both with a negative impact. Given that one has government support, the scales are vastly different, but they both affect supply, quality, etc, of what the original producer can make. (At least in markets where the original is, or will be, available, and I’m not sure how that applies to Venezuela at present.)

  2. Robert Says:


    Absolutely believe that Chavez destruction will continue as long as he is in office. His “belief” that profit is bad is bs. Starting the import export business is just another funnel for corruption and an attempt to hurt the private sector. The bright side in the case of imports is government incompetence will guarantee the private sector importers will stay in business as demand will still exist. Since when has Chavez met any public demand with any consistency? And it’s safe to predict his government import/export will go the way of the socialist areparas- shortages, 50% price increases, etc.

  3. Susan Says:

    For your information: News from the US.
    Fri May 7, 11:19 pm ET
    CARACAS, Venezuela – Venezuela’s annual inflation rate has surpassed 30 percent after consumer prices surged in April.

    The Central Bank and National Statistics Institute on Friday reported a 5.2 percent increase in consumer prices during April, driving up the annual rate to 30.4 percent.

    President Hugo Chavez’s government has been struggling against the highest inflation rate in Latin America and a weakening economy in general.

    Prices increased 11.3 percent from January to April, up from 6.7 percent inflation in the same 2009 period.

    Venezuela’s economy shrank by 3.3 percent last year amid a downturn in its all-important oil industry. It’s the nation’s first recession since 2003.

    The country imports most of its food, and Chavez on Friday announced the government will create an import-export corporation aiming to break with the private sector’s “hegemony.” It wasn’t immediately clear how the new state entity would operate.

    Chavez said wealthy Venezuelans involved in the import business “buy abroad, come here and ask for more than it really costs.”
    Can anyone believe it ?

  4. island canuck Says:

    It doesn’t really matter if they ban the movies or not. You can buy DVDs everywhere here for BsF.7 each of good quality & often before the movies are released here.

    All the big movies, Avatar, 2012, etc. were available here withing days of the theatrical release in the US.

  5. Speed Gibson Says:

    Just watched Iron Man 2…great !!! tons of fun !! Scarlet Johansen (sp?) can kick my ass anytime. I seem to recall an article or comment some time ago by one of the Chavez stupid shits about banning “capitalist movies” from countries with snow….. did that ban actually take effect and will you all get to see this movie?

  6. Bill Simpson in Slidell Says:

    BNP Paribas predicts the Euro will equal the dollar by the end of 2011. That could be a big loss if you are holding Euros instead of US dollars.

  7. KA Says:

    oops… Miguel I apologize I just realized I called you Daniel. Sorry about that.

  8. KA Says:

    Daniel, I was wondering if you have any comments or predictions as to if/how the Euro problems might affect Venezuela. If I remember correctly Venezuela was increasing its exposure to the Euro from the US dollar.


  9. moses Says:

    If you want updated infrormation on whats happening in the electrical sector, try this Twitter:

    @cptedelca (In Spanish)

    ( Comite de Profesionales y Tecnicos de EDELCA. LA ENERGIA QUE MUEVE A VENEZUELA )

    In ND:

  10. Antonio Says:

    Island Canut:

    The problem with Planta Centro, it is a general problem, they are still trying to figure out is the problem pressure on the transmission trunk line is electric or hydraulic :-),

    Some ones are expecting water at in the end of the trunk line.

  11. island canuck Says:

    On another subject:

    Another problem at the Planta Centro electric facility.

    “Aunque se desconocen las causas del suceso, se informó de manera extraoficial, que “pudo haber ocurrido por el exceso de consumo eléctrico y la presión que se mantiene sobre la red troncal de transmisión que viene de la central hidroeléctrica de Guri”.

    While the causes of the problem are unknown it was informed by an unofficial source that “it could have occurred due to excessive electric consumption & the pressure on the transmission trunk line that comes from Guri.

    The problems continue.

    What’s with Guri these days? Is it still raining?

    $ is at 8 this morning.

  12. Antonio Says:

    More sooner than later, all economics statistic from Venezuelan State’s Institutions will be open and big lies, like the unemployment percentage, they indicate that is now like 10%, but the real is close to 55%.

    So it will be no surprise that sooner you will see GDP +10%, prediction of recognize international institution is -2.6% for this year.

  13. GWEH Says:

    Gerry, Arria is a wealthy Venezuelan who long ago chose to live in the NE USA (NY) in seemingly self-exile. He’s a good man who’s been taking the fight to Chavez long and hard but he’s too old and detached from Venezuela to be President. Roberto nails it … Diego would be best at his old UN post. I have someone else in mind for the Washington ambassador position.

    Roberto, Diego is among those Venezuelans in the USA that avoids Miami. I don’t blame them but it’s a snotty attitude.

  14. Roberto N Says:

    Arria has a few presumed skeletons in his closet, from his time as Governor of Caracas. There was the famous case of the sidewalks, and numerous other shady deals. (hard to tell if he really was involved personally, but they happened on his watch, on his turf, and as usual, no one went to jail, they went to Miami)

    Granted, these were in what is now considered the “Ice Age” relatively speaking, but if I remember this stuff, and I was a kid then, bueno…….

    Mr. Arria certainly has the capacity and knowledge to be a good leader, he has the credentials. But he also seen as part of the “dinosaur generation” and as such would not garner many votes from a country that is desperate for a new generation to emerge and lead us away from the Esteban Chacumbele circus.

    Now if you named him as Foreign Minister, or back to the UN, then that would probably be a good choice. No question that he’s got the capacity.

    Sorry, Mr. Arria.

  15. Gerry Says:

    Perhaps I’m wrong, but wouldn’t it be appropriate to put some thrust behind Diego Arria to run against Chavez in the next presidential election.
    I think this man has proven himself to be honest and is certainly a statesman.
    He is pretty angry right now but I believe that he has the interests of Venezuela at heart.
    He must have access to many people who would be more suited to hold ministerial power than those we have at present.
    I believe that even if he does not have the encompassing knowledge of all aspects of governance he would surround himself with those who will listen to and act on the the needs of this suffering people.

    ARRIA FOR PRESIDENT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!– But just one term!!

  16. Inigo Montoya Says:

    A few questions:

    1) Did I imagine it, or at one point (after the Televen reporter asked the questions) Chavez said that Venezuela belonged to the Cubans too or something like that?

    2) Since when is Televen in the opposition? Wasn’t it owned by the Cisneros?

    3) Is there any real chance the BCV will tell us the real GDP numbers? IIRC, last quarter the drop was nearly 6%, and that was before the electricity went to hell. There’s no chance it won’t be a drop of at least 8% in this quarter. Also there’s no chance in hell they’ll admit that even though Chavez already said it was meaningless.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: