I have been pondering about the new foreign exchange auction system SICAD since it was first discussed. Besides all of its weirdness, what I have had the toughest time dealing with is very simple:
Why?
Why the rush? Why the second price for the US dollar even if it is a State secret? Why before the election? Why take the risk? Why devote so much time to it?
It can’t be to get more Bolivars. It can’t be to lower the black rate. It can’t be to reduce shortages.
And now that one auction has taken place and Bolivars reportedly assigned to a range between Bs. 12.5 and Bs. 18 per US$, I am left with only one theory:
Someone sat down with Maduro and explained to him that what Giordani wanted was a sure path to self destruction and convinced Maduro to change the whole system and manage the economy differently. And this someone convinced him to start the process ASAP for the good of the economy he will have to manage if he wins. And he decided to be his own man, even if Giordani is still around.
Thus, I think we are in the face of a radical change on how the Government plans to manage the economy. Maduro may remain radical in his political speech, but the moves suggest he will be more pragmatic on economic matters. And the changes in CADIVI seem to confirm this, he switched two Chavez/Giordani guys for two 100% Merentes buddies. And we all know Merentes is more pragmatic and has been losing battle after battle with Giordani since 2010.
Which suggests that Giordani will be gone if Maduro wins, and hopefully someone better comes in.
I have to say this is a step in the right direction, maybe in a month the foreign exchange system will be unrecognizable.
Let’s hope I am right, it is the only explanation I can find for all the SICAD nuttiness and noise
The Devil's Excrement 