The Gigantic Failure Of The Bolivarian Revolution In Two Graphs

August 11, 2013

People still want to defend the Bolivarian revolution. The poor they say, the Justice they dare mention. Democracy, they claim, simply making me laugh.

But the following two graphs sum up why the Bolivarian revolution is simply the biggest scam in our history. Simply indefensible, I just wish I could quantify corruption in a similar graph, to make it three.

1) The inflation rate in Venezuela, either reported by the Government or the implied inflation rate, defined as that measured by the change in the black market rate, is worse than in war ravaged Syria, and only beaten by that of North Korea, as show in this graph ripped off from the Wall Street Journal.

InflationwsjHat tip: JSB, thanks!

2) The fourteen years of the Bolivarian revolution have made Venezuela a very unsafe place to live, with homicides jumping by a factor of 4, making Venezuela one of the most dangerous countries in the world, whether you believe the 73 murders per 100,000 inhabitants of the official statistics (black line) or the 84 of the Venezuelan Observatory of Violence. Note the poor have a higher incidence of homicides and crime than the middle class. (This graph appeared in last Sunday´s (August 4th.) Expediente in El Universal, but was not included in the digital version. Thanks VS for getting it for me.)


Two simple graphs, a Gigantic Failure…

21 Responses to “The Gigantic Failure Of The Bolivarian Revolution In Two Graphs”

  1. For you it is an option, but not for institutions. The volume is very small, less than 100,000 a day and 80% is with trades of Mercantil Servicios Financieros on any given month. It is an option, because some companies have value, like Mercantil and Provincial which are making money hand over fist. The reason it goes up is simple, inflation, these banks have a market share that is constant and insiders buy their shares. I would only buy those two and a more speculative play would be Sivensa. The Government nationalized all its components. The market cap is US$ 40 million at the black rate, the expropriated properties are worth over half a billion dollars, if the Government ever compensates, even unfairly, it should be more than US$ 40 million.

  2. gordo Says:

    Just watching the dolar paralelo. I have no idea where it will go, but I suspect that a hardened Chavista might think “how nice!” it’s wiping out the middle class and creating the classless society! I suspect they might also think that the corruption is part of the price to pay for achieving it, and the demise of the economy as well is worth it!

    Those having dollars must be very conflicted with the temptation of enjoying the exchange rate, but then, what is there to invest in? At this point, the future of private ownership is very uncertain! Our Venezuelan bank account is constantly losing value!

    I noticed that Bank of America has recommended that multinationals who cannot repatriate profits should invest in the Venezuelan stock market. Does that make sense?

    • gordo Says:

      I sense that investing in Venezuela is highly speculative, it will either be a “killing” or a complete loss! I suppose our money in Bolivars might as well go fore broke! What else can I do with it? So, what kinds of investments should I consider?

  3. Roger Says:

    I read financial site report on Venezuela a while back and all I could think of is that the Government makes inflation sound like the inflation is really an increase in GDP (in Bolivars)! In a closed economy like N. Korea one could think that but, in Venezuela that imports everything except Babies and Caca, the international value of money is the reference.
    Regarding murders and crime: Venezuela is a police state! Everywhere you look there is a guy in green with a machine gun and they have been there long before Chavez. Except for my watching one chase street vendors out of the government plaza (with a sword no less), most are only intent on making a few extra Bs. when they can! So it is in the tropics!

  4. Dr. Faustus Says:


    If you had invested ALL of your money in the Venezuelan stock market you would have made a whopping 197% profit! Yup. That’s where the smart money was. Venezuelan stocks. Now, what about the bond market?

    (p.s. I’m just kidding. I know it’s a rigged market, nearly impossible to get into. But, out of curiosity, did anyone make a 197% profit? How?)

    • moctavio Says:

      Local Mutual Funds had a good chunk of money in local stocks by design. I know one (very well) that had Provincial shares at Bs. 25 three years ago, they are 397.50. However, they were 44 in 2007. This is the effect of both devaluation and inflation, at the unmentionable rate, some of these banks and industrial companies are cheap.

    • CARLOS Says:

      There is not a real Venezuelan stock market. It is just a dozen of banks, with near 60-70% of share hold by a strong hands family group and just a pity 20-30% public marketcap. Usually all the traded money volume in a full day is below 100.000 US$..!!!
      Furthermore you may loose the poker hand in a nationalization.

  5. Mauricio Torres Says:

    You say:

    “Note the poor have a higher incidence of homicides and crime than the middle class.”

    Is an inference from the graph or your comment? And what you aim with it?

    • jc Says:

      It means that the almighty revolution isn’t helping those it purports to help the most, the poor. Most murders happen in the barrios so yes it does disproportionately affect the poor. Just as the gas subsidy disproportionately helps the more affluent (the poor don’t have cars, they smuggle the gas into Colombia).

  6. Getashrink Says:

    A very large sector of the population doesn’t see the problem of crime and insecurity as one the government is responsible of tackling. I think this has to do in part with the fact that the problem was already pretty bad before Chavez got to power, so even though the problem has gotten a hell of a lot worse in these 14 years, people refused to put any blame on the government because, you know, they loved Chavez… Is the government going to be able to continue pulling the same trick now that Chavez is gone? That’s one question.

    Concerning inflation, Chavez was able to convince millions of people that this problem (and any other economic problem for that matter, such as, e.g., shortages) was exclusively the fault of a conspiratorial private sector. How much longer is the government gonna be able to keep people convinced of this? That’s the other question.

    And since you also mentioned corruption, I want to say that Venezuelans have never really had a problem with that. I remember when I was a boy that people used to say “I prefer to vote for AD instead of Copei, because the “copeyanos” steal and don’t let anyone else steal, while “adecos” steal but let everybody else steal as well”. Yep, that’s the moral standards we have had in the last 50+ years. The bottom line is that corruption alone is never bound to make the government unpopular.

    • moctavio Says:

      Well, if it was “pretty bad” before, it is now four times worse, I dont believe in that. In polls, people say crime is the second problem behind inflation.

      • Charlie Says:

        Miguel, you’re right. People do see crime as a big problem. However, as Getashrink says, for whatever reason people don’t blame the government ……. it’s a consequence of capitalism, blah, blah, blah.

  7. You are right, only one bar for North Korea, I thought it was ifficial inflation. Well, it is even worse!

  8. JFE Says:

    I don’t get it. You say that Venezuelan inflation is only beaten by that of North Korea, but the graph shows an inflation of only a third than Venezuela’s

  9. TV Says:

    There was a major fire in a refinery again. Production was “not affected”, according to Asdrubal (sounds like a name of a biblical demon, really) Chavez.

    Judging from the pictures, it’s just one more lie, but still a topic to cover.

    • NorskeDiv Says:

      How common is Asdrubal in Venezuela? I know the origin is Phoenician, there is a player for the Cleveland Indians named Asdrúbal Cabrera.

  10. m_astera Says:

    Round and round and round it goes.
    Is that why they call it a revolution?

    • NorskeDiv Says:

      Yes, I think that was the misunderstanding. Chavez meant “the same old policies once again” as in the way a Marry-Go-Round revolves. not as in the french revolution.

  11. Virginia Laffitte Says:

    Revolution?? If only they could get serious about doing something about the
    murder, mayhem, lies, greed & and total rape of Venezuela!! There is no law..
    Every person in some seat of power is it in for the pay off..HOW, can those who care get past that??!

  12. Glenn Says:

    Too bad there is not something similar for corruption as the bogus revolution is only a cover for rampant stealing and never anything more.

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