While Protests Continue, Government Creates Third fx Market

February 20, 2014


Life in Caracas right now is anything but normal. Last night, I tried to go to the supermarket at &:30 PM as I had little to eat where I stay, but just as I got there, they were closing, as students had started to protest in the neighborhood. Except for some crackers and a precious tangerine, that was all I ate through the Beirutesque evening near Plaza Altamira. Not a bad diet, if you want to look at the positive side.

Today, many people did not go to work, they could not get out of their neighborhoods or they decided they would not hassle the traffic in the evening another day. Thus, Caracas was quite empty, little traffic, quite nice. This despite the almost total blackout and censorship of the news.

But it is getting close to sunset and the student movement is doing their thing, actually moving around, trying to keep the authorities in check. What was a disorganized band of protesters without leaders has by now become a fairly organized movement, with strategies and plans. Last night they were surprised by the strength of the attack, tonight they will not be caught off guard. I saw preparations today, which I will not talk about here, which imply a level of organization not present even two days ago.

And at 4 PM sharp, the students began blocking the Francisco de Miranda Avenue, which last night became a rather violent place. More violent than at anytime in the 2003 strike, more violent than I have ever seen it.

Here were the students setting up at 4 PM:


The Government also knows there is more organization, as helicopters flew over Caracas until a few minutes ago as the sun set.

And today the Government formally announced the Sicad 2, foreign exchange market, creating a third official exchange rate, ignoring the history of all such systems in history everywhere in the world, all of which have ended badly. The more exchange rates there are (there are four if you include the unmentionable) the more in trouble country’s get into.

And Minister Ramirez said that the new “market” (The Government will fix the price) will start on the 24th., don’t believe it for a minute, this thing is as crude as you can imagine. But in the end it is a devaluation, as airline tickets will be paid at this rate (which I think will be south of Bs. 20, but near it). This is another victory of the radical-radicals over the radicals who wanted a floating permuta market.

For foreign companies who have no access to Sicad 1 or Cencoex, this is another devaluation. For prices, this si another push up, more inflation ahead, full speed Nicolas!

And now, I think the effects of the violence and the feeling of being in a Dictatorship prevail over the increasing economic chaos the country faces. The students will not leave the streets, the crisis will deepen and it all be Maduro’s fault. With bodes badly for him. Timing is hard to predict, but I can tell you I don’t believe for a minute Maduro will finish his term. And I don’t want to be too bold in my prediction and say it explicitly, but I think he is doomed if he follows the path of repression and using the armed “colectivos” with the military to repress. By May, add 100% inflation annualized to the mix and things really will be complicated for whomever is in Government.

Tough days ahead for Venezuela. Last night felt like a mixture of the Caracazo and 2003. It was only during those two periods that I have felt that the Government lost control of the situation. It can only get worse at this point, unless Maduro decides to back down.

But he does not appear to be ready to, but neither do the students.

It’s showdown time!

18 Responses to “While Protests Continue, Government Creates Third fx Market”

  1. […] While Protests Continue, Government Creates Third fx Market by Miguel Octavio – February 20 […]

  2. […] are getting more organized. While Protests Continue, Government Creates Third fx Market, effectively devaluing the currency again, and clamps down: Shock Troops Target […]

  3. OyiaBrown Says:

    Reblogged this on Oyia Brown.

  4. Morpheous Says:

    “If not the president, who is putting the thugs on the street? A prime suspect is Diosdado Cabello, the hardline president of the National Assembly. Perhaps the two men are playing good cop/bad cop. Either way, discontent within the army is said to be growing. Repeated government calls for “unity” in the armed forces suggest all is not well in the barracks. He may not be behind bars but, trapped in a vicious cycle of radicalisation, Mr Maduro increasingly seems a prisoner of events.”

    For more point your browser to the following link:


  5. ART Says:

    Maduro has become a liability to the socialist ideology, he is seen as a big pendejo and it would not be surprising if Cabello stabs him on the back, trows him under the bus and blames him for all the problems and deaths and takes the power and becoming a hero to the cause. I think Cabello is as evil as Chavez and has been waiting for his opportunity and this might be it.

  6. Pete Walton Says:

    Interesting about Maduro going after CNN. Freedom lovers here in the states have called it “Chavez News Network,” “Castro News Network” and “Communist News Network.” It seems even a left-wing propaganda operation can’t ignore Maduro’s latest abuses.

    • Maria Odette Foster Says:

      Hello Pete – In Toronto here
      Please excuse my interjection here, but I just found it interesting that a Time-Warrner/AOL media company would be perceived as left wing. But then I am here in a ” socialist ” country with no back-bone. I don’t think that CNN will be “cut from cable” the way NTN 24 was. They Cable companies would loose ( may loose ) another 6 channels along with it, 1 of them a cartoon network. This would put a whole in the pocket of the cable Co.s. I think that is why Maburro just announced a “procedure” to get CNN off air, they just did not order them turned off. ” Procedures ” can take years there.

      • Pete Walton Says:

        Hi Maria,

        Your interjection is most welcome!

        The news divisions of America’s media giants (other than News Corp.) are mouthpieces for the Democrat party, which is the major left-wing party here in the states.

        I wonder if online efforts such as eutv.net will gain traction in Venezuela. If they do, I’m sure Maduro will try to get in their way as well.

  7. M Rubio Says:

    Forgot to add, my s-i-l says that internet service has been cut in Tachira. He’s still communicating with us via cellphone.

  8. concerned Says:

    Not a bad idea with the street chalk or paint. The media has been blocked and now cnn shown the door, but satelites and drones can capture the messages. Maybe even be recorded into history on google earth. SOS Venezuela.

  9. M Rubio Says:

    Here in my small pueblo in the eastern part of the country, things are quiet though even the most strident Chavistas are finally admitting that times are tough. As of yesterday, there were demonstrations in Maturin with one part of the city (Tipuro) completely isolated with road closures. I haven’t spoken to my contacts there today.

    My son-in-law lives in western state of Tachira and things there seem to have taken a turn for the worse after Maduro’s threats in last night’s national ‘cadena’. He says that there’s a really strong military presence there today with national guard tanks, helicopters, and even paratroopers. Businesses are shut down and hardly anyone leaves home. He leases to Domesa which is something of a UPS-type business and says they’ve not opened their doors for 4 days now.

    Finding spare parts for vehicles, tractors, and farm equipment is now very difficult. It’s amazing how much time one wastes just trying to keep things running. How the lights stay on is beyond me.

  10. xp Says:

    7.30 a bit late, but street food
    at the entrance to pque del este,
    is not too bad.

  11. VJ Says:

    Nicolas Maduro: CNN go home !

  12. ErneX Says:

    He’s not backing down, the current cadena is proof.

  13. Dr. Faustus Says:

    Please be careful!

  14. Reblogged this on danmillerinpanama and commented:
    With the nation in crisis mode and protesters becoming better organized, the regime has announced another new foreign exchange market. That makes three, plus the black market. Surely, that will restore peace, calm and prosperity. Not.

  15. Noel Says:

    I think you are right on on Maduro and the rest. Be careful, Caracas looks more and more like Kiev.

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