Archive for January, 2007

Un figura vale mas que 10.000 palabras #25: Liquidez monetaria, Plazos Fijos del Banco Central y el encaje bancario.

January 31, 2007

(English version here)

Esta figura va a necesitar muchas palabras y explicaciones, pues es necesario paar describir el dificil problema al que tienen que enfrentarse las autoridades monetarias venezolanas y puede ser un poco técnico para muchos, pero trataremos de hacerlo para que se alo mas comprensible posible.

El grafico que se muestra arriba se compone totalmente de datos de la página Web del Banco Central, convertido a dólares americanos al cambio oficial de Bs. 2.150 por dólar. La curva roja representa la liquidez monetaria (M2) integrada por todos los bolívares en circulación, incluyendo todas los cuentas de ahorros, repos y plazo fijos en los Bancos. Lo primero que hay que hacer notar es la rápida expansión del M2, que ha ido de 20 millardos de dólares a principios del 2005 a 55 millones a finales del 2006. Éste representa un aumento de 175% en dos años y
del 69% para el 2006.

Este crecimiento en la cantidad de dinero en circulación es un problema para el gobierno. Demasiado dinero en circulación presiona la inflación y, dado que lasta tasas de interés son extremadamente negativas (tasa en cuentas de ahorros del ~4-6%, inflación del 17%) esto también presiona el tipo de cambio paralelo cuando la gente busca comprar divisas en el mercado paralelo para proteger sus ahorros.

De la misma manera, cuando hay demasiado dinero en circulación dentro de un sistema de control de cambio, esto también conduce a los comerciantes al mercado paralelo, para reponer sus inventarios cuando las autoridades no les autorizan dólares de forma dinámica y eficiente o simplemente no les autorizan divisas para sus importaciones.

En la figura anterior (en ingles) hice notar que la deuda de Venezuela es bastante manejable. Esto es cierto, pero el Banco Central puede también endeudarse independientemente del Gobierno. ¡Y lo ha hecho en grande! A medida que el M2 creció mucho en el 2005 y 2006, el Banco Central venezolano comenzó a emitir plazos fijos a las instituciones financieras locales para absorber parte del exceso de la liquidez monetaria o “esterilizarla” en la jerga de las autoridades monetarias. La curva anaranjada muestra el crecimiento de estos plazos fijos en los últimos dos años, que eran casi inexistentes en el 2003 y ahora su emisión ha aumentado a la cantidad asombrosa de millardos de dólares. La mayor parte de estos plazos fijos son a 30 días y reciben un retorno anualizado del 10%. (Una fracción recibe solamente 6%, pero esto representa un monto pequeño, no importante para esta discusión).

Además, los Bancos tienen que poner como reservas en el Banco Central el 30% de todos sus depósitos, el llamado encaje bancario, la mitad del cual recibe una remuneración. El encaje es la curva verde de la figura. La curva azul es lo que llamo ABS en el gráfico que es la suma Absorción (ABS)=Plazo Fijos+Encaje, cuyo total esta actualmente en 30 millardos de dólares, y que representa toda la liquidez absorbida por el Banco Central (Hay otros montos menores que también ignorare para simplificar la discusión).

El problema para las autoridades monetarias es que el M2 ha crecido demasiado y el Banco Central no puede continuar emitiendo plazo fijos sin límites. ¿Por qué? Muy sencillo, porque puede quebrar. Lo que ocurre es que el Banco Central paga intereses sobre los plazo fijos, a partir de los que a su vez recibe por invertir las reservas internacionales del país. Las reservas están actualmente en 36 millardos de dólares y aunque no se sabe cómo las están invirtiendo en detalle, sabemos que una fracción importante ( ~25%) está en oro, que no recibe ninguna remuneración. El resto nos han dicho está invertido principalmente en euros, lo que quiere decir que tiene un rendimiento entre 3.5-4%. Si somos generosos y decimos 4% (podríamos decir el 5% y la discusión no cambiaria), eso significa que el Banco Central tiene un ingreso de cerca de 1 millardo de dólares por este concepto.

¿Pero ven el problema? El Banco Central recibe un millardo de dólares en intereses pero tiene que pagar el 10% sobre alrededor de 18 millardo de dólares en plazos fijos, o 1.8 millardos y aproximadamente 10% más sobre la mitad del encaje de los bancos, que serian unos 500 millones de dólares adicionales para un total de 2.3 millardos de dólares. Esto genera un déficit importante para el Banco Central.

Y esa es la razón por la cual el Banco Central no puede aumentar sus operaciones de absorción; está perdiendo demasiado dinero emitiendo los plazos fijos. El año pasado, el encaje bancario
fue aumentado hasta el 30% para mejorar la situación y el Banco Central ha mantenido aproximadamente 18 millardos en plazos fijos, pero no puede emitir más. El problema es que el M2 sigue creciendo mientras que el gobierno gasta, gasta y gasta.

¿Por sucede esto? Muy sencillo. La liquidez monetaria viene del Banco Central que emite Bolívares contra las reservas Internacionales que tiene en dólares, básicamente cuando PDVSA le da dólares. Pero a algún ignorante o iluso (¿el actual ministro de las finanzas?) se le ocurrió la idea de darle parte de las reservas internacionales al Fondo de Desarrollo, Fonden, porque había un exceso de reservas. Por ello, las reservas internacionales se han mantenido constantes, mientras que la liquidez monetaria se ha expandido dramáticamente en los últimos dos años. Entonces, si no le hubieran quitado reservas al Banco Central, éste podría financiar mayores operaciones de absorción. Pero la extracción de reservas la han hecho ya dos veces y Chávez tiene ya las intenciones de hacerlo otra vez pronto, por una cantidad de 8.7 millardos de dólares, dejando así sólo 27.5 millardos en reservas internacionales o menos, si el petróleo se mantuviera donde está hoy.

¿Por qué el Banco Central no quiebra? Porque han utilizado hasta ahora artificios contables extremadamente creativos tales como que el gobierno le pague viejas deudas y que permita que el Banco Central tenga ganancias por cambio de la moneda en bolívares. Pero ellos saben que no pueden aumentar estos mecanismos mucho mas allá de lo que lo han hecho.

Y todo esto es la razón principal por lo cual el cambio paralelo está bajo presión. En la medida en la que la liquidez monetaria ha aumentado, la absorción se ha mantenido constante y mayores cantidades de dinero en circulación han buscado el mercado paralelo. Desafortunadamente, el gobierno no tiene muchas armas para luchar contra esto, precisamente porque creó tanto dinero inorgánico.

Veamos las posibles opciones para el Gobierno en este momento:

1) No puede aumentar la emisión de plazos fijos, el Banco Central tendría problemas.
2) Podría aumentar el encaje bancario, pero eso podría crear problemas de ganancias para algunos Bancos, así como presionar las tasas de interés hacia arriba fuertemente.
3) Podría emitir un bono denominado en dólares para absorber parte de la liquidez. Sin embargo, si hace un año una emisión de 3 millardos de dólares era el 20% del exceso de la liquidez (la diferencia entre las líneas rojas y azules en el gráfico), hoy sería solamente el 12%. Por lo tanto, tendría que emitir un bono por seis millardos de dólares para tener un impacto equivalente, lo cual podría ser demasiado grande para los mercados internacionales actuales. En todo caso, en un par de meses la nueva liquidez eliminaría el efecto de una emisión tan grande.
4) Podría devaluar. Esto a su vez, devaluaría la deuda interna del país, así como los plazos del BCV que serían más fácil de pagar para esta institución. También daría al Banco Central nuevas ganancia en moneda extranjera. Igualmente le quitaría presión al mercado paralelo y
proporcionaría más Bolívares al gobierno para gastar.
5) Podría limitar los retiros a las cuentas bancarias, estilo de “Corralito”.

Como uno lo mire, no es un cuadro muy bonito. Como he dicho antes, uno puede ignorar temporalmente las leyes de la
economía, pero al final éstas terminan imponiéndose. Es un fenómeno íntimamente relacionado con el Excremento del Diablo y sus corolarios.

De tontos, la trampa del político y los controles de cambio (o desear una cosa no la hace realidad)

January 31, 2007

(English Version here)

Los políticos ciertamente son de otra especie. Pueden mentir,
pretender ser estúpidos, ser estúpidos al igual que cínicos y mantener
la cara en alto y hasta sonriente durante todo el proceso. Esto es
aplicable a todos los políticos venezolanos, de la Cuarta y de la
Quinta República, esto no es algo nuevo, ni exclusivo al gobierno de
Chávez, pero el espectáculo de los últimos días respecto al mercado
paralelo y el control de cambio es definitivamente uno de los más
patéticos que yo haya visto

La primera cosa que es impresionante sobre los políticos—y repito,
esto se aplica a los del pasado, así como a los del presente— es la
inocencia de creer que si existe un problema, uno simplemente legisla y
este mágicamente desaparecerá. Venezuela ha tenido por años un sistema
judicial que en su mayor parte es inoperante y corrupto. A pesar de
esto, el énfasis de los políticos en Venezuela ha estado siempre en
crear nuevas leyes, que en hacerlas cumplir. Usted simplemente puede ir
a cualquier semáforo en las calles de Caracas y observar cuán
irrelevantes pueden ser las leyes, tanto para las autoridades, como
para los ciudadanos.

Pero un mejor ejemplo es el de la corrupción. Venezuela tiene una de
las leyes anticorrupción más estrictas y modernas en el mundo, la Ley de Salvaguarda del Patrimonio Público,
la cual fue aprobada a principio de los años ’80. A pesar de esto y del
hecho que siempre han habido enormes niveles de corrupción y que la
corrupción es rampante hoy en día, sólo una persona en la historia ha
sido encarcelada bajo esta ley y el tipo fue liberado.

En febrero de 2003, el gobierno impuso un control de cambio en
Venezuela. Los controles de cambio siempre han resultado un caso
perdido para los gobiernos venezolanos y latinoamericanos, debido a la
falta de disciplina en el gasto, así como por las múltiples
distorsiones que estos causan. Los controles de cambio pueden ser
herramientas de corto plazo, pero muy raramente han sido usado de esta
forma en Latinoamérica y ciertamente jamás en Venezuela. De hecho,
todos y cada uno de los controles de cambio impuestos en Venezuela
duraron demasiado y terminaron malamente y el actual no parece ser
diferente en lo absoluto, ya que han surgido distorsiones y, en este
momento, es por mucho el control de cambio de más larga duración en la
historia del país.

Para empezar, cuando el gobierno impuso el control de cambio en
febrero de 2003, todo lo que hizo fue limitar el acceso a las divisas
del gobierno. Mientras prohibía las operaciones con moneda extranjera,
no había ninguna legislación que efectivamente las prohibiera, por
tanto, se le prohibía, pero si usted lo hacía, no había ningún castigo.

Pero adicionalmente, los decretos no prohibían, ni podían prohibir,
ciertos tipos de transacciones, tales como la conversión de acciones de
empresas locales en sus equivalentes extranjeras, creando así lo que
era esencialmente un mecanismo para sacar el dinero o traerlo de
vuelta. Una segunda posibilidad era hacer una “permuta”, simplemente
comprando un bono del gobierno en bolívares y cambiándolo por uno en
dólares, de nuevo convirtiendo así de una moneda a la otra.

Poco después que el control de cambio fuera impuesto, el gobierno
introdujo una ley en la Asamblea Nacional en abril de 2003, para
declarar ilegales ciertas operaciones con moneda extranjera, pero
curiosamente, la ley no fue aprobada sino hasta octubre de 2005 y de
todas formas permitía las operaciones de conversión de acciones y de
permuta de bonos, al decir que los bienes valores transados en el
mercado de capitales estaban exentos de las provisiones de la ley.

Al mismo tiempo, se desarrolló un mercado paralelo legal para las
transacciones con divisas, que usaba las conversiones de acciones y las
permutas de bonos. A medida que este mercado se hizo más organizado,
los volúmenes empezaron a expandirse. Ya que el flujo neto de divisas
es hacia afuera, la presión sobre la tasa de cambio
en el mercado paralelo se hizo más intensa y el valor del dólar en este
mercado paralelo se incrementó. En ese punto, algún inteligente asesor
de Wall Street le sugirió al gobierno (¡sí, el gobierno los usa!) en
julio de 2004 que una forma de reducir esta presión sería emitir un
Bono Soberano venezolano en dólares, pero vendérselo a los
inversionistas locales en Bolívares, como una forma legal y por una
sola vez de sacar dinero a una tasa más barata que la del mercado
paralelo.

¡Y funcionó! Funcionó tan bien, que el gobierno hizo lo mismo muchas
veces, aflojando la presión sobre el mercado paralelo y manteniendo
baja esa segunda tasa de cambio. Básicamente, estas emisiones
eliminaban o “esterilizaban” liquidez monetaria, por lo que habían
menos bolívares con que comprar dólares.

Entonces fue creado por ley el Fondo de Desarrollo FONDEN, al que se
le dio parte de las reservas internacionales, con el mandato que sólo
podría gastarlas en divisas (no en bolívares). Otro pana inteligente
[del gobierno] sugirió que FONDEN podía comprar bonos a Argentina —que
no podía colocarlos directamente en los mercados internacionales— y
vendérselos a los bancos locales [en bolívares], los cuales luego
venderían los dólares [obtenidos de la venta de los bonos en el
exterior] en el mercado paralelo local. Esto logró tres cosas de una
sola vez: ayudó políticamente al gobierno argentino (¡bien por
Chávez!), permitió a FONDEN obtener bolívares sin violar la ley y,
finalmente, proporcionó dólares al mercado paralelo. De esta manera, el
gobierno estaba interviniendo directamente en el mercado paralelo para
mantener baja la tasa de cambio.

Pero había una cuarta razón para poner la cosa interesante: se
convirtió en un chanchullo en el que sólo ciertas instituciones
“amigables” y agradecidas podían obtener los bonos, con ambas partes
haciendo su agosto. Extraordinariamente, excepto por Tal Cual o aquí, usted leía bastante poco en los medios de comunicación sobre este inmenso foco de corrupción.

El gobierno vendió de esta forma unos 3,6 millardos de dólares en
bonos argentinos en el mercado paralelo y luego salió con otro esquema
usando notas estructuradas [el llamado Bono del Sur] que perseguía
prácticamente los mismos objetivos.

El problema es que 2006 era un año electoral, el gobierno se negó a
devaluar el bolívar y gastó como loco para mantener su popularidad.
Así, la liquidez monetaria creció más de 70% durante el 2006, mientras
las reservas internacionales apenas crecieron un 16%, creando una
presión extraordinaria en el mercado paralelo, el cual predije que subiría, ¡sólo para arriba!.
Mientras el dólar paralelo estaba a 2.700 Bs en agosto, dio un salto
hasta los 3.000 Bs en noviembre, 3.400 Bs en navidad y actualmente está
alrededor de los 4.100 Bs

Lo que nos trae a nuestra historia.

Luego de semanas diciendo que esto es irrelevante, la Asamblea Nacional sostuvo una audiencia
para discutir el tema. La primera cosa de la que hablaron fue del hecho
que después de aprobar la ley se les olvidó poner a alguien a cargo de
hacerla cumplir. Aparentemente no se le ha dicho a la policía que lo
haga y el SENIAT dice que no tiene las herramientas para hacerlo. De
manera que la ley es tan buena como el papel en el que está impresa,
porque nadie pensó siquiera en conectar los puntos del cumplimiento de
la ley. ¡Qué gobierno!

La segunda cosa que discutieron ayer fue el hecho que la tasa de
cambio paralela no debería estar donde está, que es todo
“especulación”, ya que CADIVI, el ente encargado del control de cambio
está dando suficientes dólares a todos los importadores. Bueno, esto
puede que sea verdad, pero para empezar no todas las importaciones
reciben dólares y justo después de la elección del 3 de diciembre,
3.500 productos fueron colocados en una lista especial, que para ser
importados se necesita presentar una certificación que demuestre que no
son producidos en Venezuela.

Pero más importante, ya hace bastante tiempo que el gobierno no les
ha dado dólares a la tasa oficial a las compañías que desean repatriar
sus ganancias, lo cual las está poniendo nerviosas a medida que el
bolívar se devalúa, ya sea en el mercado paralelo o sencillamente
porque la inflación cerró el 2006 con un incremento oficial del 17%, el más alto de Latinoamérica, y temen una o dos devaluaciones para este año.

Y eso por sí mismo crea un problema. El gobierno ha estado
promoviendo una baja artificial de las tasas de interés, con el
rendimiento de una letra del tesoro a 90 días actualmente por debajo
del 4%, menos que el rendimiento de letras del tesoro estadounidense (actualmente sobre el 5%),
mientras la inflación corre al 17%, bien por encima del IPC
estadounidense. Por ello, las tasas de ahorro en Venezuela son
profundamente negativas, lo que hace que la gente quiera… comprar
divisas.

Y de allí es de donde proviene la llamada “especulación”.

Pero ellos culparon a la “oposición” y a los “especuladores”, pero
obviamente nunca se les ocurrió culpar a las incoherentes y estúpidas
políticas económicas del gobierno. Increíblemente, continuarán con el
“espectáculo” en los próximos días, pidiéndole a un montón de gente que
vayan a la Asamblea Nacional para ser “interpelados”. Entre ellos, la
Asamblea invitará al presidente del Banco Venezolano de Crédito para
preguntarle por qué se le ocurrió ir al Tribunal Supremo de Justicia a
pedir la anulación de algunos de los artículos de la ley de ilícitos
cambiarios. De nuevo, no se les ocurrió a los ilustres diputados que el
Sr. García Mendoza, uno de los pocos hombres francos en el sector
privado, pensara que los derechos de alguien estaban siendo violados
por la ley o que la ley tenía demasiadas penas discrecionales, que es
realmente de lo que se trata esa demanda. O incluso que Mendoza tuviera
el derecho de ir al Tribunal si pensaba que algo es ilegal. De eso es
que se trata el Imperio de la Ley. Pero de todas formas los diputados
lo van a acosar.

Pero hoy la cosa se puso aun más rara cuando el nuevo presidente de
la Comisión de Finanzas de la Asamblea Nacional, así como ningún otro
que el diputado Elvis Amoroso, el mismo que propuso la primera ley de
ilícitos cambiarios, dijeron que querían investigar “de dónde” vienen
los dólares que van al mercado paralelo, como si los 3,6 millardos de
dólares en bonos argentinos, así como los 6 millardos de dólares en
bonos estructurados, hubiesen salido de la nada. De hecho, el problema
es que el gobierno no ha vendido nada desde más o menos el 10 de
diciembre pasado, lo cual ha llevado a la fuerte alza de los últimos
días y no todas las falsas razones que se les han ocurrido. Quizás
deberían investigarse ellos mismos o dejar la grandilocuencia.

La verdad es que están atrapados en uno de los corolarios de The Devil’s Excrement: la trampa del político, que definí en esta bitácora el pasado septiembre:

Pero podría ser más aptamente llamada la
Trampa del Político, porque les permite posponer decisiones importantes
para fortalecer su popularidad al corto plazo, pero de alguna manera
siempre termina explotándoles en la cara, con graves consecuencias que
siempre son pagadas primero por el pueblo, por medio de devaluaciones,
desempleo e inflación.

Y es una trampa, porque maldito si lo haces y maldito si no lo
haces. Si permiten que el bolívar se devalúe se dispara la inflación.
Si lo represan, la decisión tendrá que venir más adelante a una tasa
mucho más alta, alimentando la inflación aun más.

Y así, todos querrían que el problema desapareciera, pero no va a
desaparecer. Están atrapados por sus idiotas políticas económicas, que
violan principios básicos de economía, lo cual se puede hacer, pero no
por mucho tiempo. Esas violaciones han venido a atormentarlos y
simplemente no hay forma fácil de escaparse.

Las propuestas son las usuales. La primera es cambiar la ley o hasta
ilegalizar el mercado paralelo, lo cual disparará aun más la tasa de
cambio. La segunda es más extraña y fascista, pero tan típica de su
forma de pensar: prohíbasele a los medios publicar la tasa de cambio
paralela. Desde luego, uno puede hacer que El Nacional, El Universal o
hasta RCTV dejen de publicar la tasa de cambio paralela, ¿pero pueden
evitar que publicaciones en internet, como Veneconomía, o esta página basada en los Estados Unidos [o el Liberal Venezolano] la publiquen?

Yo lo dudo, de tal manera que la Trampa del Político tal vez debería
ser renombrada y llamada la Trampa del Tonto, pero me podría meter en
problemas con eso, bajo la ley mordaza estaría insultando la llamada
“majestad” del parlamento, o algún concepto igualmente extraño.

A picture is worth 10,000 words #25: Monetary Liquidity, Central Bank CD’s and Reserves

January 30, 2007


(Version en español aqui
)

Well, this picture is going to need some words and explanations as it is part of the difficult problem facing the authorities.

This picture is all composed of data from the Venezuelan Central Banks webpage, converted to US$ at the official exchange rate of Bs. 2,150 to the US$. The red curve represents the monetary liquidity (M2) composed of all of the bolivars in circulation, including all savings accounts, repos and CD’s at banks. The first thing to note is the rapid expansion of M2, which has gone from US$ 20 billion at the beginning of 2005 to US$ 55 billion at the end of 2006. This is an increase of 175% in two years and 69% for 2006.

This growth in the money supply is a problem for the Government. Too much money in circulation pressures inflation and, given the deeply negative interest rates (savings rates~4-6%, inflation 17%) it pressures the parallel exchange rate as people seek that market in order to protect their investment. Similarly, too much money in circulation within an exchange control system, also drives merchants to the parallel market.

Now, yesterday, I noted that the country’s debt was manageable. This is true, but the Central Bank can also go into debt independently of the Government. And it has big time! As M2 grew too much, the Venezuelan Central Bank began issuing CD’s (Certificate’s of Deposit) to local financial institutions in order to absorb part of the excess monetary liquidity or “sterilize” it in the jargon of monetary authorities. The orange curve shows the growth of these CD’s in time, they were almost non-existent in 2003 and now the stock has increased to the amazing amount of US$ 18.2 billion. Most of these CD’s are 30 days and receive an annualized rate of 10%. (Some receives only 6% but it is a small fraction).

In addition, banks have to place as reserves 30% of all their deposits, half of which gets paid interest. This is the green curve. The blue curve is what I call Abs in the graph for Absorption=CD’s+ Reserves, which currently stands at US$ 30 billion, since it represents all of the liquidity absorbed by the Government.

The problem for the authorities is that M2 has grown too much and the Central Bank cannot continue issuing CD’s at will. Why? Simple, because it may go bankrupt. You see, the Central Bank pays interest from the return it obtains from the country’s international reserves. Currently reserves are at US$ 36 billion and while it is not known how they are being invested, we know an important fraction (~25%) is in gold, which receives no interest. The remainders we are told is mostly invested in Euros, which means it get a return between 3.5-4%. If we are generous and say 4% (we could say 5% and the argument would not change), that means the Central Bank has income of about US% 1 billion from this.

But you see the problem? The Central Bank receives US$ 1 billion in interest but has to pay 10% on about US$ 18 billion, or US$ 1.8 billion plus about 10% on bank reserves which is an additional half a billion US$, for a total of US$ 2.3 billion.

And that is why the Central Bank can no longer increase its absorption operations; it is already losing too much money by issuing these CD’s. Last year, reserves were increased to 30% and the Central Bank has maintained roughly US$ 18 billion in CD’s, but it cannot issue more. The problem is that M2 keeps growing as the Government spends, spends and spends,

Why does this happen? Simple. Monetary liquidity comes from the Central Bank issuing Bolivars against the international reserves it has in US$. But some fool (the current Minister of Finance?) came up with the idea of giving part of the reserves to the Development Fund Fonden. Thus, international reserves have remained constant, while monetary liquidity has expanded dramatically in the last two years. Thus, if they had not taken the reserves from the Central Bank, it would be able to finance itself, but they have done it twice and Chavez intends to do it a third time to the tune of US$ 8.7 billion, leaving US$ 27.5 billion in reserves or less if oil stays where it is today.

Why doesn’t the Central Bank go bankrupt? Because so far they have used extremely creative accounting such as the Government paying back debts nobody remembered and allowing the Central Bank to have foreign exchange gains. But they know it cannot increase.

And that is one of the main reasons why the parallel exchange rate is under pressure. As the monetary liquidity has gone up, the absorption has remained constant and more money is in circulation looking to get out. Unfortunately, the Government does not have as many weapons to fight this, precisely because it created so much inorganic money.

Let’s see the options:

1) It can’t increase the stock of CD’s, the Central Bank would be in trouble
2) It could increase bank reserves, but that could create profit problems for some banks.
3) It could issue a dollar denominated bond to soak up liquidity. However, if a year ago a US$ 3 billion issue was 20% of the excess liquidity, today it would only be 12%. Thus, it would have to issue a US$ 6 billion bond to have an impact, which may be too large for current international markets. In any case, in a couple of months new liquidity would erase the effect.
4) It could devalue. This would devalue the country’s internal debt as well as the BCV’s CD’s making it easy to pay. It would give the Central Bank new foreign exchange gains. It would also relieve pressure in the parallel market and provide more Bolivars to the Government.
5) It could limit withdrawals in bank accounts, “Corralito” style.

Not a pretty picture, no matter how you look at it. As I have said before, you can temporarily ignore the laws of economics, but it catches up with you. It is a phenomenon intimately related to the Devils’ Excrement and its corollaries.

A bizarre (and live!) tale of indoctrination, hidden behind the infamous “misiones”

January 30, 2007

This is a really bizarre story. Mision Sucre is one of the “misiones” created by the Government, whose objective is to help those with a high school degree to have access to higher education. I have questioned this program, because the Chavez administration seems to be making the same mistake every Government in the last, at least thirty years has made, to emphasize higher education over lower levels. But that is beside the point.

Last Sunday, at Chavez’ Sunday Reality Show, they invited a girl representing “Mision Sure” Knowing how well this shows are staged, I am sure that Mari Quintero must have been one of the better and more articulate students of Mision Sucre. Right before the girl came on Chavez spoke badly of the cooperative program, his brainchild, which clearly is not going well since the President himself is saying it. And then came Mari to show to us and , hopefully, the world, how these misiones are used mainly to indoctrinate, instead of teaching them anything useful or what the programs are supposed to do. This is the exchange between Chavez and Mari, which says it all, as told in El Nacional today:

It was all Mari Quinetro’s fault. The girl, representing Mision Sucre, was part of the Sunday program Alo, Presidente, which was held the day before yesterday from Cojedes State. As proof of his relaxed relationship with the people Chavez decided to interview her to know about her specialty. The young woman indicated that her course was on processing and conservation of fishing products.

“Tell me-said Chavez-, what you have learned? How does it work with fish? How long do they last in the belly? The fish is oviparous, no? And then, tell me, what you have learned?, the head of the State asked her.

Quintero, without doubting, responded to him: “Right now they are talking to us about socio-political education, about hegemony, value added and that type of terms”�.

The President, surprised, crossed-examined her: “And about the fish, what you have learned, then”�.

And the girl said to him: “We have not begun to learn about it”.

The chief executive insisted on learning how advanced the course was.

The student told him that they began on October 15th.

Chavez wanted to know when the practical aspects would begin. With a smile of irrefutable security, Quintero indicated: “It will have to be tomorrow”.

A conversation then followed between the President and the instructor of the young person, Ubaldo Puerta. He informed the speaker that at the beginning of the courses they offer, “a socio-political education related to socialism, the social education of the individual, cooperativism”

But he entered into a contradiction with the student, because while Puerta assured him that that part lasted 15 days, Quintero said that they had been receiving three months of instruction.

Later the Minister for the Popular Economy, Pedro Morejon, took part and he tried to clarify the panorama, but Chavez was implacable. He requested the syllabus which they were following to review it later, and returned to the young girl “Okey (OK, in Spanish), now, Mary, tell me: when they finish the course, what are you going to do”.

The student indicated that they would try to form a cooperative, although previously the President had criticized that form of organization.

“Aha, and you already are visualizing some project in which you are going to work “. This only generated an even more startling answer still: “No; but as soon as we begin the practical part, we will see what the cooperative will be about”.

It was at that point that Chavez decided to leave it at that. One assumes that Mari Quintero must have immersed herself finally today, in the world of the fish farming.

A good cartoon

January 30, 2007

Somehow, I have always liked this sort of humor:


I am used to watching “Who wants to be a millionaire”, but I have never seen “It is bad to be rich”!

A picture is worth 10,000 words #24: Venezuela’s debt

January 29, 2007

This is a very plain vanilla plot, but it needs to part of the collection  for reference. Last year  external debt went down as the Government concentrated on giving Argentina a hand, rather than improving our debt profile, which could have been done. External debt is still manageable at these levels as long as oil prices hold up. Internal debt has stabilized as it has gotten more difficult for the Government to place it unless it offers some type of dollar linkage as in the new so called TICC’s. As a percentage of GDP this are reasonable levels, except that at current yields (<7%) it is not clear that there would be appetite abroad for a Venezuelan issue larger than US$ 3 billion. A devaluation would lower internal debt significantly.

What someone should tell Chavez about his Sunday rant

January 29, 2007

So, the all mighty, all-powerful, Hugo Chavez said this yesterday:

“ Where are the mayors, governors what happened? (…) It’s a fraud, a deceit. This incenses me. I request forceful action by the Office of the public prosecutor, by the Judicial Power and the Comptroller (…) the date of delivery (in Tucupita) was February of this year and they have barely advanced 28%. At that rate they never will finish and if this continues thus governors and mayors, ministers, if this followed then all we would have within years would be a cemetery of things that we began to do and they were not finished and we were so vagabond that we saw it and we allowed it. I respect much the autonomy of the municipal power but I am the head of the State (…) But there is a Constitution. If we have to begin to scrape mayors, we will begin to scrape mayors, if we have to begin to remove governors, we will begin to remove governors. Lady President of the National Assembly, I want to review the Constitution because they are positions with popular election, it is necessary to respect them, but there are causes, and they must be in the law, for their suspension, their removal or whatever. It cannot be that this is happening. This produces a lot of pain in me, it hurts the heart, it hurts my soul. More pains come to me. Motherland, socialism or death over everything”

Well Hugo, this simply shows why your Government simply does not work. First of all, you do not even understand the law. This has been happening for your eight years in power, the sugar plants don’t get finished, CVG Telecom does not work, Caracas is filthy, bridges fall down, roads are never built, Vargas State is as it was in 2000, all of this mostly because the people you choose (most of his Mayors and Governors were hand pickedby you among your fellow and loyal incompetent military officers) have never run even the military canteen.

The second thing you don’t not understand is that the only way to “scrape” a Governor or Mayor is for him/her to finish the term, be recalled by the people, at the midpoint of the term, have them die on the job or have a firm sentence of fraud against him/her. There is no other reason, much like so many other things you plan or say, just wishing it wouldn’t make it so. Thus, you might be the Head of State, but you cannot scrape other people elected to hold office. And your wishes are not the law or supposed to be the law.

Third, what you are complaining about is the consequence of throwing money at problems without having expert people look at it. Knowledge, not ignorance, is power. The shrimp farmers in Delta Amacuro were given about $300,000 to start the company, farm, infrastructure and all and they probably would not recognize a shrimp larvae even if they saw one. I find it hard to believe (And I know nothing about the subject) that you can start a shrimp farm with US$300,000. These Chavistas probably figured the same thing out and decide to just split the money and split themselves, and long live the revolution!

Finally, the Prosecutor, the Comptroller and the like have been too busy persecuting your enemies, under your orders to do that job, so that even if these Mayors and Governors had committed an illegality they have not been under your buddies’ radar since they are just trying to wipe out competent and efficient people like Leopoldo Lopez and Enrique Mendoza from the political map, so that your buddies can take their offices.

The problem at the end is that, as Alberto Barrera said, you think that when you are talking BS for six or seven hours each Sunday, you are working. You are not. You are doing politics. Work would have been understanding what these projects are or choosing the right people to run them. Work would have been removing street vendors seven years ago, one year after your first allowed them to invade all public spaces and not now. Work would have been to understand and study how cooperatives work best and not to complain yesterday that the textile coop has not started working, but the workers use the pool at the factory every day. Work would have been being aware that your own buddies running the Government were increasing their salaries by a factor of ten during the last ten years in the name of the revolution. Work would have been having a plan eight years ago and not eight years of useless experimentation and your “I thought of this yesterday”, day after day, week after week.

What do you expect Mr. Chavez? You seem to enjoy the perks of power, your fancy suits, the watches, the trips, your Airbus, which cost US$ 80 million. Well, these people at the textile factory have no productive job, they see the pool, and they use it. They like to enjoy these little perks too. It’s called human nature.

And that human nature is the one you fail to understand, people don’t want to sacrifice, they don’t want to be all equal, they want to improve their lives, they want to do better. They want the coop to make more money for them, not less. They can barely scrape up a living, let alone sharing the gains with the community. They don’t want socialism or death, you didn’t even ask them!

And yes, if there is no work and the pool is there, they also want to be able to use it. Why not?

Only Bush can save Chavez by Rafael Poleo

January 28, 2007

While I read the magazine “Zeta” every week, I tend not to like the Editorials by its Editor/owner Rafael Poleo, but I enjoyed quite a bit this week’s editorial, even if I don’t agree with everything it says and thought you might enjoy it too, so here it goes.

Only Bush can save Chavez by Rafael Poleo in Zeta.

Hugo Chavez is not the first president to whom I allow myself to give observations on his budget which in the course of the year will coincide with the facts. With my friend Jaime Lusinchi, who seeing in perspective was the best president of his generation – it is enough to remember that he lowered the national debt considerably with an oil income six times smaller than the present one-I would have a collision every year because, as I used to tell him, with my Casio pocket calculator of the size of a credit card and powered by solar energy and which was supposed to be used only to go to the supermarket, I would calculate national income and expenditures better than his Minister of Finance.

Chavez’ numbers for the year are equally false. Being a politician who is as much of a liar as a “Romana de Palo”* , it is quite possible that Chavez is a contributor to the deceit. But one also must consider that that gypsy never added up anything in his life, even his personal expenses. So that if Jaime, who as Head of the Parliamentary Caucus of the party in Government had, for several years, to review the National Budget and to handle its discussion by a Legislative Power which was both power and was legislative, was lied to by his Minister of Finance, who at least passed for a decent person, Chavez, who has no clue as to how you eat that stuff and whose Economic Cabinet is composed of a bunch of crooks from the Fourth Republic, it is much easier for them to wrap themselves around him, so that the Chiefs of the official finances can continue doing their deals, behind the President’s back. More so, if our nut ejects from his surroundings the serious and capable revolutionaries, like doctor Maza Zavala, who by the way was one of the most solid critics of public finances in the days of Lusinchi.

Hugo’s budget for 2007 dreams of an income of 52 billion dollars. Let us bypass the fact that no Latin American President has ever had so much money. Let’s reduce ourselves to the fact that the price of oil has been cut by 30% in the last six months despite the winter in the North. It does not seem likely that in this 2007 it will reach the 65 dollars per barrel that would be needed so that the income reaches the predicted level of expenses. In fact, for this year it is expected to be a little more than 50 dollars on average. That would mean about 35,000 million dollars for Venezuela – it is not easy to pinpoint it, because, that is the other problem, the Government also lies about the volume of extracted oil, exaggerating it to disguise the inefficiency into which PDVSA has fallen. In sum, he lacks about 15 billion dollars. The taxes that they steal from us are not sufficient, which is why Tax Superintendent Vielma Mora walks around like a dog with worms, looking for ways to squeeze some more out of those Venezuelans who still make an effort to produce, including modest workers. But even with that it is not enough. That is why they will increase the price of gasoline, a good that is monopolistically produced and sold by the Government.

In this matter of gasoline there is a particularity which is indicative of the ignorance which about such vital matter may be housed in the big body of the barines, a baby bull fed by the bonanza that we lived in the Fourth Republic. Chaez has ordered the “revolutionary”, that one with the little voice that manages oil, that the increase of the price of gasoline must be done without inflation. Economic experts worldwide, socialist and neoliberal, must be keeping an eye for the formula that the “revolutionary” will invent to realize such a miracle. Because the price of fuel inevitably affects that of transportation, and as everything must be transported, all costs go up and therefore prices. If Chavez’ oil manager does the miracle, we must withdraw the request for the canonization of Jose Gregorio Hernandez, which is not moving forward because his miracles have failed to materialize, and request the one of this civil servant.

Things get even worse because of the fact that the mythical budget forgets a very fat budget item. It may be that they can’t figure out what to call it. I propose to name it “Pimps of the President”. Of these, the ones with the biggest appetites are two: the skinny Kirchner and the serial assassin from Havana, the one that shits from the belly. The one from Havana does not have budgetary problems. He spends and the Venezuelans provide what is missing. It is an open faucet that runs in a single direction. The cross-eyed guy from Buenos Aires does not have it equally easy, but he defends himself blackmailing the young bull from Barinas: whenever there is a meeting of Mercosur, he raises the price of his friendship. Any day now, we need to send him 2 billion dollars, payable with the increase of the price of gasoline. And a bigger one is coming soon, because the Supreme Court decided that those Argentineans whose dollars were taken away from, when the “Corralito” took place, will have their money returned. In my opinion, I don’t know if if in yours, that decision was agreed on between the Justices and Kirchner. The court ruled in favor of the Argentine account holders, knowing full well that in Caracas there is a pitcher that will deliver. Argentine citizens will receive 5 billion dollars that will reactivate the economy of that country, while here the rough times go on an on and we will borrow abroad because, as we have seen, oil is no longer esufficient. What balls!

I have always said “In Venezuela there are no good nor bad governments, but good or bad prices of oil”. Chavez shattered this axiom. His case proves that there can be a bad Government with good prices of oil. But some people are born with luck. His enemies always save Chavez. Carmona saved him once, another time somebody in the Coordinadora who for now I am not going to name did it, and more recently the triad Petkoff-Rosales-Borges. This year the man that can save him is Bush, invading Iran. We can’t foresee any other way for oil prices to increase to the level of what is needed for the big spender that we have here. So that you see that in matters of politics things are not what they seem. Hugo Rafael and his court of pimps must be praying so that the cowboy from Washington moves forward to sweep out the Iranian that they publicly endorse. Because in this life each of us takes care only of its own.

* The llaneros of my generation, who did not go around in “cuadratrak” but on mules, got to know the Romanas (balances invented in ancient Rome) constructed from wood (palo) which we used to weigh the cattle. Of course, those devices, which were homemade, were not very exact. They lied. From which that archaic expression comes, “A bigger liar than a Romana e’palo”, used by this old reporter to describe the behavior of politicians like Hugo Rafael.

Robolutionary Farce: Governement expropriates with one hand to give buddies concessions with the other

January 28, 2007

This weekend I was going to write about the expropriation of the “Aeropuerto Caracas” by the Governor of Miranda State, in order to promote “popular tourism”, according to the decision by the Legislative Assembly of that State. This decision is a surprise. Other than to exert control over people, there can’t be any justification for it, more so, when Miranda State has two other airports that belong to the State and that have been supposedly part of plans to expand them and increase their importance in the last two years. In fact, the Governor of Miranda State even appeared in Chavez’ program Alo Presidente early in 2006 to talk about this grandiose plan.

Aeropuerto Caracas is a concession to an association and both commercial and private flights use it daily. It no longer has international flights because they were prohibited by this Government two years ago, when the Caracas airport was closed to airplane traffic (a decision which is violated daily, when at least a dozen Government planes take off and land in the La Carlota airport of Caracas).Aeropuerto Caracas also includes hangars in private land around it and it is as yet unclear if this is part or not of the nationalization. It is run well, maintained well and run efficiently and Government airplanes pay no fees for its use.

If I was surprised by this decision, today I am amazed by it, as I learn that in a contigous State, exactly the opposite is being done. Indeed, Governor Acosta Carles has given the concession of the Puerto Cabello International Airport for 50 years, under terms that can only be called extremely sweet, as the company getting the concession will not have to pay anything to the Government for the first 11 years.

As if this were not enough, the person signing the contract in representation of the company happens to be General Victor Cruz Weffer, a Chavez buddy and supposedly a revolutionary, whose tenure as Head of the Bolivar 2,000 program was marked by irregularities, scandal and corruption, but nothing ever came of it.

Thus, it is clear that this revolution is a farce: While the Government expropriates, nationalizes and takes over majority of companies, land, airports, joint ventures and the like from their rightful or contractual owners, it does exactly the opposite to its friends and supporters, giving new meaning to the terms bolibourgeois and robolution.

A bit of everything

January 28, 2007

This pretty little thing above left is a recent acquisition Lc. Tokyo Magix x Slc. Tangerine. I acquired this two months ago and it’s supposed to be two years from flowering, but it surprised me with three flowers. The flowers are tiny and so is the plant, on the right I took a picture (a terrible one!) of the plant and next to it I placed a brand new #2 pencil so that people can get an inea of the size of the plant and flowers.

Above left is a Cattleya Jenmanii Coerulea, which is flowring for the second time. I was not impressed the first tome, but this time I know I have a great one, the flower in the middle is not as good but the other two are fantastic. On teh right a Cattleya Gaskellaina.

On the left is a Brassia Datacosta, the flowers are almost half a meter in size from top to bottom. On the right, a huge Gaskelliana is in flower in the orchid room, but I was afraid to move it by myself so I took the picture “in situ”

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