(In Spanish here)
Nero Buo is a street vendor in Sabana Grande. Nero sells anything and everything, has been around for ages, sleeping in his make-shift tent, which can easily be moved should the police decide to go after him, like they do periodically whenever there are elections or the Mayor feels like it.Nero used to be pro-Chavez, but that lasted barely two years.
Last week, Nero was standing here when lo and behold, who should show up but none other than Oligarco Burguesito, his old friend turned Boli-arbitrageour, ever since Oli, like he likes to call him, discovered CADIVI and Government bonds, and began his long road to riches thanks to the revolution. Nero hasn’t seen Oli much lately, but every time Oli shows up, he would buy something in order to help out Nero in his business.
Except today Oli is sad, you can see it in his face, something is wrong, Nero can feel it, so he asks “Oli, what is wrong, you look terrible? Are you ill?.
To which Oli responds “No, Nero, my whole world has come crashing down, the owner of the broker/travel agency I used to work with, fired me yesterday, told me no more business, because Chavez forbid the swaps we had been doing for seven years and the worst part Nero, is that I don’t even know what a swap is, all I did is find clients for my boss and he would take it from there and pay me good money, and now, I am out of the job, nothing, back to the good old days, when Caldera was in power”
Nero says: “I know what has been happening, it’s actually rather simple, a swap is just a fancy name for what we street vendors do all the time when we don’t have cash, which is most of the time. Suppose you have Harina Pan and I have sugar, instead of selling you one or the other, we agree on a price to exchange the Harina for the sugar and done deal. Except that in the currency swaps, it was a legal way of exchanging Bolivars for Dollars and vice versa, because the Government did not allow Bs to be exchanged for dollars, you would buy, say, Harina Pan, and I would buy sugar and we would swap it, which was legal, because the law only forbid trading money”
Nero, you know so much, how do you do it? I work in the business and I didn’t have a clear picture of what I was doing and here you are understanding every bit of it. So, what happened recently, why is Chavez so pissed that I got fired?
Well, Oli, said Nero, you know how when there is no sugar, it goes up in price? Well, in that case, if we used to swap two packs of Harina Pan for one of sugar, I may have to ask you for three of Harina Pan for each one of sugar. The same thing happened in your business, Chavez spent the dollars on planes, Cuba and all those silly things when he had lots of dollars, but now oil went down, there are fewer dollars and lots of Bolivars, so those that have Bs. want more dollars, and the rate rose a lot, to almost double what Chavez said it would go down to and Chavez got mad and needed someone to blame for the whole deal. Rather than blame the old guy with the three Ferraris, he decided to blame the brokers like your boss.
But Nero, Chavez says this was illegal, but we have been doing it for seven years, day after day and nobody said anything! What changed? It was all very public, everyone was doing it and the Government and the authorities never said anything
Nothing changed Oli, replied Nero, for Chavez it was very convenient to have this market, even some of his buddies made money off it, PDVSA got more Bolivars for each dollar and this market, in the end, was better run than CADIVI, the money went to those that needed it and not those that paid a bribe or were favored by some Chavista Colonel. But Chavez was sure the rate it would go down and instead it went up, and you know Hugo, he thinks he can turn the laws of gravity off if necessary.
Well Nero, I am really confused-said Oli, Chavez said that selling bonds in Bolivars for three times its value in dollars was illegal and these brokers should be sent to jail because this was a rip-off, but that is exactly what Chavez would to to us, they would sell us a bond in dollars for Bs. for three times it’s value when you turned around to sell it in US$, what’s the difference?
Oh, Oli, you are so naive! Chavez is the Government, you are not. Chavez can rip you off with a smile and a TV program all the time, but you can only do the same if he authorizes you to do it and even if he does, he may change his mind someday. That is what happened, he got tired of you guys. So, now he is looking for scapegoats, jailing people and going after the brokers.
But I don’t understand said Oli, why blame us? We were not buying and selling the dollars, as my boss says we were intermediating them, why doesn’t Chavez go after the buyers of the dollars, they were the ones then that were violating the law. Or why not go after the people in Government selling the dollars? They were also violating the law.
Oli, Oli, Oli, don’t you understand, that’s too many people, thousands of them. By going after you, the brokers, he singles out one group, mostly rich ones, rather than an ill-defined mass of multiple buyers and sellers. In any case, you don’t want to make the buyers mad, they are the ones that import stuff, they could create shortages if you scared them away.
I guess, said Oli. Well, I am out of a job now, maybe I will go to Mercal pick up some packages of Harina pan cheap and start swapping them with you. I have got to make a living.
You do that Oli, said Nero, just don’t get greedy, don’t grab more than a dozen packages or so, there is a shortage, the price may go up too much and then Chavez may blame us for it and go after us.
As Oli went away, Nero wondered why it was Oli that got so rich in the last few years and not him, clearly he understood this stuff better than Oli. Well, in any case he did not think the new market being set up by the Government would work, so he would sit and wait for it to collapse and maybe then he would go talk to Oli’s boss, not to Oli, and take advantage of the next parallel market. At least he could advise the guy not to abuse the syste too much m, that’s how street vendors survive…