Waiting For Venezuela To Bottom

September 8, 2013

bottomless_pit

Many people seem to think that Venezuela is or may be close to some sort of economic bottom. That the current economic situation is unsustainable. That things are about to crack up somehow due to the economy. Collapse, explode or implotion.

Well, think again..

Countries are like the shares of a bad company. they keep going down and down, and too many people think it can’t go lower and they buy more, but it continues to go down.

I think Venezuela is the same. Things continue to deteriorate, shortages, blackouts, inflation, crisis after crisis and conflicts, crime and constant devaluation.

Guess what? That is the story of the last fourteen years, but the bottom may be far into the future.

First of all, think Zimbabwe. If country’s economic crisis hit a bottom and political change would follow, then Mugabe would have been a goner long ago. Instead, there is Robert Gabriel Mugabe, plodding along, year after year. In the middle, the country has seen a variety of things, from hyperinflation, to sanctions, to austerity, with plenty of elections all the time. And Mugabe is still “it”, leading and ruling the country, like Chavismo owns ours. Except Chavez died.

But Mugabe does not have the pipeline of dollars that Chavismo has, nor the leeway to adjust and change in order to plod along along longer. In fact, I suspect that Mugabe has more smarts to adapt and change politically and that is about it.

Think about it, Chavismo has the barrel of oil at US$ 107, give or take some cents, almost as high as it has ever been. It also has a gazillion barrels of oil (and gas, and gold, and iron) underground that it can lease, lend, promise and/or mortgage, in order to achieve its means.

Yes, thing are not well, but an adjustment here, an adjustment there, and quicker that you can say devaluation or default, for that matter, things could improve rather quickly.

And they have. Really. Things are worse now in terms of dollar availability, for example, but at 21% scarcity levels, we are far from the 49% levels of 2007, or the electricity rationing of the 2010 crisis. Think about it.

And oil is as high as it has been in the last five years for example. That means that even if the parallel funds have less in them, they probably have at least US$ 16 billion to muddle through until things get very tight. And if PDVSA needs money, the Central Bank can increase lending to it, by 50%, rather than 28% like in the last year. Crazy? Yes. Inflationary? Yes. But when you have no scruples, the show must go on! As long as you can keep it going.

You are worried that there is a shortage of dollars? Well, let me remind you this is a revolution. And the reality is, that there is a shortage of foreign currency for the private sector which imported US$ 38.7 billion in 2007, but only received US$ 26 billion last year. That is a 32.8% drop. But guess what? The Government in the meantime, has gone from importing “only” US$ 19.7 billion in 2007 to importing US$ 34.3 billion in 2012, that is “only” a  74% increase.

So, you “feel” the lack of foreign currency, because you get essentially 33% less, but the Government has almost doubled what it imports and the Central Bank said those imports went up 25% in the first half of 2103. Yes, their imports are inefficient, overpriced, full of graft and the like, but they have the money, you don’t. Feels bad, but is reality…

This is, after all, a revolution…Remember?

And lest you think that they don’t know they are in trouble, let me tell you three stories:

-Financing for Petrocaribe has almost ground to a halt this year. Yes, according to Central Bank numbers, last year financing to oil exports to Petrocaribe grew by US$ 7 billion. This year? A small increase of about US$ 300 million, according to the Venezuelan Central Bank. That means more money from oil for the Government, more foreign currency for other things.

-Many importers have received in June and July more new foreign currency from Cadivi than what they had received in the last twelve months.  Where is the money coming from? I don’t know. It may be coming from lower Government imports, or it may be coming from funds that used to go to shell companies that never imported anything under the “old” Cadivi management.

-The Government had to import gasoline with the Amuay fire, by now, most repairs have been completed. That means more dollars for PDVSA, as imports of gasoline go down.

And there are more economic tools that could be used. Devaluation, for example. Increase the price of gas from free to free by 200% or 300% higher. Sell dollars at a much higher rate for Sicad. Or if push comes to shove, no dollars, really critical, do you really think these guys are incapable of default? Think again.

But that is far in the future, we are not even close to that.

For now, if you are waiting for Venezuela’s bottom, look again. It’s not close. Going back to my stock analogy, buy Facebook shares ($FB). That one did hit the bottom. And it is going up…

Because about the only thing that Venezuela has hit bottom yet, is on the leadership. Maduro is really near bottom, he is no Chavez, but oil and oil prices and some reasonable decisions could keep him there for a long time, let’s say, all of his six years.

Countries do not reach economic bottoms, only political ones. And that is what the opposition has to work on. The opposition will likely get more votes in December than Chavismo. But Chavismo is likely to get more Mayors than the opposition.

And that, my friend, would not be a sign of a bottom. Chavismo would sell it, through the State controlled media, as a huge victory. And it would be.

So, if you are waiting for Venezuela’s bottom, this is likely not it.

It is after all called the Devil’s Excrement. A true curse. More than you could have ever imagined.

56 Responses to “Waiting For Venezuela To Bottom”

  1. Tom ODonnell Says:

    Yes, .. so it seems. It is bad, but there are respites (several of which you mention).

    As far as oil goes, they are getting loans from IOCs and NOCs to raise production, although much of the new production will go to pay the loans (i.e., for the present) … but there are yet more mechanisms in the works to attract investments and to get the domestic private sector supplying goods and services which also decreases the call on dollars for imports, etc.

    In oil, boosting mature field production using investments (for which various mechanisms are being designed to provide guarantees of repayment, and confidence building) is a reasonable strategy.

    And, the key thing is that the state / Pdvsa now knows in no uncertain terms that they have to make changes. With Chavez gone, that sort of adaptation is now possible.

    But the people are suffering and weary of the present crisis and chavismo has serious political weaknesses as the last election demonstrates ..

  2. TV Says:

    I agree with Miguel, as long as the oil price is where it is, Chavizmo will keep in power. If, however, oil price was to drop suddenly by 20% or so, they would be forced to do some deep spending cuts. I doubt they would be able to reduce their kickbacks, so a counterrevolution would be a plausible result.


  3. Maybe it’s the different perceptions, of their false revolutions, that the populaces of Zimbabwe and Venezuela have that determines which one lasts and which one dissolves into chaos.

    Mugabe flourishes because he can still get away with reminding his people of the terrible repression that they suffered through under the white Rhodesian state. Such disgusting social engineering memories can propel a political movement for a long time.

    But pyramid schemes, based on economics, are always fragile and the memories citizens have of them, change, depending on the conditions at any given time.

    • duncan Says:

      “Mugabe flourishes because he can still get away with reminding his people of the terrible repression that they suffered through under the white Rhodesian state.”

      Is that not the same blame culture that Chavez and Maduro have used? “El Imperio” has been to blame for recent apagones, shortages, cancer and everything that is wrong with the country.

      Of course, niether Chavez nor Maduro can directly blame the Spanish colonialists, becuase as Simon Bolivar said, “Quien somos nosotros?” – which equates to a major headache for the left-wing in South America.

      If Mugabe was necessary to balance the repression suffered under British rule, then Chavez was necessary to give a voice to the poor of Venezuela. Unfortunately, Mugabe never let the people have a chance to vote him out, and the Venezuelans missed every opportunity before it became too late; probably due to disgusting social engineering.

  4. Kepler Says:

    Miguel,
    Lo que a mí más me preocupa es la manera en que están lavando el cerebro a los más jóvenes (léase los que tienen menos de 30 años). Sería interesante realizar un estudio de preferencia política para los más jóvenes…quizás uno pueda dilucidar algo usando Bayes y comparando los resultados de las elecciones del 2010, del 2012 y las que se avecinan.

    As you say, we need to do political work. Few power shifts have taken place without the economic circumstances being right but we cannot do much on that front. What we can do is on the educational-political field. But: are people up to the job? They need a plan to counter Chavismo. I don’t think it is the way María Corina is doing it. Sorry, you can be blunt, but she was working in Paraguana on a plump way. We need to focus on the alternatives, on portraying what the future will look like, how Venezuela is isolating itself and how Chavistas do not want to show the Fonden money…stuff like that.
    It won’t be with statements such as “lo peor está por venir”.

  5. Manuel Scettri Says:

    I completely agree 100%…if we look at countries like Zimbabwe or Somalia there is still a long way to go to get to the bottom! Even if oil prices drop 20% I dont think that would make any sort of difference as at that point what would likely happen is that even less money would be given to non government spending, and the money that does go to the government less and less of it would be spent on any sort of public projects.

    There are still beautiful buildings, houses, restaurants, country clubs, and more or less things function so theres still phone service, electricity, water etc. Those services work badly yes, but they exist unlike in places like Somalia.

    So the bottom is still a looong ways down…

    • TV Says:

      If the oil prices drop 20% expect >100% of the resulting austerity to fall on the ordinary citizens. That could unseat Chavizmo. There are few other prospects in the near future.

  6. captainccs Says:

    I’ve been waiting for Venezuela to bottom since Luis Herrera Campins (1979-1984) had a shower installed in a VIASA plane for his traveling pleasure and since he raided the PDVSA treasury to pay for the disaster he was leading.

    It’s been down the hole ever since, each presidency worse than the one it replaced. Often I said that it can’t get any worse but we have very clever destructors leading the country to ruin.

    If we dig deep enough we’ll come out on the other side, just south east of the Seychelles in the Indian Ocean, the place where they filmed that wonderful erotic movie Goodbye Emmanuelle (Sylvia Kristel).

    • Lario Says:

      Captain, the airplane shower… what Viasa aircraft? The fleet during LHC consisted of around five DC-8’s and around five DC-10-30s. The got rid of DC-8s during this time and added two DC-9s in 1983. Hard to imagine one of these birds retrofitted with a shower.

      Maybe they put the shower in the “Camastron” presidential Boeing 737-200?

      The Seychelles? Paraiso fiscal de Cristina Kirchner! This is where she parks her dirty money much of it proceeds from Venezuela:

      • captainccs Says:

        I believe it was a DC-10 but the details don’t matter. What matters is that the Venezuelan debacle did not start with Chavez. Chavez was the effect of at least 20 years of previous corruption and mismanagement by Adecos and Copeyanos. Socialism is CRAP be it Christian Socialism (COPEY) or Democratic Socialism (AD) or Marxist Socialism (Chavismo). Ask Miguel why he quit his cushy government job. It’s one of the few ways to get him to admit that AD/COPEY turned to CRAP pure and simple.

        By no means am I defending Chavez or Maduro but the story should be told as it really is: Venezuelan DemoDesgracia was a total failure that engendered Chavismo. Drunks, demagogs and other riffraff inhabited Miraflores and separation of powers to keep them in check was dispensed with. In his second period CAP was given dictatorial powers by the Congress.

        Just about everything Chavismo has done has antecedents in the previous 20 years of DemoDisgrace.

        I don’t know about you guys but I lived through it.

  7. Humberto Says:

    Miguel, your outlook is depressing… but probably accurate.

  8. captainccs Says:

    >>>Guess what? That is the story of the last fourteen years, but the bottom may be far into the future.<<<

    Not fourteen (14), thirty-four (34).

  9. extorres Says:

    ” It also has a gazillion barrels of oil (and gas, and gold, and iron) underground that it can lease, lend, promise and/or mortgage, in order to achieve its means.”

    Must destroy Ring of Power… For the bulk, or at least the leaders, of the opposition to reach this conclusion is for what I keep waiting. We need the political platform to become the promise of guaranteed, unconditional income.

    • Lario Says:

      lets not forget Snow White (cocaine). She’s a big player in all of this. Miguel is correct, abundant natural resources and strategic location should keep this authoritarian regime lubed and fueled for the long run. Lessons from history: authoritarian regimes fail when they run out of money. Money to grease the wheels of power. To make matters worse, this regime’s advisors are the world’s best at maintaining authoritarian regimes on shoestring budgets (the Cubans). When Miguel says there is no bottom this means they are going to stay in power for the long term. As Kepler mentioned, a future concern will be this brainwashed generation. Ideological radicalization of the youth particulary among the military cannot mean good things for the future. Venezuela has a looooong ways to go before it reaches the levels of other oppresive regimes. The Bolivarians have a lot of tools in their toolbox and nobody is coming to the rescue. The gringos will not go in there because Venezuelans are getting killed. Gringo intervention will only come if the country descends into civil strife and war. At this point, the geopolitical interests of the US and its allies come into play.

      • extorres Says:

        Lario, right you are. Foreigners can only justify intervention if the national authorities commit blatant atrocities, even then with reluctance. Nationals can only justify use of force if their force is of a less degree than that of the oppressing authorities, otherwise they risk becoming the bad guys. That leaves a single way out of a rich, non atrocious regime: citizens uniting and turning over the regime’s supporters.

        Unfortunately, the opposition in Venezuela has offered little by way of platform that can compete with the regime’s promises as far as turning over the regime’s supporters. In fact, all the platform suggestions that I’ve heard, except one, can be equaled or beat by a rich, unscrupulous regime.

        The irony is the educated people’s lack of willingness to accept the outcome of educated analysis: we need a platform with the highest chance of winning, and one that the regime cannot outpromise. I keep hearing comparisons regarding which platforms would perform better once in power, but their supporters keep sidestepping their probability of *reaching* power or of how easily the regime could *counter* them.

        Only one meets both criteria: guaranteed, unconditional income. Not only does it have a high probability of winning over votes,the regime cannot outpromise it. Even if the election is lost, its message is viral and will over time eat away at the foundations of the regime; people sooner or later will realize that they would rather have the natural resource monies in their hands than in anyone else’s.

        We need to go there, or lose Venezuela for our lifetimes, because, so long as there is money entering at the top, the pit can always get deeper for those at the bottom.

  10. Douglas Says:

    It’s sad to say that you are probably right Miguel. When I hear the situation from my Wife’s relatives back home I just ask: “When are people going to get fed up?”. On the other hand we have the precedent of 1989 which almost nobody saw coming. Most of us thought there was plenty of time to ‘fix’ a bad situation and out of nowhere it came. The political bottom is hard to predict but probably will come long before any kind of economic bottom.

  11. Noel Says:

    Without going as far as Africa, one can look at Argentina which has been declining now for decades.

    Of course, if Brazil were to elect a new center-left president in the mold of F. H. Cardoso and if Argentina were to likewise elect a more orthodox president, things might change in Venezuela for the better.

    • Lario Says:

      respectfully disagree. What goes on in Venezuela stays in Venezuela. What goes on in Brasil and Argentina, have nothing to do with Venezula. Friends come and go.

  12. Jaime J. Says:

    Long ago Cubans thought that their country couldn’t fall any lower, but the Castros are still there after 54 years! Can they ruin the country even more? Yes they can! That is what a revolution does for you.

    Why should Venezuela be any different? I agree with Miguel.

    Ya lo decia Bolivar: “el que sirve una revolución ara en el mar”.

    • marzolian Says:

      Jaime, I’m only surprised that it took this long for someone to say this. Why isn’t it obvious? The Cubans are giving lessons! But the main point of the article, unfortunately, is correct. It might end soon, but it could continue to get worse for a long, long time.

      • Lario Says:

        Lessons in what? Cuba tanked after Soviet subsidies stopped and it wasn’t until Chavez that things got better. Things in Cuba today are much better and getting better thanks to Obama. Today the USA feeds, clothes and medicates Cuba. Venezuela provides the other half. Are things getting worse in Cuba? I talk to Cubans every day and the answer is they are getting better. “Better” has a different meaning to Cubans.

      • Lario Says:

        The only lessons the Cubans are giving is how to be a two-faced carved-in-stone hypocrite.

  13. sapitosetty Says:

    Miguel, I went over to EIA to check on your line about the Amuay repairs meaning government will have more USD available. You’re right, but it’s still not all that rosy. My post on it is at http://settysoutham.wordpress.com/2013/09/09/i-spoke-to-soon-us-venezuela-fuel-trade-if-you-must-know. Basic conclusion: Gasoline sales US-to-Venezuela are down, but high-sulfur fuel oil is up, now at 28,000 bbl/day, so there is still an unnecessary hemorrhage of cash from Venezuela to the imperio. (It’s possible that some of that fuel is from Citgo, in which case the loss is just opportunity cost as Citgo can’t sell the fuel elsewhere. Who knows.)

    • moctavio Says:

      I read it, it is not happening yet, but should star sometime soon. I am told Amuay is still at 70% but they think within a couple of months it should be above 90%.

  14. Gordo Says:

    There is an important question to answer. Has Chavismo learned anything from the losses caused by nationalizing domestic producers? It seems that they may be listening more to farmers about their needs, factories about needing to import parts, etc. If this is so, should there be a political climate change vis-a-vis repealing personal property rights?

    • moctavio Says:

      I think Maduro may be holding off nationalziing things because he is not strong politically, but I dont see a change in that. I think they will continue expropriating land where they want to, for example.

    • Lario Says:

      Taking from those who have is their MO. Did you see the Bolivian anti-corruption czar (reports directly to Evo) was arrested last week by the FBI in Miami for trying to shake down the owner of Bolivian airline Aerosur. This is what they do, steal from those who have and borrow without giving back

    • Lario Says:

      A little off topic but a timely history lesson: The reason the US maintains its economic embargo on Cuba is because the Castro bros. stole U.S. assets worth mucho mucho dinero in today’s dollars. People forget why the US embargoed and villify the US while not knowing diddly shit about the truth and why things are the way they are.

    • Gordo Says:

      Looking at the economic landscape and how things are quickly deteriorating, and looking at how the government has managed to endure over the last 12-14 years seem to be pointing to opposite conclusions about the stability of the current political establishment and its policies.

      Once conclusion, as I understand it, is that those policies, however damaging, can continue for a long time, possibly for decades.

      The other conclusion looks at such things as inflation, and how it affects the purchasing power of low wage earners, ie. those who should be the primary benefactors of the Chavez legacy. As I understand it, food is becoming expensive, scarce, long waits in long lines, and a second person to find out if there is anything on the shelves worth waiting for.

      Then, one has to wonder how long the regime can continue to bully and blame the opposition, especially a defeated opposition in a totalitarian state!

      • captainccs Says:

        >>>As I understand it, food is becoming expensive, scarce, long waits in long lines, and a second person to find out if there is anything on the shelves worth waiting for.<<<

        Expensive and scare, yes, but the modern supermarket was changed the waiting game. You can quickly wander through the isles in search of the elusive items like price controlled rice or powdered milk (took a powder long ago). There are long queues at the checkout counters only when stuff is available.

        A neighbor who shops at an upscale supermarket made the comment this weekend that the place was now "full of low class buyers" giving as the reasons that prices are lower than in the barrios and availability of many good non-existent in the barrios. Recently I compared prices of packaged goods and my local abasto (grocery store) was 30% more expensive in some items than at the supermarket. The neighbor I mentioned above said chicken was half the price at his upscale supermarket.

        The "second person" is used when you want to buy rationed items. If they only allow two packages of rice per person you bring in the second person to get the extra two packages through the checkout counter.

        To give an example of the absurdity of prices, a year's supply of 100mg Bayer aspirin costs US$0.97 and a year's supply of beta blocker (for the heart) costs US$3.28. But gout medicine (Aluron) and diabetes medicine (Glucofage), which are regulated to similar levels, are not available. When they are you buy as many as you can, maybe a 6 month supply. If you can't find the "second person" you go from one drugstore to the next until you build up the desired supply. Oh the joys of Socialism!

        • Ira Says:

          My wife’s family (the Chavista part of the family) sent my 12-year-old grand niece to look for rice a few weeks ago. They gave her money, and off she went.

          She returned an hour or two later after visiting several stores, and excitedly showed everyone the success of her labors–5 pounds of FLOUR.

          There was yelling, condemnation, degradation–all because a 12-year-old girl mistakenly found and bought flour instead of rice.

          Well, to me, this can be called societal rock bottom. The year is 2013, and you have to visit store after store just to find flour and rice? Are you KIDDING me?


  15. I think what is different in Vzla from the other countries mentioned are the boom/bust cycles and the social de-stabilizing implications of these fluctuations. People get used to the mango bajito, and when oil revenue dries up el soberano se arrecha. So bottoming out will only come when and if the barrel price tanks.

    • moctavio Says:

      Well, not many arrecheras in our past, given the history, no?

      • Kepler Says:

        Well: between 2000 and 2001 there was a drop of 15% in oil price.
        Venezuelans were mad at Chávez.
        From 2008 to 2009 there was a higher relative drop but levels were
        such that there was still a cushion: at 2000 levels, the government could
        hardly pay salaries. But this level is always getting higher.
        How high it is is hard to say and how long the government can keep
        its breath is also unknown.

  16. Ira Says:

    It’s the unexpected that can kill you:

    Some more major rains/floods/landslides or an earthquake can make an economy like VZ’s hit “real” rock bottom real fast, without the proper policies and institutions in place (ie government) to recover.

    But I kind of disagree with many’s definition of what “rock bottom” really means:

    Can anyone actually claim that Cuba didn’t hit rock bottom way PRIOR to the departure of Soviet aid? And in fact, even right in the midst of the MOST aid?

    Yeah, things can always get worse, but I really don’t think that the mindset of “Things could be worse” elevates your situation in the real world–only in your mind.

    No, VZ has definitely hit rock bottom–because it’s not just about the price of oil and the numbers on the balance sheet. It’s about the morality in the Assembly, the Courts, the situation on the streets, and mentality of its people.

    VZ has hit rock bottom, whether people want to see it or not.

    • Ira Says:

      I’ve been reading up on this all morning, and they’re still not giving specific reasons for pulling out of the deal–although I think the reasons are obvious:

      PDVSA just lost their Conoco case at the International Center for Settlement of Investment Disputes, and it looks like VZ is going to ignore the ruling and not pay when the final numbers are hammered out in a year or two.

      So who wants to do business with this kind of government? (Conoco was suing for US $30 BILLION.)

      And just as importantly, these days, the size of a country’s oil reserves isn’t as important as it used to be. Today’s technology is able to pull oil from almost ANYWHERE on earth, and the oil companies are going to go where they have a guarantee on their investment, let alone the best return.

      In VZ? No way.

      The five minority holders in Petrocaribobo held a 40% interest, with Petronas holding just over 10% of that 40%, which means they would have a total of less than 5% of the entire project. (Or is it less than 4%? 3%? I don’t understand this kind of math.) With of course, PDVSA holding 60% of everything.

      Except PDVSA can’t do it by themselves in the first place, and Petronas will look to friendlier, GUARANTEED skies for their investment.

      Why do these socialists think they can offer nothing, and expect the world to knock a path to their door?

      PDVSA needs Petronas–Petronas doesn’t need them.


  17. […] Octavio is not exactly Waiting For Venezuela To Bottom Because about the only thing that Venezuela has hit bottom yet, is on the leadership. Maduro is […]

  18. ChrisM Says:

    Being in Venezuela is like being in an abusive relationship that only becomes completely clear when there is time and distance. While in it, it only takes a few good times to keep a person from seeing it for what it is and leaving. Chavismo pays a couple of bills, and the opposition says everything’s going to be different this time, Venezuela can change! And so, despite the danger and abuses, my family stays….

  19. xp Says:

    Boy Who Cried Wolf is one of Aesop’s Fables,
    “to cry wolf”, meaning to give a false alarm.

    “The sky is falling!” has passed to indicating a hysterical or mistaken belief that disaster is imminent.
    Versions of the story go back more than 25 centuries and it continues to be referenced in a variety of media.

    And yet …
    a clock will show the correct time at least twice a day.

    Prophets of disasters, like myself,
    have often magnified such scenarios,
    and have always been proven wrong.
    I publicly acknowledge my complete lack of tact,
    regret having given my imagination free reign,
    and quietly silence the Ranter in me.
    Cheers

    • xp Says:

      However,
      structural imbalances do exist
      and like the berlin wall
      have been solidly cemented into
      the fabric of our society.

    • Gordo Says:

      Talking about fables, there is this myth of King Midas whose touch turned things to gold and it became a tragedy, while a touch of Cavismo turns everything to mierda… and doesn’t end up a tragedy? I’m betting on the bottom coming sooner rather than later!

  20. Morpheous Says:

    Hey!… Check this out.

    http://www.reuters.com/article/2013/09/10/us-oil-venezuela-malaysia-idUSBRE9880TU20130910

    “(Reuters) – Malaysian oil company Petronas said it is exiting one of the biggest petroleum projects in Venezuela’s Orinoco belt, after what sources close to the venture and within the firm said were disagreements with Venezuelan authorities and state-run PDVSA.”

  21. xp Says:

    Harvest Natural announces negotiations to sell company, spin-off of assets
    Harvest Natural Resources announced it has entered into exclusive negotiations with Pluspetrol Venezuela S.A., an entity belonging to one of the leading exploration and production companies in Latin America, to sell the outstanding shares of Harvest.

    Nice 30% premarket pop on the HNR shares.
    Took some money off the table.

  22. Kepler Says:

    OT: the page of the Nazional Assembly has been down since yesterday, at least every time I have checked it out. Or am I wrong? Can you visit it?

  23. Gordo Says:

    There are lots of ominous signs today: The parallel market has been moving the last several days! El Universal’s top story is “Shortage likely to escalate in Venezuela amid drought of US dollars.”

    But most ominous of all, my wife told me this morning that we need to do something with our Bolivares! This is the first time she said this.

  24. VJ Says:

    OMG…!!!!!!! Nick forgot to include Merentes, Ramirez and Eudomar

    Maduro dirigirá el Órgano Superior de la Economía para enfrentar la “guerra económica” y garantizar el abastecimiento.
    “Yo he decidido crear una instancia superior de coordinación, de inspección, de contraloría y de garantía de funcionamiento total de la economía”.
    Agregó que el órgano arriba mencionado va a tener “un Estado mayor, una Dirección Superior”, donde van a estar los ministros que tienen que ver con la actividad económica, entre ellos, el titular del Ministerio de Comercio, Alejandro Fleming; Alimentación, Félix Osorio; Agricultura y Tierras, Yván Gil; Comunas, Reinaldo Iturriza; Mujer e Igualdad de Género, Andreína Tarazón; Juventud, Héctor Rodríguez; Transporte Terrestre, Haiman El Troudi; y Transporte Acuático, Heberth García.

    http://www.noticias24.com/venezuela/noticia/193272/instalaran-un-organo-superior-de-la-economia-para-asegurar-el-abastecimiento-y/

  25. bill bass Says:

    Radical political change is always a game of chance , it doesnt just happen once economic conditions become near intolerable but no doubt a patronage pork barrel based system of government does depend on having enough funds to keep most people at some level of comfort , absent those funds , the system will start creaking and shuddering and the odds of a breakdown will became higher . the status quo always seems poised to go on forever and then all of a sudden those imbalances which have gone on for ages with a little push from some small event bring the whole thing tumbling down. lets not despair !!

  26. pucha Says:

    “We dance round in a ring and suppose, While the secret sits in the middle and knows” Robert Frost

    It is my best estimate that we are looking at complexity square in the face.
    From a systems viewpoint a system (please excuse redundance) can be complicated – its “inputs/component relationships/results” can be very intricate, but treatable provided we have enough processing power (no problem with our current computers and, of course, not the case of VZ).
    On the other hand, complexity implies high degrees of uncertainty in the system´s “inputs/parts relationships/results”. This is what I believe we find ourselves inmersed in. There are just so many fundamental elements that we don´t know where they stand.
    Having remembered these essential considerations, I, of course, would not dare making any kind of forecast – at this point, scenarios (different views of possible futures) can prove very useful.
    When uncertainty reaches these levels, I believe one can only try to obtain as many valuable, genuine inputs (opinions), as possible, and from them try to buil-up what could be one´s own truth regarding the system in question.
    There is a very significant amount of information above, not withstanding its diversity – well taken, diversity can enrich results very significantly. At this point I would not venture doing a task of synthesizing, and reading all above several times again would take a lot of time. But doing this could probably lead us to some very enlightening scenarios, that could help us deal in practice with our present situation.


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