The Paradox Of Chavista “Planning”: Even Simple Things Are Hard For Them

February 4, 2014

ven-rafael-ramirez

There is a paradox in Chavismo. On the one hand they plan on extremely complex and absurd laws, like the “Bill for Just Prices”, but on the other, they can not even hold the first of the “weekly” Sicad auctions for US$ 220 million.

And indeed, fourteen days ago Minister of Energy and Oil and Vice-President for Economic Affars Rafael Ramirez held a press conference (above) and with a straight face told us about a “planned” foreign exchange budget and “new and improved” and weekly Sicad auctions in the amount of US$ 220 million.

And a paralyzed country was eagerly awaiting for this auction for many reasons. For one, everyone was wondering whether the Sicad rate would slide down or not and by how much. But more importantly, after fourteen days (really all of 2014), people just wanted the “weekly” Sicad auctions to become regular, because only certain economic groups were included in the first auction. The sooner we could get over the first one, the sooner we could find out who would be included in the second or third auction.

But it was not to be. Today, the Venezuelan Central Bank suspended Sicad auction number 16, due to “anomalies” and “lack of compliance with norms”.

Thus, a simple “auction” (it is not an auction, it is an even much simpler sale of dollars) is cancelled by the same Government that just created a Superintendency to calculate and establish the “just” price for every goddamn  single good and service in the whole country.

But somehow, the same Government can not even organize the SIXTEENTH Sicad auction, where the only “novelty” is that the amount to be sold is twice as much as the previous fifteen ones.

It is the Paradox of Chavismo, they have not been able to run anything properly in fifteen years (twenty for that matter, their coup failed) but they keep coming up with ever complex bills and structures to regulate the economy.

But they can not even run the simplest things. Go figure!

46 Responses to “The Paradox Of Chavista “Planning”: Even Simple Things Are Hard For Them”

  1. Noel Says:

    Maybe they don’t have the dollars to sell, after all, they seem to have fallen behind in most hard currency payments except on the foreign debt.

    • m_astera Says:

      Exactly. But the reason there are no dollars to sell to the people? Being incompetent to run a simple sale of dollars is not the reason.

  2. xp Says:

    Scavenging for greenbacks?
    Bartering for time?
    Banking on moneyless resolutions?

    a list that could go on and on.

  3. Eduardo Says:

    If you take a look at the REAL figures, SICAD is a joke. Of bad taste.

    In the 6 and half months it has been runnings, it has approved less that USD 1,500 millions. It’s less than 250 millions per month. It hardly helps the 3500 millions monthly imports.

    The 15th auction, offered 100 millions, and finally granted 90.

    SICAD could be a chance to adjust gradually the dollars price, should they follow a more or less serious economic policy.

    But communist governments look first for image, next for people’s well.being. Such as the “oficial” BsF 6,30 dollar.

  4. Morpheous Says:

    Meanwhile, the parallel exchange rate broke the 80 barrier (more than 12 times the official rate of 6.30). Looks like it will go above 100 pretty soon.

    By the way Miguel, may I suggest to avoid the word Chavista? How about PSUVista? or Madurista?

  5. fred Says:

    They are Chavistas. They do not have any authority other than that given to them by the cultists of the dead president. Do not pretend that this government runs on anything other than nostalgia.

  6. captainccs Says:

    Did you expect more from truck drivers and military types driven by absurd ideologies?

  7. Javier Says:

    Yea, Did all participants present “anomalies” and “lack of compliance with norms”, or just the ones that government wanted to assign Dollars to ?

    Of particular interest is the case of newspaper El Impulso, in Barquisimeto. This newspaper, because Cadivi won´t give them Dollars at 6,30, went to this auction and pay for newsprint paper at Sicad rate even though the newspaper would have to be more expensive for consumers and adverisers, but at least they are not letting the paper die for lack of paper.

    BTW this publication just celebrated 110 years of existane and has never been out of print through 100 years of all kind of governments and regemes until this one.

    Javier, from Barquisimeto

  8. Andres F Says:

    Using their minds for anything other than the basic living habits is hard for them. So, it’s not surprising to see them cancel this auction.

  9. geronl Says:

    The most absurd thing about it is the idea that the government can run an economy (that works) at all. That is just not possible. The best thing a government can do is stay out of the way.

  10. Paul Esqueda Says:

    Miguel, when people go crazy, they go to a psychologist or a psychiatrist for treatment. When countries go broke they go to the International Monetary Fund or the World Bank to get their act together. In all cases, there is an admission that there is a problem. The Venezuelan Government is out of control, they do not admit it. Collapse and rebuild seems the only way out.

  11. NET Says:

    It’s getting worse. Today, under the “Just Prices” law, carnicerias in Catia/Vista Alegre were visited and forced to sell chicken at Bs.15/kg. that they had bought from wholesalers/producers at Bs. 50/kg.; and these wholesalers/producers, as well as those of other goods nationwide, are being threatened with fines/imprisonment/closure if they don’t lower their prices well below real production costs starting next Monday!

  12. Dr. Faustus Says:

    We tend to forget that all of this economic stupidity is being played-out on a world stage. Everyone knows. It’s in the world press/media every single day. Just imagine what the Chinese government must be saying behind closed doors. We lent these numb-skulls our money? And last year they came back here to Beijing to beg for more? Wow.

    • bobthebuilder Says:

      The Chinese aren’t being hoodwinked. You can bet your bottom dollar the Chinese have ensured they’ve got a vice-like grip on the oil, so whomever is in power will have to oblige them.

  13. arco Says:

    The easiest way voor rich chavistas to expant their capital is to rise the black market rate. Their purchase power rises 20% every month by doing nothing. The only thing they have to do is invent tricks like this new ‘fair prices’ law or postpone the auction and the black market response in their favor. Great way to gets richer and fool the people that you are doing it for them. Two fat birds with one stone. (imagine what they say behind closed doors, they even fooled the chinese!) They will keep doing that, offcourse, untill somebody will stop them. But somehow venezuelan people don’t see what the rest of the world sees. Or they dont want to see it because they realize that they are fools for 15 years in a row, and nobody want that.

  14. John Barnard Says:

    Are there any estimates as to what percentage of auction participants are fraudulent? …not real companies?

  15. Ira Says:

    I don’t care:

    My visiting niece from VZ brought my wife the arepa maker that I destroyed, and she no longer wants to kill me.

  16. Auuuuuvienelobo Says:

    If you bloggers would be the leaders, though u certainly

  17. Kepler Says:

    Miguel,

    M3 is defined different in different countries and regions. And yet: one thing that called my attention is how M3 is almost the same as M2 in Venezuela, whereas the difference in the EU is quite clear.
    According to the BCV excel sheets, M3 has in addition mostly the “cédulas hipotecarias”, which are hardly anything worth reporting. Why?

  18. moctavio Says:

    That is what M3 is M2 plus large time deposits within the financial system, which in Venezuela are not relevant. Financial instruments are different in different countries, so ar the way banks work, Banks in Venezuela do little between themsleves, not like in many parts of the world.

  19. Kepler Says:

    OK, but why ultimately?
    “Banks in Venezuela do little between themselves, not like in many parts of the world.”
    What is the motivation for banks elsewhere to be dealing with each others’ money? Simply another form or forms of speculation?

  20. moctavio Says:

    No, they have excess money, they place it in another bank to get paid and not have the money idle,

    • Kepler Says:

      Thanks. Jo, Miguel, no solo el crecimiento de M2 es alucinante. La evolución del ratio M1/M3 desde 1999 es increíble. Venezuela es puro billete…que no vale un carajo.


  21. […] as an economic basket case insults baskets everywhere. The economy is massively controlled, yet planning is a big mystery to Government officials. The Bolivar has been devalued officially, again, as […]

  22. Livefree Says:

    well here in Canada, we’re having trouble meeting our 2% inflation target (best we can do is a bit over 1%) and having shipped of our last banking chief Mark Carney to head the Bank of England, wondering if we could make a trade for Ramirez..ok we’d like an option on Merentes as well….to help us kick start some inflation…an area where we need some expertise

    http://m.theglobeandmail.com/report-on-business/economy/bank-of-canada-says-it-didnt-engineer-loonies-fall/article16754363/?service=mobile

    • xp Says:

      F*ck off.

    • Dr. Faustus Says:

      Sounds like a deal to me! By the way, could you also check to see whether or not there are any current ‘entry level’ bus driver positions available in, oh, …say,…Yellowknife as well? We have a candidate who may be looking for a new job very shortly…..

  23. VJ Says:

    FOR IMMEDIATE RELEASE
    Ninth Annual CITGO-Venezuela Heating Oil Program to Warm Thousands of Families During Cold Winter Months
    Boston – Feb. 5, 2014 – CITGO Petroleum Corporation and Citizens Energy Corporation are pleased to announce the launch of the ninth annual CITGO-Venezuela Heating Oil Program today. The CITGO-Venezuela Heating Oil Program, the only of its kind in the United States, has donated more than 235 million gallons of heating oil to more than 1.8 million people since 2005. As in previous years, this program will assist families, homeless shelters, and Native American tribes in 25 states and the District of Columbia.

    According to the National Energy Assistance Directors’ Association, this year nearly seven million US households will need heating assistance. The typical heating oil customer who lives in the Northeast is expected to spend more than $2,000 on fuel this winter, up 35 percent from the winter of 2008-2009. Families living in older homes will spend as much as $4,000 to keep the house warm.

    “We have committed to this program once again this year because we see it as a humanitarian effort that helps our most vulnerable neighbors stay warm during one of the coldest winters in history,” said Nelson P. Martinez, President and CEO of CITGO Petroleum Corporation. “We can’t relieve the need for everyone but this is our humble contribution to share the responsibility of improving the quality of life in our communities by using the strength of our resources to help those in need. This is one of the most important values we share with our shareholder, Petróleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela,” he added.

    The CITGO-Venezuela Heating Oil Program began as a single donation in response to the skyrocketing price of heating oil in the aftermath of hurricanes Katrina and Rita. Ever since, CITGO has dedicated itself to providing vital energy assistance for those who are forced to make the choice between purchasing vital necessities like food and medicine and heating their homes.

    Since the first year of the heating oil program, CITGO has partnered with Citizens Energy Corporation, a non-profit created in 1979 by former U.S. Rep. Joseph P. Kennedy II, to deliver the fuel. Citizens Energy Corporation, which has used successful ventures in the energy and health care industries to finance charitable programs in the U.S. and abroad, has provided energy assistance to families in need for more than 30 years.

    “The poor are facing a terrible hardship this winter,” said Kennedy. “Federal fuel assistance has dropped 40 percent over the last few years while heating oil prices have jumped by a third. With the kind of cold we’ve experienced this winter, the federal aid just doesn’t go as far. It’s a triple whammy on the poor. That’s why the generosity of CITGO Petroleum and the people of Venezuela is so important – it helps fill the fuel gap for the most vulnerable among us.”

    The Venezuelan Vice Minister of Foreign Affairs for North America, Claudia Salerno Caldera, who attended last year’s launch of the program, expressed the support of the Venezuelan government again this year. “Helping the poor is a humanitarian principle that is inherently tied to responsible energy policy in the Bolivarian Republic of Venezuela and one that transcends geographical boundaries,” she said. “President Chávez promoted this program in response to a request for humanitarian aid at a time of high fuel prices. President Maduro has ratified this support, so that the program will continue to warm US homes as a sign of solidarity between the peoples of Venezuela and the United States.”

    Families struggling to pay for home heating oil can call Citizens Energy Corporation at 1-877-563-4645), to see if they are eligible for heating oil assistance. Once approved, the household will receive an authorization letter with details for arranging a one-time delivery of up to 100 free gallons of oil.

    CITGO, based in Houston, is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals and other industrial products. The company is owned by PDV America, Inc., an indirect wholly owned subsidiary of Petróleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela. For more information visit http://www.citgo.com

    Beginning in 1979 with oil-trading ventures in Latin America and Africa, Citizens Energy has used revenues from commercial enterprises to channel millions of dollars into charitable programs in the U.S. and abroad. Whether heating the homes of the elderly and the poor, lowering the cost of prescription drugs for millions of Americans, or starting solar heating projects in Latin America, Citizens Energy creates social ventures as innovative as the businesses that finance them. For more information, visit http://www.citizensenergy.com.
    http://www.citizensenergy.com/news/press-releases/ninth-annual-citgo-venezuela-heating-oil-program-warm-thousands-families-during

    • HalfEmpty Says:

      Another Kennedy at the trough. You’d think the trust fund would be enough. But then again, he might be somewhat removed from that particular money gusher.

    • Dr. Faustus Says:

      So, lemme see if I got this right. Hundreds, perhaps thousands, of Venezuelans are suffering from an outbreak of Chagas Disease, amongst many other medical calamities, because of a lack of basic medical supplies in Venezuela,….. whilst a loopy and starry-eyed RFK jr. is celebrating an influx of scarce Venezuelan funds for heating oil? Right.

    • RattInnaCage Says:

      Here’s what Joe Kennedy makes from Citizensenergy:
      > Reportable compensation from Organization: $86.311
      > Reportable compensation, related Organizations: $641,343
      > Estimated amount, other compensation: $173,582
      BTW, it’s estimated he works 10 hours a week for Citizensenergy.

      Here’s what Joe Kennedy’s wife makes from Citizensenergy:
      > Reportable compensation from Organization: $37,778
      > Reportable compensation related Organizations: $234,796
      > Estimated amount, other compensation: $74,190
      She also puts in 10 hours a week.

      Fun Fact: Citizens energy does not qualify as for tax free status. It’s a business, not a charity.

      What a disgraceful legacy Joe II is to the memory of his father, Robert.

  24. RattInnaCage Says:

    I was looking at the top ten ranking stories in El Universal:

    1. Venezuela’s Maduro: “We’ll expropriate whatever…
    2. Venezuelan gov’t finds more containers adrift
    3. US Department of Agriculture forecasts scarcity…
    4. Leader of Venezuelan oil union arrested over co…
    5. Purchases of US oil byproducts by Venezuela jum…
    6. Venezuela’s economy on the brink of recession
    7. Gov’t to draw payment scheme to settle USD debt…
    8. Maduro lambasts officials who question him
    9. As many as 334 events of Chagas disease are con…
    10. Prices of wholesale imports triple in Venezuela

    I have come to the conclusion that in fact, Maduro is a genius at combating inflation. INFLATION CANNOT HAPPEN IF THERE IS ABSOLUTELY NOTHING TO SELL! Yes, if there is noting on any shelf, any auto lot, any produce stand, then prices cannot go up.

    • livefree Says:

      Following up on the thought that there’s nothing to sell…overheard a skype call with a grandmother living in caracas..I was surprised at the anger with the government not over politics but hunger..apparently their whole building is hitting the strrets next week..the theme I heard repeated is..were hungry and there’s nothing to buy…and we’ll stay on the street until the goivt is gone…rhetoric or maybe the start of something that goes beyond political opinion…I’ll be interested to see how this plays out.but seems the focus is hard to argue with chavista or not.

  25. RattInnaCage Says:

    Now for something totally chilling from El Universal:

    The first three weeks of 1994 saw 334 events of Chagas disease? How can that possibly be? I was under the assumption that there were thousands of Cuban doctors in Venezuela. What are they doing there, nothing?

    I quite frankly had never heard of Chagas disease, so I looked it up, and to say I was shocked is an understatement.

    Can I assume that El Universal is one of those newspapers that are finding it impossible to find newsprint and ink? ‘Cause if the people have no idea of this disgrace then it’s never really happening, right?

  26. Salesman Says:

    Somewhere, Friedrich Hayek is slowly shaking his head.

  27. N Smith Says:

    Someone please pass this on to “extorres” of Unconditional Cash Transfer fame:

    “Swiss to vote on incomes for all – working or not”

    http://www.bbc.co.uk/news/business-25415501

    I believe he is a person whose whereabouts are not known :-)


  28. […] The Paradox Of Chavista “Planning”: Even Simple Things Are Hard For Them […]


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