It's All About Money

 We’ll head Down The Rabbit Hole after a few recent news items. First let’s look at what’s happening with the world of finance in Venezuela. Kuwait Times reports loans last year in Venezuela are at about $30 million. Yes, that’s for the whole country. In contrast neighboring Colombia did about $14 billion. I knew Venezuela was an economic train wreck but this difference is huge. In Venezuela only 0.6% of loans were for mortgages so this tells us that the only people buying homes are those with cash to pay for them. I guess I shouldn’t be surprised. Hyperinflation (we’re in year 5) and currency devaluation (73% so far this year alone) make loans almost impossible.

 In the world of big money, the corporate bond market, we have a decision by OFAC (Office of Foreign Asset Control)  on Venezuela’s PDVSA 2020 bonds. This is a big deal because those are the only Venezuelan corporate bonds tied to CITGO, about the only asset left now that the Chavistas have destroyed the once envied PDVSA. When a company defaults on it’s bond payments the bond holders normally go to court and the company must either negotiate a settlement or the court can force them to forfeit assets. It the case of PDVSA CITGO is about the only thing worth seizing but now OFAC has delayed the bond holders until at least January,2022.

 In another financial related matter economist Jose Guerra tells us that Venezuela will need at least $15 billion to restart the economy in 2022. The Chavistas make a lot of noise about the coming economic rebound but we’ve heard this from them before. Maduro has predicted an economic surge every year since he took (and I mean TOOK) power and the economy has been in recession every year. With all conventional credit avenues closed to them ( they’ve defaulted and/or screwed pretty much everyone on the planet) where can they go for money? About the only option left is the IMF (International Monetary Fund) but Hugo Chavez severed ties with them in 2005 and Maduro has repeatedly bashed them. Maybe it’s time to go to them, hat in hand, and beg forgiveness? Who knows? Since they bailed out Argentina twice and are working on round three maybe they’ll see fit to bail out 21st Century Bolivarian Socialism?

 Another problem related to finance is Venezuela’s gas deficit. It’s been around to one degree or another since 2010 but it got much worse in 2017 when Chavez’s brother presented unacceptable terms to refinance government bonds. With all the other challenges facing Chavismo we’ll just throw this one on the pile.Oh, and did I mention that the diesel shortage in Venezuela is crippling wholesalers? This is leading to higher food prices but in the hyperinflation environment of Venezuela it goes almost unnoticed.

 We do have trying to put a positive spin on Venezuela’s oil business prospects. They cite Venezuela based Sucre as being 100% owner of the previous joint venture with Japan’s Inpex. They don’t say that the Japanese company pulled out because the joint venture was a loser. They also point to China’s CNPC as showing investment interest in Venezuela again. After a few years of pulling back from Venezuela and with a long history of failed projects with the Chavistas it’s way too early to say that the Chinese will be willing to invest serious capital.

 Now is as good a time as any to head Down The Rabbit Hole so….

 ….In 2017 the FAES was created to (of course) protect the people. Nothing could be further from the truth. While the DGCIM and SEBIN were widely know for “disappearing people” and their operations were cloaked in secrecy FAES is widely known for killing people and there is nothing secret about it. People are routinely killed in their living rooms in front of their families or are dragged outside to be shot where the neighbors can see. They are masked,dressed in black, and carry long guns and when they come they’re not coming to arrest anyone. Occasionally you may see one of them in uniform and without a mask but that’s usually in the daytime. It’s not even clear who’s in the chain of command. They are affiliated with the PNB, the national police, but that’s really all anyone knows about them, and it seems nobody really wants to ask….would you?

 While DGCIM and SEBIN may be a notch below FAES on the lethality scale they are no less terrifying. Captain Acosta was in the hands of DGCIM and Fernando Alban was detained by SEBIN. While they weren’t dragged out into the street and shot in the head,FAES style, they are no less dead. Both groups operate with impunity and have come under fire for human rights violations. In March,2019 DGCIM had 15 members denounced by the OAS (Organization of American States) along with 3 prosecutors and 2 MPs (assembly members) It is frequently reported by attorneys that they have been able to secure release orders for clients only to be frustrated by SEBIN. SEBIN is under direct control of the vice president of the country so it is their stance that, when they choose to, they can disregard court orders and will only recognize orders from the office of the VP. It happens all the time and without an independent judiciary there is no recourse.

 Oh,and don’t think you’re safe just because you’re Chavista. Party affiliation won’t protect you if you don’t tow the party line. In February,2015 Alcedo Mora disappeared. The day before he “went missing” he sent a text that SEBIN was following him as he attempted to investigate corruption at state oil company PDVSA…. and he was Chavista! At the same time two brothers involved in community organizing with Mora also “went missing”. In another example, Ricardo Moreno, Venezuelan Foreign Ministry North American Director, was grabbed by SEBIN and held for 12 days with various explanations offered including treason and trafficking of influences. Is there a pattern forming here…multiple explanations/allegations without proof? When Moreno was released after being held for 12 days nothing more was said by either party.It was like it never happened. Speculation was that the next time he would simply disappear.

 To be continued….

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