Reversal Of Fortune

 We’ll head Down The Rabbit Hole to finish up this week’s chapter in a sec but first, the smuggler’s dilemma or, as Don Henly said, “Smuggler’s Blues.” Insight Crime reports that it’s unclear what the smugglers of gasoline across the Venezuela border with Colombia will do going forward. They used to smuggle gasoline from Venezuela, where it was almost free, to Colombia and sell it for a handsome profit. Then the price in Venezuela spiked from almost nothing to around 10 bucks a gallon for non-subsidized gasoline and there were severe shortages. The smugglers simply reversed direction and smuggled it from Colombia to Venezuela. Now the shortages, while they’re still around, have eased a bit and the prices are relatively the same in both countries. What’s a smuggler to do?

 Then we have Merco Press reporting that 13 political prisoners may be getting set up for indefinite incarceration. The prisoners in question were arrested in 2017 and their cases were proceeding, albeit slowly, through military court (don’t ask me why they weren’t in a civilian court to begin with). After a two year procedural delay the cases were ready to proceed again but the prisoners have now been transferred to other jails in various jurisdictions and will be tried in ordinary court. This means the entire process (other than the arrest) must start over. Will they have to wait another 5 years to come to trial? In Venezuela it’s anybody’s guess.

 Caracas Chronicles had a good piece titled “What Options Are Left?” regarding where talks between the opposition (what there is of it) and the Maduro regime may go from here. We’ve referenced several articles here recently about what the regime may be looking for going forward as well as the opposition. With no sanctions relief in the offing and the release of Alex Saab (the architect and front man for many of Maduro’s fraudulent enterprises) unlikely there’s not much to be gained for the regime by talking to anyone. For the opposition, with no elections for almost another 3 years, there’s not much to be gained either. So what’s there to talk about? What changes? The short answer is…not much.

 And in another article by Caracas Chronicles we have VP Delcy Rodriguez making yet another fanciful declaration.”There are no restrictions for journalists in Venezuela.” No mention of Chavismo’s systematic dismantling of the media at all levels. No mention of the many journalists like the intrepid reporters at who broke the Alex Saab story years before he was arrested and extradited to the US. They had to flee the country and currently operate from Colombia. Nor was there any mention of Venezuela’s hate law. Remember, a few years ago Maduro (unconstitutionally) installed a Constituent Assembly (parallel to the duly elected 2015 National Assembly) supposedly to rewrite the constitution, which they never did. They did though manage to pass an anti-hate law making it illegal to, among other things, criticize a high government official carrying a penalty of up to 20 years in jail. Sounds like freedom of the press to me.

 And we have the Daily Mail reporting that it’s official, Venezuela has passed Haiti for the number 1 spot on migrants passing through the dangerous overland route through Panama known as The Darien Gap. In 2021 80% of the migrants traversing this route, the start of the journey north to the US southern border, were from Haiti. In January,2022 more than 50% of migrants making the passage were from Venezuela.

 We’ve also talked here many times about the shenanigans played by Iran and Venezuela to disguise fuel tanker shipments. Now we have Lloyd’s List telling us that at least 11 tankers are masquerading as vessels owned by the company Frontline using misleading names and laundered serial numbers to transport Venezuelan and Iranian oil. It’s also worth noting that the latest shipment to arrive in Venezuela, the tanker, Stharla, wasn’t registered and there is no record of port entry. Hmmm…

 I guess it’s time to head Down The Rabbit Hole….

 So what does Maduro do? Wait for it …he announces in August,2018 a complete economic overhaul including massive devaluation, a new currency (the Sovereign Bolivar), a 3,000% increase in the minimum wage, and all these things would be tied to the government’s already discredited and utterly failed cryptocurrency ‘The Petro’. He proudly proclaimed that,once again,no one with any knowledge of economics, finance, or business had any input regarding these changes. It was purely a Chavista invention and was the new way forward for “The Revolution” and the world! Viva La Revolucion !! …again.

 The new currency,the Sovereign Bolivar,designated bsS (bolivares soberano) would lop 5 zeros from the Strong Bolivar,designaton bsf, (bolivares fuertes), which had lopped off 3 zeros from the bolivar.So let me get this straight, the new bsS would be the same as 100,000,000 of those boring old pre-Chavismo bolivars. Uhh…OK… and we won’t even get into the details of “the petro” here. Again,it deserves it’s own chapter.

 If you’re feeling a bit confused you’re not alone. Here’s something I found when I was researching this in 2019.Keep in mind that these figures come from official government websites.

 According to the Venezuela Ministry of National Commerce :

 1 Petro = 36,000 bsS and $60

 DICOM official exchange rate = 3,297 bsS / dollar

 So :

 According to DICOM each Petro should = 197,820 bsS ($60)

 Or :

 If the value of the Petro really is 36,000 bsS the Petro is really worth only $10.92

 The government can’t even reconcile values from it’s own websites! Needless to say this discrepancy was never covered in Venezuelan media and there is never an interview or press conference where someone might ask the question, “So what is it? It has to be one value or the other. It can’t be both!” To ask that question would be to ask for jail time.

 So, how did all this work out for the “Revolution’s New Way Forward”? Well, in the 3 and 1/2 weeks from the announcement until the changes went into effect the new “Sovereign Bolivar” didn’t stop the minimum wage’s nosedive in real terms. The huge increase of 3,000% got the minimum wage earner (at the time of the announcement) UP TO $30 A MONTH! Yes, A BUCK A DAY! (A dollar a day is the UN’s definition of extreme poverty). By the time it went into effect the devaluation in dollar terms reduced the minimum wage to $22 a month and it continued to fall from there. Remember, after another massive devaluation lopping off another 6 zeros the minimum wage is under $2 per month.

 Summary : What were the announced intentions of these two policies, price and currency controls? Price controls would provide food to the people of Venezuela at affordable prices.The reality was the controls created increased shortages of many items and increased prices on many items as well.Either you couldn’t find things or you couldn’t afford what you could find.

 Currency controls would keep dollars from leaving Venezuela and help control inflation protecting the buying power of the average Venezuelan. (That was the idea) Well, the dollars still left the country only not through conventional avenues.It went to overseas bank accounts of overnight Chavista millionaires (and billionaires) created by the controls. Inflation went from 100% to over one million%. Buying power…well…the $200 a month minimum wage that was deemed unacceptable when Chavez came to power is under $2 a month and that’s up from the 2018 low of 60 cents a month.People that used to think about buying a car, a house, or taking a vacation now think about how to survive when a month’s minimum wage buys you a few bags of flour, or rice, or pasta, and nothing more!

 What’s that I hear? It’s that broken record again. There was no major drought or famine.There was no war. There was no natural disaster. This is an economic disaster.A self-inflicted disaster. A Chavista made disaster.

 That wraps up our chapter on “Control Freaks” and another week of fun and games from the horror show that is 21st Century Bolivarian Socialism. We’ll be back Monday.

 Have a great weekend everybody!!!!

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