Heating Up

 We’ll get to our Down The Rabbit Hole segment shortly but first…JNS reports that the “Free Alex Saab” (The architect of Nicolas Maduro and the Chavista’s fraudulent CLAP government food program and other illicit schemes) propaganda campaign is heating up with a resolution from the leftist Sao Paulo Forum demanding his release, speeches by Nicolas Maduro and the Iranian Foreign Ministry condemning his extradition and detention due to his “diplomatic status”, and even outrageous claims by Al Mayadeen, a pro-Hezbollah media outlet, that the US is using “torture methods against Saab”.

 This comes ahead of his next scheduled appearance in court where a ruling is expected on his “diplomatic status”. The article also highlighted Saab’s efforts to facilitate various deals with Iran and laid the groundwork for Iran’s blacklisted Mahan Air transporting planeloads of weaponry to Venezuela including 1,050 missiles, 400 bombs, 500 rockets, and 35 radar systems.

 There are credible rumors swirling that the Biden administration is looking to make a deal for Alex Saab according to former Assistant Treasury Secretary, Marshall Billingslea. Options include a prisoner swap or if his case is not dismissed due to his “diplomatic status” a possible pardon….Don’t do it Joe!

 Then we have La Prensa Latina reporting that a lack of available credit threatens the proposed rejuvenation of Venezuela’s automotive sector according to the president of the Chamber of Auto Parts Manufacturers, Omar Bautista.

 Last month the vehicle loan portfolio in Venezuela was $414,373 (if you use an average price of $20,000 per vehicle, which is low, that’s only enough for about 200 cars). Venezuela has the highest banking reserve requirements in the world so banks must send almost all their cash deposits to BCV (Venezuela Central Bank), making money for loans effectively unavailable.

 With a minimum wage of only $12 a month cars are not affordable to most Venezuelans and historically 70% of vehicles sold in Venezuela were with loans. Only 62 units were produced by Venezuela’s “auto industry” (two guys in a garage could produce that many) this year (Mexico produced 2.78 million and Brazil 1.96 million) so Venezuela’s auto industry will rely almost completely on cars assembled from “kits” imported from Iran as well as new “ready for sale” Iranian cars. The Iran/Venezuela joint venture, Venirauto, predicts 100,000 units will be available to Venezuela annually. The question is, without bank financing who will buy them?

 Then we have Nicolas Maduro already making more demands after the US eased sanctions against Venezuela after an agreement between the Maduro regime and the Venezuela opposition for a UN- managed fund of $3 billion in humanitarian aid from unfrozen bank assets. “They want free elections? OK, elections free of all sanctions!” (He’s feeling pretty cocky these days with Biden caving on sanctions and his new-found support from South American leftist leaders) He also called for Citgo, owned by PDVSA (Venezuela government-owned oil company) and currently run by the Venezuela opposition, to be returned to his government’s control.

 He referred to the Venezuela opposition’s Unitary Platform, the guys he’s supposedly “negotiating” with, as “right-wing, coup plotter, interventionist, pro-gringo, and terrorists” accusing them of trying to assassinate him. (I stopped counting at 30 supposed assassination attempts claimed by Maduro) So much for his conciliatory tone. This is what you get when he sees a trend toward “normalization”.

 And we have Law 360 reporting that former Venezuela Treasurer, Alejandro Andrade, testified in a Federal Court in Florida that he was paid millions of dollars in bribes by disgraced Venezuela businessman, Raul Gorrin, for preferential currency exchange access and that it continued with his successor, Claudia Diaz, on trial in Florida after being extradited from Spain, where she is also under investigation.

 Let’s head Down The Rabbit Hole…

 Chapter 8/ Free Gas continued…

 …I’m sure nobody will be surprised that the reason involves the military and smuggling.We already know that we have an Army General running PDVSA and that the Army is in charge of food distribution as well as medicine. Maduro’s fraudulent CLAP government food program is also facilitated by the most powerful of the ‘colectivos’, his civilian militia of armed motorcycle gangs, numbering in the hundreds of thousands.With cash being tight and those other avenues not producing what they used to, how can he keep the military happy? Since the military controls the border crossings, except where it’s controlled be FARC dissidents/ELN guerillas from Colombia who are in league with the Chavistas, smuggling is an easy task and with the price of gasoline so much higher in Colombia it’s quite lucrative.

 At a cost of $0.000001 per liter or approximately $0.000004 per gallon (the reference point for us gringos) an average tanker which holds 13,400 gallons costs about a nickel, yes five cents, per truckload! So, let’s say you sell it for half the legal price … at that rate each tanker truck is worth about $20,000. Not a bad return for each $0.05 invested.

 The only issue for smugglers (the military) is supply. As we saw earlier, PDVSA production is collapsing. A rational person would deal with the domestic supply issue first, which by the way is a requirement for membership in OPEC (all members must supply domestic needs before exporting). Even a rational crooked person would ensure that the smugglers have something to smuggle. It’s getting harder and harder for Maduro to keep the smugglers happy due to his determination to continue shipping oil/gasoline to Cuba, who keeps him propped up, dominating his internal security apparatus.

 While gas rationing is in place for several states people are waiting in lines for days for their free gas. At the same time Maduro is sending tankers full of oil to Cuba. When a tanker captain refused to pilot his ship to Cuba due to US sanctions SEBIN security forces boarded the tanker and replaced the captain with one more Chavista- friendly. Another sanctions evading method is to disconnect their transponders when they near other country’s national waters en route to Cuba to avoid detection and therefore seizure. They have also had gasoline shipped direct to Cuba when Venezuela refineries couldn’t produce it.

 Summary : This won’t take long. Gasoline was for all intents and purposes free (international price aside). The price didn’t remain low to benefit the people. As we’ve seen, Maduro shows nothing but disdain for them but he does need to keep the military happy. Funny how being able to smuggle tanker trucks to Colombia that cost a nickel and can be sold for $20,000 will do just that. With the Venezuela people subject to either gas rationing in some areas or waiting in line for days to fill up how can Maduro be shipping oil and gasoline free of charge to Cuba in return for his Cuban “advisors”? The Venezuela people deserve the same commitment from their president he shows to Cuba. The problem for them is that they don’t have anything Maduro needs. Elections are rigged so he doesn’t need their votes and the people benefiting from oil shipments and gasoline smuggling have proven more than capable of repressing any dissent. To Maduro the Venezuelan people seem to be a necessary evil.

 That will do it for this segment of Venezuela : Down The Rabbit Hole. We’ll be back with more news tomorrow….

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