We’ll head Down The Rabbit Hole in just a bit but first…Bitcoin.com tells us that BCV (Venezuela Central Bank) has not published data corresponding to the last four months making Venezuelan economists worry that the country is entering a new hyperinflation period.

 One economist, Jesus Casique, says inflation figures are just the tip of the iceberg regarding the missing data. He stated that BCV is also hiding numbers for balance of payments (foreign currency input and output), GDP (Gross Domestic Product), and gold reserves. This is not the first time this has happened.

 BCV didn’t publish GDP or CPI (inflation) figures from 2016-2019. Only after the fact did they acknowledge that inflation in 2018 was over 130,000 % and all four years the country’s GDP contracted, part of 8 consecutive years of recession under Maduro and 21st Century Bolivarian Socialism.

 As far as the gold reserves..at last count, in 2022, Venezuela’s gold reserves were under $5 billion (closing in on $4 billion), down from over $30 billion when Hugo Chavez repatriated almost all of Venezuela’s gold to “protect it for the people” (Who knew that “the people” were the Chavistas who were stealing it?)

 This lack of reporting is pretty much SOP (standard operating procedure) for the Maduro regime, the exception being 2022 which actually showed a little positive GDP growth although inflation still came in at 234% according to unofficial sources. Maduro and the Chavistas were happy to publish numbers in 2022 proclaiming it as the year of the beginning of a new era for “The Revolution”. FYI, Maduro has proclaimed each year since he took power as the year of the “Bolivarian Revolution’s” economic miracle and each year the economy contracted, 2022 being the outlier.

 It’s looking more like things are just returning to normal, at least “Chavista normal”, which translates into currency devaluation, recession, inflation (hyperinflation or something close to it), in short…more suffering for the long-suffering people of Venezuela.

 Then we have BNN Bloomberg reporting that Chevron is urging PDVSA (Venezuela government-owned oil company) to dredge the primary shipping channel in Lake Maracaubo so it can double it’s exports to the US. They are paying for a study to measure the mud and muck in various areas where there are concerns vessels will run aground.

 I know, you’re probably thinking that the dredging would be performed as part of routine operations for PDVSA (They have to keep shipping lanes open, right?) but they’ve treated dredging in Lake Maracaibo just like they’ve treated all their critical oil production infrastructure (and their power generation infrastructure… and their water delivery infrastructure…you get the idea).

 They ignore maintenance and routine repairs until something breaks and things come to a screeching halt and then try to find someone to fix their problems (and someone to blame for them). This shouldn’t surprise anyone as it’s how the Chavistas handle everything. Maybe that’s why only one in ten buses in Venezuela’s public transportation fleet are operational. PDVSA did not respond to requests for comment.

 And we have Reuters reporting that middlemen have left PDVSA with $21.2 billion in unpaid bills (accounts receivable). $3.6 billion may be unrecoverable because tankers were allowed to leave Venezuela ports without the agreed-upon prepayment.

 This is a consequence of the Maduro regime’s sanctions-avoidance policy which relies on a combination of brokers, lower-tier service providers, as well as lesser known (and sometimes previously unknown) tanker companies.

 Now, let’s go Down The Rabbit Hole to wrap up our weekly segment…

 Chapter 3 continued…

 …As the economy completely cratered, wages for all those who remained lost all their purchasing power. They had gone from good jobs…to mediocre jobs…to bad jobs. The minimum wage got as low as 60 cents a month (Yes, you read that right… 60 cents A MONTH!) and while PDVSA workers earned more than the minimum wage they were struggling just to feed their families. The last straw was when Maduro completely reconfigured the monetary and economic systems and raise the minimum wage an astounding 3,000%. The problem for experienced workers was they got nothing! No corresponding increase for them. Not even a token amount. A new hire would earn the same as an experienced professional (what few still remained). The exodus proceeded in rapid fashion.

 One last note on the personnel side of things. For the remaining administrators at PDVSA a kind of paralysis set in. Nobody wanted to be the one who approved or denied anything so they delayed and/or side-tracked. When a decision absolutely had to be made they were in a “damned if you do and damned if you don’t” situation. If the word came down from above that they wanted to do something either corrupt or just plain stupid and it came to you, well, you had a choice to make. Sign off on it and set yourself up as a scapegoat if all didn’t go well (and under Chavismo things usually didn’t go well) or refuse to sign off and be thrown in jail (remember, in Venezuela rights are a thing of the past). Many of these people found it was better to simply leave. At one point PDVSA stopped accepting resignations.

 So now you have a collapse in oil prices (they’ve since rebounded but are far from the all-time highs Chavez enjoyed) and production is falling. If they had to do some juggling with deliveries of exports at 2,500,000 bpd production a drop to 2,000,000 would be a real balancing act. The minimal investment in critical infrastructure at 2,500,000 bpd production levels became non-existent at 2,000,000 bpd. The deserted workforce at 2,500,000 became a wasteland…and THEN IT GOT BAD!

 Under Maduro’s leadership the production continued to decline each year approaching the previously unthinkable level of 1,000,000 bpd. The days of raking in over $300 million a day were a distant memory (not to mention borrowing $60 billion from the Chinese). Revenues were down to $50 million a day and falling. Could it get any worse? You know the answer.

 In March, 2019 Venezuela experienced a series of catastrophic blackouts. They were caused by the same issue afflicting PDVSA, years of little or no investment in critical infrastructure or maintenance. And wouldn’t you know it, the hardest hit areas were the oil-producing regions. March oil production came in at 720,000 bpd. Most analysts were projecting production to fall to 500,000 (It actually fell to 450,000 with a brief period at 250,000). With operable drilling rigs at 20, down from 95, and some days with zero in operation, production from existing wells declining as they fall into disrepair, a complete collapse of the workforce, no experienced leadership, and no credit availability PDVSA was,and is, in a death spiral.

 Summary : It seems a pattern is developing here. PDVSA did not collapse due to a civil war, a natural disaster, or outside influences. Other oil-dependent companies and countries survived the collapse in oil prices and today are doing quite nicely. It is estimated that $10 billion a year will need to be invested for 10 years (or longer) to recover production lost under the stewardship of the Chavistas. As there is no technical expertise nor responsible management left at PDVSA they will have to partner with the large multinational oil companies and oil service firms (the same ones the Chavistas previously expropriated assets from) or contract the recovery and redevelopment out altogether. As has become our mantra pertaining to Chavismo and 21st Century Bolivarian Socialism, this was (and is) an entirely avoidable disaster, a man-made disaster, a Chavista- made disaster.

 That will do it for the week. We’ll be back, as usual, on Monday with more current news and our next Venezuela : Down The Rabbit Hole segment. Until then…have a great weekend everybody!!!