Uncommon Integrity

 We’ll head Down The Rabbit Hole to wrap up this week’s segment in a few but first… Wilson Center reports that Leopoldo Lopez, co-founder of the World Liberty Congress, former political prisoner of the Maduro regime, and our favorite Venezuela opposition political figure, testified before the US Senate Foreign Relations Committee about the struggle for freedom and democracy in Venezuela.

 “My story is one of many. I have not been alone in this struggle. Hundreds of activists, social leaders, journalists, union leaders, business people, students, military officers, and common citizens have been targets of the Maduro regime.”

 OK, somebody’s gotta’ say it! While it’s true Leopoldo’s story may be one of many, not many of those unjustly imprisoned by the Maduro regime had the opportunity to cut a deal with the Chavista’s but refused to compromise their principles and chose instead to remain in jail as Leopoldo did. (He was incarcerated for encouraging peaceful protests in 2014, known as “The Guarimba” in which the Maduro regime killed 40 protesters)

 While in prison he drafted a comprehensive plan for the recovery of Venezuela, post-Chavismo, encompassing all areas of the economy, society, and life in Venezuela utilizing a series of much-needed, common sense reforms. He’s a very smart guy and a man of uncompromising and uncommon integrity.

 Like most prominent Venezuelan opposition leaders, Leopoldo is banned from holding public office (He’s currently living in exile in Spain) but his ideas are very similar to those of our favorite candidate in the opposition’s primary, Maria Corina Machado, who isn’t banned, at least not yet.

 Then we have ABC News reporting that the former general counsel for PDVSA (Venezuela government-owned oil company), Alvaro Ledo Nass, pleaded guilty in Miami federal court on money laundering charges in connection to a conspiracy to siphon at least $550 million from state coffers through corrupt currency deals.

 He acknowledged taking $11.5 million in bribes from 2012-2017. Nass is the latest among dozens of former Venezuela officials charged or convicted in the US as part of a sprawling (and continuing) investigation, Operation Money Flight, that is seeking to untangle how Venezuelan insiders stole billions in oil wealth from their country. We’ve previously discussed (as recently as this week) the creation of countless Venezuelan millionaires (and billionaires) through Venezuela’s currency exchanges.

 Now, let’s go Down The Rabbit Hole…

 Chapter 5 continued…

 …People were using bolivar notes in various denominations to make things like handbags. Street vendors offered bills instead of napkins because they were cheaper. When riots and looting occurred and people came in to assess the aftermath the floor would be littered with bolivar notes from the cash register. They weren’t even worth picking up off the ground.

 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 changes would be tied to the government’s (Maduro’s) already discredited and utterly failed cryptocurrency, “El Petro”. He proudly proclaimed that, once again, no one with any knowledge of economics, business, or finance had any input regarding these changes. It was purely a Chavista invention and was the new way forward (again) for “The Revolution” and the world! “Viva la Revolucion!”….again.

 The new currency, the “Soveriegn Bolivar”, designation bsS (bolivares soberanos), would lop 5 zeros from the “Strong Bolivat”, designation bsf (bolivares fuertes), which had lopped 3 zeros off 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 bolivares. Uhh…OK…and we won’t even get into the details of “El Petro” here. Again, it deserves it’s own chapter.

 If you’re feeling confused you’re not alone. Here’s something I found a while ago. Keep in mind, 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 worth only $10.92 (not $60)

 The government can’t even reconcile values from it’s own websites! needless to say, this discrepancy hasn’t been covered in the Venezuelan media and there has never been 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’s all this working out for “The Revolution’s New Way Forward”? Well, in the first 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 3,000% increase in the minimum wage got a minimum wage earner UP TO $30 A MONTH! Yes, a buck a day. (At the time that was the United Nation’s metric for extreme poverty) How bad is it when it takes a massive increase in the minimum wage to raise the people up to extreme poverty? By the time it went into effect the devaluation in dollar terms reduced the minimum wage to $22 and today it’s under six bucks…A MONTH!! How’s that $200 a month minimum wage before the Chavistas took over looking now?

 Summary : What were the intentions of these two policies, price and currency controls? Price controls would provide food to the Venezuelan people at affordable prices. The reality was the controls created increased shortages of many items and increased the prices of many items. 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 while protecting the buying power of the average Venezuelan. Well, the dollars still left the country only not through conventional avenues. It went to bank accounts around the world of overnight millionaire Chavistas created by the controls. Inflation went from 100% to over 1,000,000%. Buying power went from the $200 a month minimum wage before Hugo Chavez took power, which was proclaimed unacceptable,  to under $6 a month today and that’s up from the 2018 low of 60 cents a month. People that used to think about buying a house, a car, or taking a vacation now think about how to survive when a month’s minimum wage buys you three and a half kilos of flour 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 will do it for the week. We’re taking a four day weekend to celebrate the Easter holiday so we’ll be back Tuesday with more current news and our next segment of Venezuela : Down The Rabbit Hole. Until then…HAPPY EASTER!!!




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