Courting Evangelicals?

 We’ll get started with this week’s Venezuela : Down The Rabbit Hole segment, “Free Gas” in just a moment but first… Venezuela president (dictator), Nicolas Maduro, announced the government will start a welfare program to renovate churches and give bonuses to pastors in an effort to court Evangelical Christians ahead of the 2024 presidential election (which has yet to be scheduled).

 Unlike most countries where Evangelicals support conservative political parties, in Venezuela Evangelicals have historically supported Chavismo due to the fact that the Catholic Church is critical of the Maduro regime and Chavez before him.

 I know politics makes strange bedfellows but the Evangelicals need to check themselves. Maduro, who has remained deeply unpopular throughout his time in power, has seen that 2,500 Evangelical churches and 13,915 pastors have received government aid since 2022. The funding for “religious development” by Nicolas Maduro’s National Assembly in 2023 is equal to the funding for science and culture combined.

 As is usually the case, Evangelical’s support for Chavismo seems to be more about the money than any alignment with the Maduro regime and their twisted ideology (There is a reason why the ICC, International Criminal Court, is investigating the Maduro regime for systematic Human Rights violations and possible crimes against humanity).

 Chavismo is a funding source for the Evangelicals who do not have the financial support enjoyed by the Roman Catholic Church, which has a 70% following in Venezuela and is aligned with the Venezuelan opposition (kinda hard to be a Christian religious organization and be aligned with a government that commits 1,400 extrajudicial killings per year and starves it’s own people). For the Evangelicals it really is, as they say, “all about the Benjamins”.

 Then we have Today q telling us that Banco de Venezuela, the country’s largest bank, has reportedly fallen victim to a Lockbit ransomware attack. Lockbit is a malicious software that encrypts the attacked files making them inaccessible until a ransom is paid.

 Banco de Venezuela hasn’t confirmed or denied the report but issued a statement that it’s platform and electronic channels are functioning normally, however, the attack has been confirmed by several cybersecurity portals.

 It is very possible that the attackers may have taken hostage information, both internal bank operations and customer data, and are demanding a ransom for it. The bank reportedly has until May 10th to pay the unspecified ransom. The potential implications are severe as Banco de Venezuela has over 21.7 million accounts. As the clock ticks down we’ll keep you posted.

 Now, let’s go Down The Rabbit Hole…

 Chapter 8, “Free Gas”…

 As an investor I always thought it was important to own some stock in a major integrated oil company which in my case is Exxon Mobil. I call it my oil insurance (a term I stole from Dan Ferris). Sometimes it’s a better investment than others but it’s kinda’ like owning gold (I have some of that too). I sleep better knowing I have it. Since a large percentage of the world’s oil passes through the Strait of Hormuz, which is controlled by those lunatic Iranians (a Maduro ally, by the way), they can cause the strait to be closed and the price of oil could skyrocket overnight. As such, I’ve followed the oil market for years. I thought I knew a little bit about it until I moved to Venezuela.

 We already dealt with the macro situation ie; PDVSA (Venezuela government-owned oil company). This is about the micro, the lunacy of free gasoline and why it stayed free in Venezuela for so long, and yes…I said FREE, not cheap gas…FREE! When I would travel from Venezuela to the US each year and tell people I’m from Venezuela they always mention the same things, beauty queens and cheap gas. When I tell them there are more beautiful women in Venezuela, per capita, than anywhere else in the world they’re never surprised. When I tell them that gasoline is free their response is always the same, “You mean cheap, right? Come on…It can’t be free…can it?” Well, I don’t know about you but I consider one ten thousandth of a cent per liter free gas.

 I began traveling to Venezuela in the mid-nineties and gasoline wasn’t always free but it was always exceptionally cheap. Politically it always made sense to mollify the population with cheap gas. Cars might be expensive in Venezuela but if you had one you never had to worry about paying for gas. The only price increase in recent years (this was written in 2019) came in 2016. Maduro was already a de facto dictator so he didn’t care about the political consequences of a gasoline price hike. In one shot he bumped up the price of 91 octane by a whopping 3,000% and 95 octane (we don’t even have 95 octane in the US) by 6,000%.

 Sounds like a big deal until you do the math. Let’s use 95 octane for an example.Remember, in 2016 we were using the bsf, the fuerte bolivar, not the subsequent bsS, bolivar soberano, and certainly not the old bolivar. Anyway…here’s how it breaks down…

 One liter of 95 octane – 6 bsf

 Approximately 55 liters for a tankful in the trusty old Toyota

 Exchange rate at the time was about 1,200 bsf per dollar

 So you can see, even with the big bump I could still fill up my tank for a quarter! And that was when it was expensive! Maduro’s economic mismanagement would eventually make the price of the above referenced liter $0.000001 (6 bsf/liter with the exchange rate of the new bsS , the one that lopped off 5 zeros from the bsf, at 6,000 bsS/dollar). To leave the subsidized price that low must cost a fortune, right? Yes, it does.

 More tomorrow….

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