Banana Republic Newsflash

[SciFiFisher]

According to them, Inflation was 141% on the third quarter last year.

Yes, but it was a dry inflation (you know, like a dry heat.....).

Right, I'll have a beer to celebrate that

Next time one of your right wing nutjobs complains that Obama or even Bernie Sanders is a crypto-communist let them ten minutes in the same room with this guy.

Here in the U.S. even our left wing nut jobs seem sane by comparison to the rest of the world.

[Sigma_Orionis]

According to them, Inflation was 141% on the third quarter last year.

Yes, but it was a dry inflation (you know, like a dry heat.....).

Right, I'll have a beer to celebrate that

Next time one of your right wing nutjobs complains that Obama or even Bernie Sanders is a crypto-communist let them ten minutes in the same room with this guy.

Here in the U.S. even our left wing nut jobs seem sane by comparison to the rest of the world.

Naww, The actual nutjobs hide because most people there would probably lynch them. Your RIGHT wing nutjobs on the other hand......

[Sigma_Orionis]

About a hundred posts ago Fisher commented something about Private Capital fleeing the country.

get a load of this

Did you know that Venezuela’s private sector has a net foreign position of around USD 147.5 billion abroad? If not, check BCV’s website in Balanza de Pagos and “Posición de Inversión Internacional”. Granted, we don’t know what portion of this money is liquid or easily convertible to cash, but this is private sector money, from Venezuelans. From the middle class professional that fled to Miami to the richest businessman running a successful transnational. This position has increased by more than 550% since 1998, precisely because so much capital has fled the country.

As for the state of our Oil Industry.

With the Venezuelan oil basket selling well below $30 per barrel, PDVSA – which generates 96 out of every 100 US dollars coming into the country – will not be able to provide the greenbacks needed to get our precarious economic system (corruption included) functioning. And the company – due to under-investment, poor incentives, lack of maintenance and other factors – doesn’t have the technical capacity to significantly increase its oil output overnight.

Edited to fix dumb mistake on the first line.

[SciFiFisher]

Well.... there is another option. But, it's virtually impossible. Whoever is in charge would have to suddenly start acting like they want a stable country with low inflation and a solid economy. Then they would have to convince the IMF to help them re-finance all their debt. And use the dollars they recoup from that to finance rebuilding their petroleum industry so that it could really increase production, productivity, decrease relative costs, and boost exports.

And if you believe that is going to happen I have a rainbow unicorn I can sell you for a very reasonable amount of gold bars.

[Sigma_Orionis]

The other option is to declare war on the US

[hap]

...Then they would have to convince the IMF to help them...

Someone call James Phelps, or maybe Ethan Hunt...

[Sigma_Orionis]

...Then they would have to convince the IMF to help them...

Someone call James Phelps, or maybe Ethan Hunt...

And activate the Ghost Protocol

[SciFiFisher]

The other option is to declare war on the US

The Mouse That Roared!

[Sigma_Orionis]

Yup, except that the folks at Grand Fenwick were smarter than us

[Sigma_Orionis]

I guess the Russkies have less tolerance than us....

Polls suggest that Mr Putin remains popular but the full force of the crisis has only started to hit home, and he can no longer keep putting off the choice between guns and butter. Real incomes have dropped by 9.8pc over the last year. Food prices have jumped 17pc.

Ivan Starikov, the former deputy economy minister, said the true inflation rate is near 30pc. “We are rapidly approaching the fateful mark where of 50pc of the average Russian family's income will be spent on food. We have again become a country of poor people,” he said.

50pc of your income spent on food? allow me to laugh.

And now, we have an act of contrition by a PSF

To My Chavista Friends

You'll excuse my lack sympathy for this idiot. He's at least 8 years too late.

[Sigma_Orionis]

What do you know, someone in Latin America that understands Sarcasm

Financial News from a Parallel Universe

[Sigma_Orionis]

If this is true, now we'll have the icing on the cake: More Electricity Rationing.

[SciFiFisher]

If this is true, now we'll have the icing on the cake: More Electricity Rationing.

ouch! Does that mean you may or may not have to train a monkey to power your generator?

[Sigma_Orionis]

If this is true, now we'll have the icing on the cake: More Electricity Rationing.

ouch! Does that mean you may or may not have to train a monkey to power your generator?

More like a couple of squirrels. Monkeys wisely stay down south in the Amazon

[Sigma_Orionis]

Oh Man we're so screwed

[SciFiFisher]

Oh Man we're so screwed

If you only knew... wait. you do.

Saudi is not going to let prices come up for 2-5 years. Why? Because it costs the Saudi's about $3-5 dollars per barrel to produce their oil. To produce U.S. shale oil which is a lower quality oil than that of the Saudi's costs approx. $20-$25 per barrel. I think you can do the math. I believe that Venezuela is collateral damage for the most part. The second factor of many is that the Saudi's want the newly lifted sanctions on Iran to be less profitable. If Iran was able to suddenly start selling their oil for $80 per barrel their ability to become even more of a threat to the Saudi's and their allies would have been exponentially increased. At $25-$30 per barrel it's a lot less influence and suicide bombers that can be bought.

In a sense the Saudi's and their friends are in a position to outlast the opposition on the price of oil. It will be painful. The Saudi government has already taken steps to mitigate those effects. but it's still going to hurt. But, they are betting that they can weather the storm better than their opponents.

[Sigma_Orionis]

Of course we're collateral Damage. Hell, the Russkies are probably (although I'm pretty sure nobody at your State Department is weeping ) collateral damage too. THIS is exactly why you don't base your economy on exports, particularly commodities. It has happened many times in South America since the 19th century. It has happened to us at least twice. No matter how hard the chavistas try, they won't be able to get away from this one. Hell, supposedly the disaster caused by the 80s oil glut was never going to happen again, that was one of of the reasons they got elected .

A couple of days ago, our health minister had the gall of saying this:

Last week, Health Minister Melo claimed that the shortage was due to Venezuelans “irrationally consuming medication.”

My dad's closet chavista sympathies evaporated in the last month (surprise), when he heard that, he said "why can''t they just admit that we're out of money?" I answered: "because then they'd have to explain what happened to almost US$ 1 trillion we got from the commodities boom".

A few years ago, on FWIS1, While I was complaining about how impractical we were, Russ told me he didn't find any difference with any other country. Now you know the difference. We literally let the patients run the Asylum.

[geonuc]

The Washington Pot has a not-so-rosy article:

https://www.washingtonpost.com/news/won ... p_1=268845

[Sigma_Orionis]

Read it. The only thing I am not so sure is accurate, is the year in which the author claims the Chavez government started pumping inorganic money into the economy. 2005? I think it's more like 2007/2008. Other than that. It's pretty much an accurate account of what happened.

[Sigma_Orionis]

Inflation-Wrought Venezuela Orders Bank Notes by the Planeload

Couldn't read the whole of the article because I don't have a subscription to the WSJ. Here are some comments

Printing Error

Sounds too crazy? this week I took my father to the bank to get his pension, they couldn't give him the money (about 9600 Bs) in 100 Bs Bills, just 50s and 20s

[SciFiFisher]

Inflation-Wrought Venezuela Orders Bank Notes by the Planeload

Couldn't read the whole of the article because I don't have a subscription to the WSJ. Here are some comments

Printing Error

Sounds too crazy? this week I took my father to the bank to get his pension, they couldn't give him the money (about 9600 Bs) in 100 Bs Bills, just 50s and 20s

Did you bring a wheelbarrow?

[Sigma_Orionis]

Nope, but I'm betting that next month, when the give the payment in 5s I'll have to

[Sigma_Orionis]

We're known for having large reserves of heavy, hard to refine oil. Turns out that not only our heavy oil is hard to refine, our much smaller light oil reserves are not easy to tap either. Take a look a this:

Oil's dark secret

Partly because of geology and partly because of their age, Venezuela's fields require a lot of maintenance. The oil they produce is more viscous and acidic than the norm, and so harder to handle. Less than a tenth of the fields simply spout oil thanks to the natural pressure of the reservoir. Keeping the remainder flowing requires constant injections of water or gas. Even so, their output declines at roughly twice the pace of oilfields in the North Sea. Venezuela has to add 400,000 b/d of new annual production capacity just to keep output stable, according to Mazhar al-Shereidah, an academic.

And regarding our former most important export:

Built with slave labor, the industry here became the mainstay of Venezuela’s colonial economy. For centuries, the nation was the world’s top producer. European monarchs sipped concoctions made from Venezuelan cacao.

Then, in the 20th century, there was oil. Dictators came and went. Venezuela, despite its vast fertile lands, became a net food importer. The legendary strongman Juan Vicente Gómez seized cacao plantations in this forest and made them part of his personal empire.

Bureaucrats later assembled a monopoly over the industry, eroding incentives to produce high-quality cacao. Yields plunged. Still, cacao cultivation survived, attracting growers obsessive enough to weather policies bedeviling exports of anything but petroleum.

Venezuela is widely known as a difficult place to do business. But the peculiar resilience of the conflict-ridden cacao trade is evident from a ride on a fisherman’s skiff to Chuao, an isolated forest village founded in the 16th century that knows a thing or two about the cycles of Venezuelan history.

Chuao’s cacao hacienda was first expropriated from the Roman Catholic Church in the 1820s by Simón Bolívar, the region’s liberation hero, and given to a university. Then one dictator seized it, then another and so on, until a civilian government handed control to a worker cooperative a few decades ago.

Since then, its yields have languished, even though the cooperative employs perhaps triple the number it would if it were owned by a private company. The members of the cooperative are poorly paid, earning about $3 a day. One sun-drenched day in July, some members sprawled in the shade near the church patio where cacao has been dried for centuries, taking a nap.

But those same workers produce what some consider the world’s best cacao. The key, agronomists contend, lies in their adherence to methods used for generations.

One cooperative member, Clemencia Bacalao, 49, smiled into the sun when asked what Chuao would be like decades from now when the oil age finally dims in Venezuela. “We’ll be doing what we’ve always done,” she said. “We’ll be relying on cacao for our survival.”

Great. All the stuff we produce that could generate enough income to keep this country afloat, requires a lot of effort, supposedly more effort than in other parts of the world. The statements: "The World's Largest Oil Reserves" and "The World's best Cocoa" have major, MAJOR asterisks with disclaimers. You'd think that would have fostered a culture of people who were good problem solvers, who could not only find alternative solutions when the proper one simply was not possible (in a twisted way it has) and who could think ahead and be able to foresee problems and solve them before they became a major issue. In reality it has fostered a culture of extremely high tolerance to incompetence and inefficiency. Why? if you ask me, because our elites (no matter where they were born, nor their ideology) really never gave a damn. And, it has happened probably since the days of the nomadic tribes that lived here before the Spaniards came (notice how we never had any major urban native culture like the Mexicans had the Aztecs, the Centro-Americans had the Mayans and the Olmecs and further down south, the Peruvians had the Incas?). In my opinion, our culture systematically stifles and alienates anyone with such skills. So it really doesn't matter who comes after Nicky Ripe, this country will be a basket case till the Brazilians decide to flex their muscles (which BTW, at the rate they're going, it's going to be a long while). Then it will simply a part of Brazil.

Edited to fix dumb mistake.

[SciFiFisher]

In my opinion, our culture systematically stifles and alienates anyone with such skills. So it really doesn't matter who comes after Nicky Ripe, this country will be a basket case till the Brazilians decide to flex their muscles (which BTW, at the rate they're going, it's going to be a long while). Then it will simply a part of Brazil.

Not long ago that might have been a good thing. Who knows? If you like I can have a chat with an unnamed agency who won't acknowledge that I exist about having Brazil annex Venezuela.

[Sigma_Orionis]

Right, Fisher the Spook, let me guess, yer middle name is Lynch