Friday, February 08, 2013

In the "shit is about to hit the fan" section: January inflation at 3.3%

I was musing yesterday about possible election dates. Today's announcement of a January inflation of 3,3% indicates that elections in March 17 are becoming a higher probability. Let's see.

First, you need to understand that the 3,3% number IS LOW. The Venezuelan Central Bank, BCV, has stopped emitting real numbers and uses the trick of controlled prices to diminish the real inflation number. That is, whatever good at controlled price is sold above that price is simply not recognized. As such the real inflation number for January could be as high as 5%, if real street value was recognized.

Second, to confirm this point, the BCV admits that the inflation on food items alone is a staggering 5,3% which may mean that either the BCV is starting to consider street value more seriously or that the inflation outside of controlled goods has reached an unspeakable number.....

Third, there is also a scarcity index published and this one in January zoomed to 20,4%. That means that for each 5 basic staples you go out to shop for you will find only 4.

Last, but not least, for a government that was eager to publish "favorable" early inflation number during last years campaign, February 8 is a rather late date. Which means that they probably tried to soften as much as possible the blow.

And the story is also that all these negative numbers have shown an overall worsening trend since last quarter.

And guess what? The sector hit frontally with these numbers is the one voting for Chavez. Well, at least who used to vote for Chavez. There is no way that these economic numbers can show a significant improvement in February or even March. They spent all of their money to reelect Chavez and pick 20 governors (accidentally some of them). Now apparently other bail out chums are not as willing to bail them out unless they see Chavez personally back in office or at least offering personal assurances that the bills will be paid. There is even rumors of some of them asking for Venezuelan gold reserves as collateral...... which I personally doubt it to be possible but I thought I'd share.

An early election has to be as early as possible and as such I am starting to think that Chavez death or resignation will be announced in the coming days so that election can be called for March 17.  Elections in April or May are looking every day more difficult for the regime if it wants to win at least as "fairly" as it did last October. And for what we have seen in recent weeks there is all to suspect that the regime is ready for major electoral fraud.

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