Friday, January 22, 2016

Emergency decree is down. We may be the better for it

A little bit busy these days so I will be fast.

The regime tried to force through an "economic emergency decree" which was a mere diktat to make communism a reality in 60 days. You could read it all here, before most pundits tired to think about it, or worse, to pretend that there was some redeeming value somewhere. Usually pundits from brainy places like Forbes who can only think about a return on an investment that they were foolish enough to give to a country whose bloggers were active and announcing disaster since 2003. But I digress.

Since everyone knew that this was a mere propaganda ploy to try to put the blame of the crisis on the opposition (a mere trap Castro style), the Assembly majority MUD organized the only response it could do for the time being: call for hearings knowing they would be stood up. This was very simple to get because the Assembly decided that the hearings should be open to the press like it happens in EVERY democracy on earth unless it is about national security, as in ISIS about to bomb you. But apparently the state of bankruptcy of the nation is such that it cannot be revealed in public. Thus the ministers use that excuse to bail out at the last minute. Score 1 to 1 on propaganda. And I am generous to the regime.

The parliamentary commission named to inquire on the decree ruled that without economic data, that without at least announcing some the of the expected measures to be taken (the decree had no specifics) the emergency could not be approved. The following full debate today pointed out among other things that the country had been ruled by chavismo through 17 years, and that there had been enough enabling laws to emit enough decree laws for the regime to deal with whatever it needed to deal with. The emergency decree was thus duly voted down. The government was welcome to send in new and more explicit proposals and they will be speedily examined. And that is that.

Now what?

I am not sure what leverage the regime got out of that wrestling match. Probably some, there were enough idiots that though the national assembly would open the gates to cheap and abundant corn flour. But me thinks that those who voted for the opposition MUD in December knew exactly why they voted for them and hot air from the regime is not going to play much if actually some stuff does not appears on the shelves soon. Period. After all, they have been used to abundant freebies for years coming from Chavez. If then, why not know? Why not for the last two years? If the "economic war" cannot be won by Maduro maybe, just maybe, he should be replaced by one that can win it. No?

The fact of the matter is elsewhere.  The regime has no idea what to do and I can vouch for that. Many clients and providers have been summoned to many meetings in recent days. Hysteria grows by the day. To give you an example, one of them told me that they got an urgent mail from ministry X to send them in 24 hours a list of what they could start exporting as soon as possible so the permits could be processed fast. Without inquiring about the supplies and dollars they would need to be able to produce enough for the local market to then be able to export..........  [sigh, deep sigh.... shit like that does not appear in economic pages, just in blogs].

So the regime tries to blame the opposition and the janitor and his dog.

But no matter what, the reality is there. In my opinion default is unavoidable because there is no money to pay what needs to be paid this year EVEN if oil were to go back up to, say, 35 USD a barrel by fall. Even starving Venezuelans will not avoid default AND allow at the same time to send Cuba whatever meager allowance can still be sent. Maduro and Cabello and Padrino can refuse to visit the National Assembly, and close it, and send the MUD representatives to the execution wall, that reality is not going to change. What needs to change is the economic system but any change is impossible because the regime would unravel in weeks.

The question is not whether Venezuela is going to the IMF, but when. There is nowhere else to go at this point.

Of course there might be those who think that PODEMOS in Spain or Correa in Ecuador or Evo in Bolivia are going to come and bail us out. Bwahahahahah.....

So I feel good tonight because I read this whole week as getting us close to the end. Whatever the end is, it cannot be postponed much longer. Just go and visit a grocery store.


  1. Default is the decent think to do. The country is approaching famine, people are dying in large numbers due to lack of medicine, and those bonds can be paid off after a hair cut.

    The situation is so bad it may be prudent for the National Assembly Commissions to start calling in ministers one by one all over again. Set it up with 5-10 outside participants to serve as witnesses for the people, have questions and answers checked and edited by the National Assembly before they are released to the public if THEY think that's advisable.

    I'll give you an example, when they ask Eulogio del Pino about the oil industry they should ask "for 2014 and 2015, what was the share of national oil and gas production produced by joint ventures PDVSA owns together with other companies such as Total, Chevron, Repsol, Statoil, Rosneft?" This isn't a state secret, I have an idea of what it should have been, and everybody in the business knows those companies own shares in very large joint ventures. But he Venezuelan people really do need to understand the oil wasn't nationalized, and the country owes huge debts to those corporations (for various reasons). If pdvsa doesn't come clean and set up a mechanism to pay back what it owes there won't be much foreign investment by players who have the technology and the cash. So this is an item the people do need to factor in. Sometimes I even wonder if more educated Venezuelans realize the mess pdvsa is making in the faja (the oil reserves are probably being destroyed by their production methods). All of this needs to be aired out, with emphasis on the fact that Venezuela's oil wasn't really nationalized, that foreign companies are entitled to a large volume of reserves in the faja, and that Venezuela will probably have to change the law, introduce Production Sharing Agreements, and provide incentives for companies to invest. The capital needs exceed $100 thousand million, money pdvsa doesn't and won't have.

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  3. President Correa blows hot air saying he supports Venezuela, but the fact is he has his own problems. Many people here dislike what he has done with the budget. adding taxes, changing provisions of the constitution with the people not voting for them. The list is quite long!

  4. "I am not sure what leverage the regime got out of that wrestling match."

    Not much, of course. But what many people often fail to notice is that the Criminal Regime is just preaching to its own choir: They know that the 7 million that voted against them, the majority that is pissed at them is unrecoverable now. They are not trying to fool or convince THEM.

    But do we forget that even Madurismo still received Millions of votes, over 30%, and that the general populace still is predominantly Chavista, yes, today, over 65%, I guestimate, ADORES Chavez and Chavismo. Today.

    THAT is the Regime's Target Audience. They don't give a flying fock anymore about the opposition, the clear-cut anti-Chavistas. They are feeding this stupid Economic War propaganda to their own. Because that's all they need to stay in power, and possibly Steal the Presidential elections in 2019, or at least camouflage their way into the Mud, Chavista light, and keep stealing for a few more years, while they figure out an Escape Plan. Remember, these are Criminal Thugs. Incriminated in drug traffic and/or gigantic embezzlement. They risk serious Jail time and frozen assets if Chavismo falls abruptly. They need time for obscure negotiations... to be pardoned.. to blend in the muddy MUD.. That's what Aristobulo and his Buddy Henry Derwick Allup chat about all the time..

    To the 5 Million Enchufados in 37 "Ministerios", to the 10 or 15 Million hard-core Chavistas, this stupid "decreto de emergencia economica derogado por los Burguesitos Pelucones de la Derecha" will have some meaning in the future, as the economic situation gets even worse the next few years. Chavismo will use their last PDVSA and Narco Dollars to fuel the propaganda machine, with the Media they still control. Massive Brain-Wash will continue, even grow, as the social hardships of every day life get even tougher, as oil hits $20, the Dollar hits $1200bs, and inflation hits 700%. No more Chinese Mega-loans. Do the math..

    SOME of extremely ignorant Chavistas will believe that the Massive Crisis, much worse than today's crisis, is at least partially attributable to the MUD, that does not want to work with Chavismo to fix the mess. 'El Pueblo' has a very short memory. They are not educated. They already forgot 12 years of Chavista disaster, when their current Idol, a dead pajarito, was in full control. Se les olvido. La culpa ej de Maduro y Cabello.. See, they don't know a whole lot about basic macro o even micro-economics, many still think Cuba is a paradise..

    Granted, even within the 5 million Enchufados of the Regime, many don't believe their own Galactic Lies, but they play along. As long as the Mega-Guisos keep coming. All they need is Minimal public support. A minority of brain-washed Chavista "Pueblo" people suffices for their immediate purposes. Plus the support of the Military, Polize, Zebin, Guardia Nazional, and the putrid TSJ, of course. Add to that a few dozen MUD deputies who will Certainly be Bribed, and they'll be fine.

    Some people even talk about Maduro or Cabello resigning, or a referendo revocatorio.. Where are they gonna flee, to New York, FBI headquarters, or La Hague? Where are they gonna hide they stolen Million$ ? Referendo? They would need more votes than Maduro got, over 7 Million, CNE is still totally corrupt, this time they would make sure to steal the "referendum" by 300 votes short..

    So I tend to disagree, their Machavellian, aberrant propaganda will work to some extent, among their Target Audience, for their vicious, temporary purposes. The MUD will be blamed, just wait until a catastrophic 2017..

    1. Next big step by the regime will be to start cancelling social programs blaming the MUD. They will use their media to preach the we told you they would not care about the poor.

  5. "The question is not whether Venezuela is going to the IMF, but when. There is nowhere else to go at this point".

    Right. And I bet the Criminal Regime is already starting to consider the IMF in the shadows, seriously. It's a no-brainer! They'll keep on drilling that Oil is down (oh poor babies..) and the Capitalista MUD doesn't let them govern and fix things "para el pueblo".. So come 2017, or even earlier, having no other choice, they negotiate some deal with the IMF, get a few Billions, to stay in power and steal a few more years.

    Then they'll say " I told you so !!" We told el pueblo that the Capitalists Imperialists would sell the country to the Gringos and the FMI, and "for the good of the people", with such low oil prices and overall Guerra Economica, "we have no choice but to accept some relief by the FMI". Perfect.. huh.. the blame shifts more and more to the MUD, and they get the Billions, still controlling 4 out of 5 powers, plus the Military. Then they'll blame Oil prices, the MUD and the Imperialista FMI.

  6. If Venezuela needs to start anew, that could be a huge advantage. Japan and Germany after world war II were able to rebuild with advanced technologies that gave them competitive advantages. Let's look at Venezuela with a "half-full" perspective.

    1. Boludo Tejano9:12 PM

      Several days ago I coincidentally ran across this video of Berlin in July 1945. Two things impressed me: the devastation and the industriousness of the populace in dealing with the rubble.

  7. Anonymous5:35 AM

    Daniel, just listened to your podcast... you never told us your voice was so deep and sexy

  8. News article last thursday: Venezuela Hits "Point of No Return" - 2016 Bankruptcy Is "Difficult To Avoid" According To Barclays.

    In the last two paragraphs the article ends with this: "Which is good news for those who buy CDS. Our only hope for those who have held so far is that the counterparty you will have to novate with will still be around once the sparks fly, because once this first OPEC member goes bankrupt, things will start moving very fast.

    Finally, for all those who are praying for an oil bounce, your day may be near, because nothing will send the price of crude soaring quite as fast as one entire OPEC nation suddenly entering a death spiral of chaos."

  9. Has something happened to Daniel? He is our source of knowing what is happening in Venezuela. We live 8n the jungles of the Venezuelan rainforest in the state of Amazonas.

  10. Roberto Carlos10:16 PM

    I am going to make a prediction that the next time we hear from Daniel he will be writing from exile.
    Two possibilities US West Virginia where he will immediately start to work for the Sanders campaign or his native France where he will work with the organizations providing aid to the arab refugees. Regardless of his destination there is no doubt he will work tirelessly to bring his new homeland to the same standard of living of the Venezuela he left behind.

    1. Carlos your ignorance goes so far as to be entertaining at times. Not sure at times whether you hate Daniel so bad that your fixated on his site and your lame responses to his posts or if your just simply a lunitic....


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