Tuesday, November 11, 2014

The Regime's finely honed art of lying: Marcos Torres and the non-devaluation news

Look, indicators are in deep red but we are groovy!
One must be in awe at the news this morning, reflecting an interview of our top economic minister to the the top chavista talk show.  General Marcos Torres who is now the one in charge of all the money in Venezuela has given a gravity defying performance, helped by Jose Vicente Rangel, the worst courtier of the regime. But there is already a clear interpretation beyond the words of the General. One, the regime is already hard into an electoral campaign that may come sooner than expected and two, as a General we can only by charitable by supposing he thinks the economy is just like the barracks; he gives orders, people obey, results are predictable.

To make sure you do not think I am making up what follows then, I will take my sources from two pro Chavez papers, Ultimas Noticias and El Universal. Also I am not going to comment on this as a financier which I am not but as a business person at ground zero.

The first thing that even Ultimas Noticias notes is that JVR was careful not to ask about Inflation, GDP drop or shortage index. Thus the interview was going to be all good news...

- "Hay garantías de que nosotros vamos a mantener, de verdad, ese sistema cambiario de forma tal de cubrir todas las necesidades del país. No está planteada ninguna devaluación. Seguiremos trabajando con el 6,30 (bolívares por dólar ), con el Sicad I y el Sicad II".
There are guarantees [!?] that we are going to maintain, truly [I kid you not], that foreign exchange system in a way to cover all the country's needs. No devaluation is in the works.  We will continue to work at 6.3 to the dollar and SICAD I and II.

Back from Europe I KNOW that 6.3 is unsustainable. A little bit as if Obama were to decree that with a quarter you get now 2 euros... I need no MBA for that, just to pay my bills.

- “Estamos efectuando reuniones con el sector privado, con el empresariado, vamos a las empresas a ver las debilidades y fortalezas, esto nos permitirá fortalecer productividad, no con el sector especulador, acaparador (...) Vamos a direccionar las divisas para el sector productivo para el 2015”.
We are holding meetings with the private sector, with businessmen, we are going to businesses to look at their weaknesses and strengths, this will allow us to reinforce productivity, not with the speculating, hoarding sector ... We are going to directionate [chavez-speak, even more grating in Spanish] currency to the productive sector in 2015.

Where do I start?
That Marcos Torres does not know the difference between production and productivity?
That I am one of the business that has been visited, inspected, gathered, suggested, passed all trials, approved, promised to, encouraged to ask for more CENCOEX,  and yet the regime is holding more than 2 million dollars against our providers, some from February already?
That most business are limiting their importations of raw material because the refusal to allow us to pay our debts has brought us to a dangerous level of debt in case the regime would devaluate suddenly in a retroactive way as it has already happened in the past?
That without raw material there can be no production and even less productivity?
That if speculation may still be possible (and encouraged through black market) hoarding is impossible because, well, there are not enough stuff to hoard?

It is quite impressive that in a single grammatically incorrect sentence Marcos Torres reveals such an amount of bad faith and/or ignorance.

-"Ya el presidente Nicolás Maduro nos ha dado una instrucción de que manejamos diferentes escenarios. Tenemos excelentes previsiones". Already president Maduro has given us instructions that we deal with different scenarios. We have excellent prognostics. 

He needs to receive instructions from Maduro? Is it not his job to present options to the president without having to be told? Does he not realize that the need to admit that they handle different scenarios is a confession of parts that none of them is "excellent"?

The next one was perhaps the best one...

"Nosotros le decimos a los inversionistas que cuenten y confíen en Venezuela porque nosotros seguiremos honrando y cumpliendo con nuestros compromisos internacionales como lo demostramos durante todo el año 2014 y específicamente en el año 2013, donde pagó la República y pagó Pdvsa ". We tell investors that they can count on Venezuela because we keep honoring and keeping up with our international engagements as we showed through 2014  and mostly 2013, were the republic paid and PDVSA paid.

I am passing on yet another grammatically incorrect sentence, after all is just another loutish general. But I will note that his need to stress 2013 over 2014 is yet another subconscious betrayal that 2014 was not all that it was cracked up to be debt payment wise. What is graver there is that PDVSA may have paid but that is not what makes the economy work: what makes the economy work is either to pay me, who produces, or have the honesty to tell me that I will not receive dollars ever again so I can close shop once and for all.

Or put it in another way: the regime is afraid of Wall Street but not afraid of inflicting final damage to production inside Venezuela.

I need not go further, I am sure the reader gets the point. This is electoral propaganda of the worst kind, piling up lies.


  1. Anonymous2:36 AM

    "We are holding meetings with the private sector, with businessmen, we are going to businesses to look at their weaknesses and strengths,..." Yeah right. They will look at businesses weaknesses because this will tell them how best to takeover the business.

    Don't expect cooperation with business from this government.

  2. Dr. Faustus3:56 AM

    In the early first and second quarter of 2015 many of us will look back on October 2014 as the exemplary month of Chavista insanity. It all came together in one jaw-dropping thirty day period. The perfect storm. On top of stunning foreign exchange debts of nearly 15 billion dollars (airlines, manufacturers, private enterprises, etc.), and an on-going inflation rate of 60% +, the price of oil dropped like a rock. Then, ...then, the bonds came due. A whopping 5 billion dollars, and the blithering imbeciles paid it! All of it, in hard currency! I'm not kidding. Perhaps you may have spotted some of these buttoned-down Wall Street types doing somersaults down Park Ave on hearing the news. They paid? Really? 12% bonds? Wow. I thought they didn't like us? And, in the quotes shown above, Marcos Torres is proud of it! Yup. In effect saying, "We paid all of the those hated capitalists on-time and without question." Yup. So what if we're broke now, not a real dollar to our name. We show'd em, didn't we? We paid! This has gotta be a Monty Python script, ....or something. These people are nuts. There's gotta be a movie in this or something. Did this really happen? All in the month of October! The Venezuelan perfect storm.

    1. Island Canuck12:14 PM

      And to top it all off there is now a strike at the main port.
      This is heading for the perfect ending.
      A pueblo with no food & the government trying to enforce fantasy prices on goods that don't exist in sufficient quantity to meet even a small percentage of the demand.

    2. Anonymous4:08 PM

      The $5 billion bond payment was made only after the November installment payment to Castro was completed. This $1.8 billion payment is also assured before food and health care is provided to El Pueblo.

  3. "...have the honesty to tell me that I will not receive dollars ever again so I can close shop once and for all." How likely is that?

  4. There is a benefit to delaying the inevitable, like when you are offered a last smoke while facing the firing squad!

  5. Boludo Tejano4:42 PM

    Repeat after me: Democratically Elected. Democratically Elected. Democratically Elected. Democratically Elected. Democratically Elected.
    Doesn't that make you feel better? :)

    1. The last time "Democratically Elected" happened in Venezuela was 1998. The last semi reasonable electoral contest was April 1999. None of them since has been fair and most had significant to outright electoral fraud.

      Not that you do not know that, but in case a nincompoop reads....


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