Monday, January 28, 2019

Pushing the nuclear button

That is it, the nuclear option has been activated!

On January 6 I was writing
"...The regime will HAVE TO dissolve the NA because this one has the nuclear option. Already since 2015 the NA has warned the world that lending money to Maduro was at their own risks of never recovering it since the NA not having voted on new debt this one is not valid. Now it gets worse, since Maduro is not the recognized president, his signature will have no validity for any act. ANY."
The time has come.  But note that it is not the National Assembly that has pushed it, since it does not have ways to enforce it. It is the USA that has pushed it today.

What is the "nuclear option"?

By recognizing Juan Guaidó as interim president of Venezuela the path is legally open to those countries that wish it so to transfer control of Venezuelan assets to the NA presided by Guaidó.  In other words, it is one way to starve the regime of the little cash that still sustains it.

This is exactly what the USA has done today by blocking the accounts of CITGO, the main source of cash for Venezuela.  CITGO can keep buying oil, refine it and sell it, but all receipts are blocked in the bank until Guaidó figures out a way to use them.

It is the nuclear option because the regime is deprived of cash, in particular the cash it needs to keep looting the country and pay those of which it needs support to remain in office.

What can Guiadó and the NA do about it?

Even if you control the cash that does not mean you can use it. For example one thing the interim administration could do is to bring in humanitarian help that it can pay for. But when ONGs brought help in the past the regime was quick in stealing that help and distribute it as it were from them.  Though I suppose this time around with all eyes on Venezuela maybe the regime will not put a stop on bringing in help. But I doubt very much as the regime will always be the scorpion on the back of the toad.

Still, the NA assembly can start preparing its financial future once Maduro leaves office.  One can always be optimistic, no?

What effect will the sanctions have?

It can be very dramatic.  To begin with Maduro imports from the USA a large chunk of gas.  Unless it can find a source of cash elsewhere it cannot use CITGO to pay for it.  This will bring down all commerce and distribution and crash whatever is left of the country production.

The point here is that the previous sanction were against chosen individuals, and blocking emission of debt in the US. But the regime has always been able to buy in the US what it wants: it just needs to pay in cash.  What happens now is that it will have no cash unless Russia and China bail Maduro out.  And I am not sure they want or can do it.

Can Venezuela sell its oil elsewhere?

Sure but it will not happen immediately. You should keep in mind that Venezuela has a certain type of heavy crude that cannot be processed just anywhere.  Also other oil companies willing to help Venezuela can only do so if they have no business deal in the US so as not to risk sanctions.

But what makes this really bad for Maduro is that the US is almost half of what Venezuela gets in income.  Replacing clients in that amount is not something that can be done in a few weeks, the more so with oil tending to be over market needs.


Will the Venezuelan people suffer out that action?

Of course, but in truth it does not matter.

The recent rioting has taken place in poor areas, while more middle class areas, who put the body count in 2017, have remained quiet.  And yet the repression has been truly ferocious this time around (even children have been jailed).  The reason is that the regime cannot afford that its geographical base revolts against it.

But think about it for a second: if the lower class areas are revolting IN SPITE all of the social programs like the food CLAP program, do their lives will be made much worse with the taking over of CITGO?

The nerve is there. Yes, our suffering will get worse, but not as much as the dumb self righteous left may think.  Guaidó will convey effectively the message that once Maduro is out and fair elections are on the way, he will distribute food in more quantities since corruption may consume as much as half of the money earmarked for food subsidies.  And people know that it cannot get worse than what it is now. Because worse, that is no food distribution, is already happening in some areas.

What is next?

The very strong sanctions taken by the US today are just the opening salvo.

As soon as the European Union recognizes Guaidó next week end, it will be able to take sanctions and pass all assets to the hands of the NA.  By the way, Japan and Australia, I understand, have recognized Guaidó today.  There is no else left besides Russia and China to lend money to Maduro.  The middle East states are not known for their generosity. The more so that Israel has also recognized Guaidó and surely offered the Mossad to help a future government against all the infiltrated guerrilla in Venezuela.  Yes, Hezbollah supports Maduro.

Maduro has this stark choice: keep its grip in power and send Venezuela to the dark ages, or resign.  If he dares the first option, then all hell breaks lose on Venezuela.








14 comments:

  1. Boludo Tejano12:40 AM

    Maduro has this stark choice: keep its grip in power and send Venezuela to the dark ages, or resign. If he dares the first option, then all hell breaks lose on Venezuela.

    Marcos Pérez Jiménez, when faced with armed conflict or resigning in 1958, replied, Y no mato cadetes. (I don't kill cadets.)

    Recall that Chavez invited Marcos Pérez Jiménez to his inauguration in 1999.

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    1. Yes, but Maduro is a spineless criminal, MPJ was very different, a benevolent dictator if you will. Sure, he stole, killed a few a tortured a few, but nothing compared to Chavismo. (Not to mention he built in 5 years most of the infrastructure you see in Vzla today and the economy was stronger than EVER)

      I doubt Maduro will resign, where is he gonna go? Cuba, Mexico, Russia? Even if he's amnestied, he knows the risks: jail. Perhaps the 5000 troops expected at the Colombian border and the Marines Seal team 6 are watching tape of the assault on Panama's Cara e' Piña Noriega.. Wouldn't that be sweet..

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  2. My comments on the previous post still apply. Maduro will have to choose between leaving horizontally or vertically.

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  3. What forces are at work in the country that has stopped the regime from arresting Guaido as they would have in the past? Why was Sebin's hands slapped for delaying him for 4 hours? It is challenging to understand the truth about what is going on when the media clearly has a poor understanding of the situation and only report what they are lead to believe.

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  4. People keep saying cutting the oil revenue will nuke the regime. Sure, it will hurt them, but they'll find ways to get the cash to continue bribing the entire armed forces, FAES, SEbin, GNB, and the military. That's the only thing that matters to them, as long as they have their support, they can stay in power, especially with about 4 Million public employees on Maduro's payroll. They'll cut down on other expenses, the people can always suffer more, see if they care..

    What no one talks about is the GIGANTIC Drug Trade Revenue. That's billions in cash right there, who knows how much, probably MORE than what the oil revenue was. They'll just focus on that even more. THAT is where the money comes from to feed the corrupt armed forces and the 3000 "generals". That and the other scams: the Food Guiso, the Financial Guisos, the Customs Guisos, the Gold Guiso, etc, etc.

    But the elephant in the room that for some reason no one talks about (guess it's because few have any information about it) is the Massive Drug Trade. Some say 80% of ALL the drugs on Planet Earth go through Kleptozuela, by air and sea, then through the Caribbean Island to the entire world USA, Europe and the Middle East. The operation is astronomical. It's a Narco-Estado, and the main source of income is DRUGS not oil.

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    1. My guess is massive drug revenues but the drug lords don't share real well.

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  5. Daniel: it must be killing you to know that The Donald and the USA is saving Venezuela's ass and not your beloved Obozo. Ha !

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    1. 1) Maduro ha not been killed yet
      2) let's see if Trump is still president by the time Maduro is kicked out.

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    2. Boludo Tejano7:20 PM

      Compared to Caracas Chronicles, Daniel has been fairly reasonable. Daniel has criticized some of Obama's Venezuela policy. CC? Minimal- if any- criticism of Obama's policy.

      CC's Francisco Toro has at CC and also at the WaPo written such articles like "Is Trump like Chavez- or is Trump like Maduro?"
      I'm not going to say that Daniel has never criticized Trump, but it hasn't been on the non-stop basis of CC, and Daniel has also on occasion praised some acts of Trump.

      CC featured an article that a Colombian wrote in favor of the election of Gustavo Petro. You know, the Gustavo Petro who considered Chavez a "great Latin American leader." You know, the Gustavo Petro who tweeted in 2016 that the food shortages in Venezuela were falsehoods- and to prove that tweeted a picture of a grocery chain based in Puerto Rico and the Dominican Republic. You know, the Gustavo Petro who tweeted that the July 30 2017 Constityuente "Vote" was an"opportunity not for revenge but for dialogue and an opening" Funny thing is that Gustavo never made any comment about the million plus fraudulent votes from July 30.

      Daniel would NEVER support the election of such a Chavez fan. But CC featured an article that did.

      Daniel has his own, idiosyncratic voice.




      https://twitter.com/petrogustavo/status/891685396035383296/photo/1

      July 30 2017 "election" for the Constitutional

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    3. I'll be darned Boludo! I never expected such praise from you.

      But I have no particular merit, I just hold onto some basic principles and I do not suffer fools. The rest happens by itself. :-)

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    4. Boludo Tejano4:48 PM

      One time you wrote a ringing denunciation of an Obama foreign policy decision. My reply was that as you supported Obama, you got what you paid for. In my opinion, anyone who had learned about Obama before the election could have predicted such decisions. Such as this passage from Obama's Dreams From my Father:

      To avoid being mistaken for a sellout, I chose my friends carefully. The more politically active black students. The foreign students. The Chicanos. The Marxist professors and structural feminists and punk-rock performance poets.

      It should come as no surprise that those who seek out Marxist professors will later make Marxist-oriented decisions. You did not appreciate my reply, to say the least.

      I learned Latin American politics from family friends who were friends of Camilo Torres. My experience in Latin America, and also reading books like Rangel's Del Buen Salvaje al Buen Revolucionario (purchased in Anaco)led me to the conclusion that those friends of Camilo Torres were sadly mistaken in their views of Latin America- as Camilo Torres was sadly mistaken. Unsurprisingly, their "progressive" opinions on the US didn't stand up to my examination, either.

      The tales that a childhood friend had of working for the Kennedys at Hyannnisport didn't exactly maintain my adherence to liberal politics, either.

      Whereas you reacted to Jesse Helms.

      Your tales of living in the belly of the Chavista beast make great reads, though they are difficult experiences for you.

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  6. "The nerve is there". Reminds me of an old expression I learned between naps on school benches: Le nerf de la guerre.

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  7. Bolton of the USA keeps saying that nothing better happen to Guaido or else swift and decisive action will be taken. Anyone have a clue what is left that the USA can do given it will not invade?

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