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.