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That mess in South America known as Venezuela

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We had a chance to review a couple of items at Fausta’s Blog, an excellent blog that follows U.S.-Latin America stories.

Question: How bad are things in Venezuela?  How about an oil country importing oil?  Yes, Venezuela is importing oil, as we see in Tim Padgett’s latest post:

Venezuela’s economic woes just won’t quit.

Its currency recently hit an all-time low with black market traders. Now the South American country has to ration food – and, believe it or not, import oil.   

Venezuela has the world’s largest oil reserves. But it produces mostly thick, heavy crude that has to be mixed with lighter oil to make it usable. Problem is, Venezuela’s seriously mismanaged state-run oil industry isn’t pumping enough light crude. So this weekend the country will receive its first ever shipment of foreign oil: two million barrels from Algeria.

Venezuela importing oil?  What’s next?  Import shortstops?

The second shocker from Caracas is “sort of a” devaluation, although no one is calling it that.  According to Sebastian Boyd of Bloomberg, Venezuela is forcing businesses to pay more “bolivares” for U.S. dollars:

The world’s steepest currency devaluation is happening with so little fanfare that you may have missed it.  

Venezuela is forcing companies to pay an average 61 percent more for dollars in government auctions compared with a year ago, according to estimates by Barclays Plc.

The sales are the only way most of them can get their hands on scarce foreign currency to purchase goods from abroad without access to the official exchange rate of 6.3 bolivars per dollar.   

The South American nation is seeking to ease a chronic dollar shortage caused by years of increasing government control over the foreign-exchange market and economy.

At the same time, President Nicolas Maduro may be reluctant to pursue a devaluation of the official rate out of concern it would add to the world’s highest inflation rate and deepen shortages that sparked deadly protests earlier in the year.

Again, will the Chavez-Maduro regime ever manage its country?  The answer so far is no.  Not at all!

Many of us have friends down in Venezuela.  We hear about their daily grind, from the housewife facing steep shortages to now businessmen having to pay more for U.S. dollars.

This is what “class warfare cynical populists” have done to Venezuela.  They’re on their way to ruining it!

P.S. You can hear my chat with Fausta Rodriguez Wertz here & follow me on Twitter @ scantojr.


Written by scantojr

October 30, 2014 at 6:00 am

Posted in US-Latin America, US-Venezuela

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