Last week, Hugo Chávez announced he had bought 1 billion dollars worth of Argentinean bonds, a new lot of the so called Boden 15. In my first analysis of the transaction I wanted to focus on the open hypocrisy of Hugo Chávez, who supposedly lends Venezuelan money to his friend, the Argentinean president Cristina Fernández de Kirchner, because he has great confidence in the Argentinean economy, while at the same time he proceeds to dump the bonds as soon as possible, selling them to Venezuelan banks, that only buy them because it's a nice way to obtain US dollars at a lower exchange rate than the parallel (dollar they are forbidden to get freely due to the exchange control in place since 2003).

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The Venezuelan Central Bank published yesterday July's price inflation numbers, which turn out to be very very bad, despite the attempts by the bank to hide reality with word games.

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The Venezuelan Government Hugo Chávez announced last Tuesday he had bought 1 billion US dollars in Argentinean bonds (Boden 15) in another big favor he's conceding his good friend and troubled Argentinean president Cristina Fernández de Krichner. Chávez, who always pretends to be an altruist and to act in the interest of everybody else but him and Venezuelans, this time decided he would be no more altruist and is charging a very high 15% interest for the 1 billion loan.

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What would you answer me if I told you that the revolutionary justice court's decision upholding the constitutionality of Clodosvaldo Russian's candidate blacklist was predicted in 1851 by an South Carolinian politician named John C. Calhoun? You would very likely tell me I've lost my mind.

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Under Venezuela's five year old exchange control regime there is a Commission for the Administration of Foreign Currency, (known as CADIVI for its Spanish acronym), whose bureaucrats decide who can and who can't buy foreign currency at the official exchange rate.

CADIVI yesterday announced it has temporarily suspended almost 48 thousand people from its electronic system, which means this people can no longer buy foreign currencies at the official exchange rates and will be forced to go to the parallel exchange market.

What crime did these 48,000 people committed?

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Thanks to one of my loyal readers, Luis from "Diario de la Crisis", I woke up on Friday to the news of the most recent whim of Hugo Chávez: the nationalization of Banco de Venezuela, a subsidiary of the Spanish group Santander Central Hispano.

There are so many wrong things with this announcement that I spent several hours thinking where to begin.

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What are the limits of mental gymnastics?

Apparently there are no limits to what a neocommunist mind can do in order to distort, trash and destroy the idea of free market capitalism. The most recent example comes courtesy of chavecista interior and justice minister Tarek el Aisammi, who stated yesterday on the government's TV station (VTV) that our police and jail system models were developed from a capitalist point of view.

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Lies, dammed lies, and statistics! Each piece of government statistics has to be suspected a priori. Firstly for being a statistic and secondly for coming from the government (from any government), for the state, being an institution based on lie (that security cannot be provided by private non-monopolist parties), is particularly inclined to lie.

Case in point: the Venezuelan government and its unemployment statistics. Unemployment has been supposedly on decline for several months. What government statistics don't say (or at least I haven't been able to find on the INE web page) is how many of those currently "employed" are working for the government. I know that perhaps with a little more effort I can find the numbers, but for the moment I will conform myself with suspecting that a large number of currently "employed" people is working directly or indirectly for the government and its numerous "missions" (social programs), as the government is happily celebrating the drop in unemployment. But what's the problem with this? That by definition government employment is not production but welfare, and therefore represents net consumption of resources.

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Journalist Marta Colomina thinks livestock farmers are heroes to whom statues shall be erected. But what "opposition" farmers want is for Venezuelan people to pay more for milk and cheese. That'd be no problem, since we all want our services to be paid as expensive as we can, but the methods chosen by Genaro Méndez (president of the Venezuelan Cattle Farmers Federation, FEDENAGA) are plainly immoral, since he wants to use the power of the government to curb imports of milk into the country.

As it usually is the case, big business can easily be capitalism's and free markets' worst enemy, but usually they are not as candid with their intentions as Mr Méndez is being here.

So, what are they asking the government to do? (this part was not quoted in the Venezuelanalysis' piece, so you have to go Cadena Global if you want to read in full)

We are asking the government to suspend immediately milk imports, at least during two weeks.

And why? Pretty simple indeed:

These white [hard] cheese has commercialization problems, because there is imported cheese which is of even better quality and cheaper [than Venezuelan cheese], due to [the overvaluation] of the preferential dollar and because they enter the country without paying any kind of tariffs.

You see, Venezuelan cattle farmers feel they cannot compete with cheaper and higher quality milk and cheese from abroad, so they decide they will force, at the point of a gun, the people into buying more expensive and lower quality Venezuelan milk and cheese. When the issue is about spoiling Venezuela's poorest FEDENAGA and Méndez can easily agree with the neocommunists in power, despite being allegedly from the "opposition".

And these are opposition heroes? What are they opposing? Certainly not socialism, nor banditry against the poor. But, Oh, well that's the sad state of Venezuelan politics at this point.

You can read Mr. Méndez's statements in full (in Spanish) via Venezuela es Noticia.

 Venezuela, Economics

Neocommunist commentators and pundits live their lives trying to convince Venezuelans and the world of two factoids about Venezuelan-Colombian relations:

1. Colombia and Álvaro Uribe are militarist and, therefore a menace to regional peace.
2. Venezuela and Hugo Chávez are peaceful and loving revolutionaries.

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