The underwhelming ascent of the pragmatists

The dust still hasn’t settled in the debate over where the government is headed, vis-a-vis economic policy.

Some people think that #LaSalidaDeGiordani means more pragmatic days are coming. Rafael Ramírez himself has been teasing us about this nonstop, basically mouthing off against the very policies he helped implement and finance. And yet, on the actual policy front, we have heard nothing from the government.

Count Javier Corrales and Asdrúbal Oliveros in the skeptic camp. They see a power struggle inside chavismo, one that is going to make it difficult for Ramírez to implement any measures that touch upon the source of income for many inside chavismo. They also claim that Giordani has not been powerful for quite some time, so his exit does not change much in terms of internal government dynamics. On the other hand, Hugo Pérez Hernáiz thinks we are headed to more pragmatic days, forecasting the PSUV’s radical wing will ultimately be thrown under the bus.

At any rate, the clock is ticking for the “pragmatists” to show what they’re made of. In the meantime, the economy has ground to a halt.

58 thoughts on “The underwhelming ascent of the pragmatists

  1. Going to a unified $/BFS rate will not affect el mango bajito del chavista. Actually, it will make it more profitable because we are about to enter into a new “permuta era” that created a lot of wealthy people on each side of the fence back then. The difference is all permuteros learned the hard way they must be loyal and friendly with powerful chavistas in order to succeed the next cruzification of casas de bolsas.

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    • Or maybe they’ll just screw it up even harder, and “unify” (AKA Devaluate the bolivar) the exchange rate, of course, keeping the fabled 6,3 as some sort of AEtheric entity that would exist only for the enchufados and diosdao to buy, all while keeping the only reason for existence of the black market, the marrow of the “bolichico” income, the “cupos” and limits to access the currency, not counting the gargantuan bureaucracy that every mortal has to go throught before having the right to access a mere cent.

      Yeah, the worst of the cases, devaluation while keeping all the limits and gonad-crushing useless controls propelled by the stupidest discrimination, basically the same that happened when nicolasno devaluated in 2013.

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  2. I tend to think that the Government is trapped. They cannot backtrack and they have nowhere to go either. making an U-turn is probably far too costly anyway.

    The only way that they´ll be forced to make real policy changes, changes that we could welcome, is if the alternatives were even worse in the very near term, and I am not sure that is the case. I am pretty certain that there are people in the Government that are aware of their present dire straits, but since it´s still months before the building finally caves in the incentives to take very unpopular decisions is still not there. Since there is no consensus on the present predicament (within chavismo) or what to do about it, but there is unanimous fear of the consequences of rational policies the most probable outcome is that we will waddle along for some time until there is literally nothing left to sell, bolívares are not wort the paper they are printed on and everything goes to hell. On that day most of them will simply run away to dispense of their huge savings… and we´ll be left here to pick up the pieces. That is it.

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    • What is your conclusion, Chris? Geez…two Venezuelan teachers cannot afford to rent a tiny flat with their shitty salaries. Do you know how much time they spend trying to find food at controlled prices and what they actually pay? Do you know where most of that data comes from for the Venezuelan case? You are thick.

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    • Please elaborate over the reason to your link. Are you really saying we are better than before Chavez? Are you in Venezuela? Do you really see things better? So, “Guerra economica” was a real argument for you, right?. It sounds like the chavista who gets shot in Libertador and drags himself to Chacao in order to blame the opposition.

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    • snapshot of 2011 results with feeds from participating countries. Given what we know of the reality vs. the massaged data from the Central Bank of Vzla … given what we know about the earlier manipulativeness of the Vzlan regime vis-à-vis its literacy numbers submitted to the World Bank .. given what we know of the progressively worsening economy, in Venezuela, can we possibly be surprised by Chris’s desperate attempts to wave his undies at us?

      What a moron.

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  3. Want to read something shockingly revealing ? read the BCV inhouse presentation on the state of Venezuelas finances , really scary stuff !!. wont find it in internet or the papers though . If you cant find it try to get a friend who has visited Venezuela recently from one of the big financial firms to tell you what information he has on the subject . Guaranteed your hair will stand on its end ( if you have any hair) . The country is for all practical purposes broke !! Biggest priority for the govt , get to the end of the year before falling in default of its financial debt obligations , Have 5 billion USD spare cash ?, there is some one who will do anything to borrow it from you to get to the end of the year .

    Venezuela has to put its house in order and thats a tall order because the money isnt there unless you are prepared to make some incredibly difficult sacrifices , things that touch on the most sacred and essential.
    The only regime guy tackling this problem with any half chance of temporary success . Mr Ramirez himself , THE MAGICIAN, the miracle maker .from Pdvsa .

    Part of the solution , suspending of all commercial debt payments ( airlines for example) , strict rationing of USD dollars needed by local industry/ service providers to import feedstock , materials parts etc.to maintain normal flow of goods and services to local population . Thus the many shortages affecting ordinary Venezuelans .

    Not touchable: supplies to Petrocaribe on preferential terms, Not touchable payments to Chinese funds and loans , Not touchable : Payments to hondholders . Not enough money to pay the later when they start falling due from the end of the year forward , what to do? negotiate a roll over that allows the exchange of bonds falling due soon for bonds fallind due much later . For that a song and dance act to make them feel confident , we are taking the right measures . we are unifying the exchange rate , we are raising gasoline prices , we are holding back on expropiations , we are allowing for price increases of domestic goods and raising taxes .

    Giordani is out of the gabinet , but while he was there he made many friends at the top level , people who like to see themselves as radical revolutionaries , people like Jaua , Like Arreaza , Like Adam Chavez . , they will likely go along with any thing that will help save the day but they are keeping their knives sharpened come the day when they can act against the Magician who has the power to keep things ok for a while but not their love.!!

    Maduro himself may not be all that sold on the Magician , but while he needs him to get through the coming hard times he may have already located the person he would like to see replace him , also need a bit of time to train people that can tackle navigating the quagmire that Pdvsa has become .!! Dont know how this tangled nest of vipers will sort their differences in the end . But give it time and truth will come out !!

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      • I find your contempt for someone like Bill who brings so much to these conversations, to be totally unacceptable. Ever thought someone could have a reason for their actions? If we can’t keep a certain level of decorum within the constraints of these four walls….

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    • “Not touchable:”
      You forget t”we are taking the most important one, for the regime, the mos untouchable of the useless money sinks that’s bleeding Venzuela: The tribute to the island and its mummified dictators (Or the euphemism “intercambio de ayuda por barriles de petróleo y divisas”), I’ve read that the grand theft of cadivi pales in comparison to how much money the castros have stolen from Venezuela since the wax doll took over.

      “right measures . we are unifying the exchange rate , we are raising gasoline prices , we are holding back on expropiations , we are allowing for price increases of domestic goods and raising taxes”
      I don’t have a bit of hope in these being “right” coming from these bastards, let me explain:

      * Gasoline price raise: This is the hardest one to sell, and the MUD could use it as a weapon against maburro stating that he’s betrayting the biggest promise made by the wax doll, because according to him, the gasoline price was the sole trigger of the dreaded “caracazo”.

      * Allowing increases of domestic goods: It was done already, under the table, with no official support (wasn’t published in oficcial gazette), and after the inquisition called “intendencia de precios justos” was created, I’ve seen many cases of sellers who were promptly arrested and fined with ridiculous amounts because they were “usuring” and they had no written support to defend themselves, so, it fails there too.

      * Raising taxes: The right measure would have been making pay those people who don’t pay taxes because they don’t want to (That’s being “vivos” or cocksuckers as the Chigüire Bipolar called them), and that counts the gargantuan amount of “informal economy” that’s grew in the chavista age (From buhoneros to all sorts of pirates), raising taxes is going to strangle even more the people who actually pay for those. That applies too to services, The regime has raised services like electricity by almost 300% in less than six months, all while we have a shitty product.

      * Expropiations: Sleepy donkey (also Capriles’s lovestruck fan) bus-burner jaua jumped and started barking that they weren’t going to return even a milimeter of expropiated property to anybody, and those who think so are just smoking cheap pot. So, if the regime wants to get this moving, they better make up a fantastic excuse, because the darkness of the almost absolute censorship we’re suffering right now isn’t enough for them.

      * Unifying the exchange rate: Last and the worst, I’m betting this idiot is gonna do the same fail that maburro and the wax doll did before: Raising the exchange rate, while keeping all the useless limitations and hulking bureaucracy that’s corroding the economy right now, which are the direct causes of the black market (71,41Bs/$ according to dolartoday), while somehow saying that the fabled 6,3 still exists and’ll continue to be used as the fuel for their stupid lies to the rest of the world (Like that we’re earning the juiciest lowest wage in all the continent). Measure that will for sure make the black market value skyrocket to god-knows-how-high. After all, the mafia of the dollar black market has net more money and profits to these criminals than drugs in other countries.

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  4. Syd just read it it seems to me that Venezuela lived a second oil boom that ended like the first one with CAP I, of course you will never accept that since you are a bunch of fanatics. But all statistics indicator show that.After all you are Venezuelan like the chavistas, even if you believe chavistas comes from mars and you from some distant land in heaven….so as the chavistas on a different tune you believe you own the true.But the true is always in the middle.Yuo get it….

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    • “… it seems to me that Venezuela lived a second oil boom that ended like the first one with CAP I…”
      I couldn’t draw a whole parallel between CAP I and comemierdismo eras, the dead shitbag took over on promises faker than a wooden coin, after he was released from prison by his godfather.
      There were mistakes in the previous goverments, yes, but they were not even close to what Venezuela’s going throught today, any deficiencies that the so-called 4th had, were multiplied and grew hundreds and thousands of times much worse in chavismo.

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  5. I think there is a misinterpretation of just what a “pragmatist” is.

    The assumption by most people in general and specific to this blog is that the pragmatists will do what needs to be done to fix the economy.

    I’ve opined previously that I do not believe that to be their ultimate goal. To actually make the sacrifices necessary to “fix” the economy would take too great a toll in political capital, let alone economically.

    This is all a dog and pony show wherein they’ll say what the markets want to hear and do what they need to do to convince investors/external stakeholders that the bonds are great investments (and, frankly, it appears to be working). Then they’ll float more to obtain the necessary working capital to stave off trouble for another year. Buying time will allow them to tweak the economy just enough to keep people pacified and themselves in power while damaging their ruling coalition as little as possible. That, I believe, is their endgame scenario over the next 12-18 months as they approach parliamentary elections.

    Kicking the can down the road and passing their legacy of problems off to someone else is a pretty valid strategy for surviving today. That, friends, is being pragmatic.

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    • Pitiyanqui : Your comment rings a bell , dont know that they have the resolve and clarity of mind to straighten out the situation any permanent way , they get muddled easily , want to do things but then dont dare go ahead . and mean time their digging the country and themselves into a bigger hole . They really think that if they control perceptions then they have control of things .

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    • Interesting thought. I don’t really know how “pragmatic” operates within a totally corrupt, clientelist system. These elites are being forced to make choices and they will take care of themselves first. I don’t see Venezuelans re-inventing human nature on this point.

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  6. Pepe Trueno , or I should say Tiro Loco.It seems to me that Venezuela enjoyed a second oil boom like the one that took place during Cap I, by the way the boom ended in a economic disaster ,off course you will never accept it and as a good Venezuelan like Chavistas, since they do not come from the moon, and you are not from a distant galaxie.You will defend Luis Herrera was one of the best economics times of Venezuela.But as good Venezuelan, all from the left, right ,down , middle…Se rumbearon the money like the 1974-78 , drunk a lot of whiskey, travel around the world, gave away money to every country that asked, Cap I gave 7 billion of dollar , nobody remembers now Cap even was the first Latin America president who went to USSR and send oil to Cuba…Like good Venezuelan you will say I did not do it .It was the damn communist government , the others not me I am not responsible. But the true Tiro Loco we were all responsible , or at least our fathers in the 70 and now we are. The problem of Venezuela are the Venezuelans and foreigner living there , we are pure shit no the country or the Goverment or Capriles, Mud….That is our problem, the day we see in a mirror as we really are we could begin to change.Neither you nor the other in this blog will never understand , just because you all are Venezuelans

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    • GDC, I am sorry to hear you are justifying the current economical situation with what happened with CAP or Luis Herrera. From my point of view, they initiated this mess and they are the main reason why Chavez made it into politics and how we are where we are. Your mediocre justification only validates my point over chavismo, this “revolution” is not a revolution, it is the same thing as it was before but on steroids. We became more corrupt and more anarchic than before, the “revolution” did not change anything at all, it was only a power transfer to a resentful group of people that did not have a chance to “play” before.
      I completely agree with you about we are all responsible for this situation, by action or omission but we are responsible and if you read my position over this blog you will find I have always criticized that Venezuelan society approved and promoted people with money even if the sources are not clear. Chavez was the personification of that attitude, arrogant and liar, unprepared and egocentric. He reflected the average Venezuelan like you.
      Now going back to my previous questions that you forgot to answer, do you really think we are in a better situation that before? Are you in Venezuela right now? When was the last time you got into a carrito por puesto? The biggest bill cant buy you a tuna can, its that really progress? Was this caused by La Guerra Economica or was actually inflicted by wrong economical policies?
      I think it is time for this administration to step back and let someone else manage the country, obviously your party/ideology was not able/capable to rule a country like Venezuela. It is time to change.
      By the way, who the hell is Tiro Loco? Are you referring to another person on this blog or the cartoon character as an insult? Try better

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      • I am sorry to say but Chavez represents just the people like you and in general the opposition who believe their are right all the time , I simply said that the Venezuelan rentier economic culture is the structure behind the economic crisis.Chavez was not God just a Venezuelan who believe like million, that is country is the richest in the world, we do not need to produce but distribution, and the land of Bolivar , so a geopolitical star.Chavez is just an stupid Venezuelan with the head full of pajaritos preñados.You have made Chavez a kind of God, big strategic mistake in politics, the Venezuelan economy has a tendency , negative one, since 1978 with Chavez and them Maduro is getting worse every day , but is also true that between 2003- 2008 there was an oil boom just take a look during those years a simple proxy like car sales , travelers to USA and Europe, whiskey imports , the classical Venezuelan consumption when thing go nice…the question you made about guerra economica my mediocre justification… Well since you Venezuelan love to insult and ask question out of place …. I think the mediocre, stupid, useless , vulgar , ordinary are you just take a look at your country , you like to be insulted?

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        • Given that you neither side with Chavez or the opposition, and that you have no respect in general for Venezuelans, what exactly are you doing here?

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    • Late last year he gave the numbers for Fonden and they were no where near 100 billion , more like 5 billion or less . Fonden has huge obligations with the chinese and with chinese builders and contractors of a dozen different projects , they cant use money ear marked for those projects to pay debt obligaitons or to make inmports needed to keep the flow of goods and services required to keep the population fed and free from criplling shortages.. If they have so much in Fondem why the desperate efforts to get the 5 billion USD theyve said they are trying to negotiate with international lenders.

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    • To quote Tony Stark:
      I wouldn’t believe you what time is it now even if you paid me with Xerox shares.

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  7. Good morning, I have attached a PDF of some Venezuela data that I thought you might like to see.

    As you may know, over the last few months I have been involved with a team helping to push through sanctions on Venezuela. Last week, the US House of Representatives passed its version of a sanctions bill (http://www.laht.com/article.asp?ArticleId=2288373&CategoryId=10717 ). The Senate Foreign Relations Committee has passed its version (http://www.laht.com/article.asp?CategoryId=10717&ArticleId=2240164 ). There is now jockeying to bring the bills to the Senate floor.

    You may find some of the attached slides from the PDF particularly interesting.

    The initial slides show the drastic drop in reserves from $40 billion to $20 billion (even as its major component gold rose), rising 60% inflation, the falling currency, and the 60% scarcity index, which we have discussed before, though you may not have seen them graphically.

    You may find the declining US oil imports slides and increasing US domestic oil production slides interesting (7-9) as well as the resulting fall in Venezuela’s oil exports to the US. You may also like to see the graph detailingVenezuela’s falling oil production as well as who actually pays for Venezuela’s oil (US, China and India) and how much money that is in real terms. In real money, while Venezuela’s oil sales may net Venezuela between $50 billion depending on their actual production, their imports alone had been $59 billion, though that is crashing rapidly as widespread shortages show.

    While Venezuela’s production in the east and west of the country has been falling, their Orinoco production is growing rapidly, as the billions invested by serious international oil companies like Chevron, ENI, Repsol, Rosneft, CNPC, & ONGC (not to mention the expropriated billion dollar investments by ConocoPhillips and ExxonMobil) continue to ramp up production. Ironically, long before the new US Keystone pipeline is even started, Venezuela has virtually finished its own pipeline to bring oil from the infrastructure poor Orinoco area to its giant Jose Refinery and Terminal Complex on the Caribbean this week. The 154 mile pipeline can carry 750,000 barrels per day, though there are other bottlenecks and infrastructure needed. (These slides were for VIP’s, administration officials and congressional leaders and were not in the public bundle attached. Please let me know if you would like to see them or discuss these developments further).

    You may find Slide 14 interesting — it shows the oil reserves and production levels of the US, Canada, Mexico, Venezuela, and Brazil.

    Slide 15 and 16 show just why Venezuela, with the world’s largest oil reserves, has lower production than the US, Canada and Mexico — foreign direct investment. After years of expropriation by Hugo Chavez, foreign direct investment in Venezuela continued falling and actually went NEGATIVE in 2009 and as slide 16 shows is the lowest as a percentage of GDP in the hemisphere, save for Ecuador. At the same time, as slide 17 shows, Venezuela’s cost to borrow in international markets is also the highest in the region.

    Finally, just to show what it all means — where the rubber literally hits the road — slide 18 shows new car sales in Venezuela, which fell 87% in the last year to just 817 (not a typo, 817) new cars in February. In 2007, new car sales were over 25,000 a month.

    You can also find the Public Slideshow Presentation online here: http://www.centerforsecuritypolicy.org/wp-content/uploads/2014/05/Russ-Dallen-Presentation.pdf

    Thanks again for your continued readership and business.

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    • As per a study presented by Ramon Espinaza at Harvard University last May , Venezuelas total oil revenue for 2013 is 46 billion USD which is reduced to 32 billion after taking out the nearly 10 billion spent on the import of oil products ( mostly from the US) and some 4 billion in the payment of its rising foreign financial debt . The increase in oil product imports is due to : 1. reduction in the production of refined products due to a growing deterioration in refining facilities , 2. increased use of diesel to feed thermoelectric power generation plants to make up for the fall in the production of hydroelectric power . 3 need to use diesel to allow growing production of extra heavy crude to be transformed in to a markeatable and transportable product . The debt service payments have risen in line with enormous growth in the amount of loans recieved by Pdvsa / the govt to create false bonanza to help Chavez and Maduro get elected or simply to cover the shortfall in revenues vs their increased costs .

      The growth in the production of faja extra heavy crudes is due to a rapid decline in the production of light and medium crudes resulting from the depletion of light medium crude fields in part caiused by inadequate maintenance and negligent production practices. Extra heavy crudes must be mixed with diluents ( oil products) or light medium crudes to be transported and become marketeable , extra heavy crudes cannot be transported and sold in their natural state . The cost and shortage of light medium crudes and diluent products make the production and sale of extra heavy crude oils much less profitable and opertionally more difficult . The economy of producing selling conventional crudes and extra heavy crudes is totally different and has an impact in revenues produced and received. . As production of conventional crudes decline and is replaced by the production of extra heavy crude oils the economics of oil productionin Venezuela is bound to be increasingly affected . A way of avoiding dependence of diluent products and light medium crude mixing to sell the increased production of extra heavy crude is to build upgraders , upgraders however are extremely expensive to build and also take a long time to build . this may put a hamper to the production of extra heavy crude oil in Venezuela or reduce the proftis from its production and sale..

      If you add the countrys financial debt , commercial debt , import requirements to allow for continued flow of a minimal level of goods and services to the population , pdvsa forex expenses and cost of paying for essential investment plans,(to keep production going) there is an evident shortfall or deficit making it impossible for Venezuelas current oil income to hoour and cover its forex expenditures which will become critical as several billion worth of bonds fall due towards the end of this year and the next couple of years.

      The reason why Venezuelas oil revenue is so low is because 1. the cost of a heavily subsidized domestic gasoline supply ,2 , the heavily subsidized economy maintained by the govt to protect its popularity 3, the very favourable terms under which pdvsa sells its oil to petrocaribe, cuba , cono sur allies ( and the custom of some of them to defray payment even of the part of the price which is not financed) 4, the retention by china of moneys from the sale oil chineses indian and other customers to guarantee the payment of their loans to fondem to build largely unproductive projects .( some 50 to 60% of proceeds from the sale of oil to china are kept in chineses banks and never paid to Pdvsa , i.e 350.000 bls out of 580.bls sold to china) .

      The picture that rises from considering these numbers help explain the govts failure to supply the forex needed to pay many of its commercial creditors or to supply domestic industry and companies with the forex they need to keep their production of goods and services flowing at normal rates.

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    • Contact the International Shoremen Union. If they decide to boycott, like they did against Apartheid, that will have a beg impact.

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  8. People wanting access to BCV confidential financial reports must apply directly to the BCV to be authorized such access . Otherwise they must rely on the official reports put out by the govts propaganda ,machine . What the report says however can be inferred from just looking at the govts extraordinarily niggardly handling of its much diminished forex availabilities despite the high political price of that handling !! its also useful to have foreign friends or acquaintances who have been invited by the govt to help it attempt to fix their desperate financial difficulties in the months ahead .!!

    Im afraid that not having ever resorted to glue sniffing or cocaine use I cannot personally report on its effect on peoples mind , there are apparently trolls in this blog who can personally report on such effects from personal experience .!!

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    • You are funny a confidential report that any one can access by applying ….interesting a confidential but open to the public.How do you call it stupidity .Ramon Spinaza may say misa ….

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        • Venezuela had two oil boom one with Cap the other with Chavez both ended in economic disaster,because the Venezuelan society is only a producer of paja.it does not matter if you are chavistas or opposition both are Venezuelans with an rentier culture….that all …

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  9. Trolls sometimes quote authors they havent read , for example some of them attribute to HL proposing the hypothesis that Venezuelans are stupid , what HL really suggested is that spanish conquistadors had a sociopathic streak, not that they were stupid .!! Strangely enough during the last 15 years Venezuela violent crimes rate has climbed like never before to reach world records . Most of this surge of violent crimes have ocurred among (their descendents ? )among the humblest least fortunate of Venezuelans, many of which have until recently been regime supporters . There may be some truth apparently to the statement that the bulk of Venezuelans are not particularly gifted intellectually to judge from some world statistics which put the average IQ of Venezuelans at 84 , about the same level as Cubans but well below Chile , The US , Western European countries and Est Asians .

    To many anyone believing that despite the current crisis the economic model imposed by the regime is perfect and that Venezuelas problems arise as a result of a covert and fiendish economic war by the opposition , is a sure sign of self induced mental retardation . I happen to share this view.!!

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    • It’s more like the wonders of brain washing.
      And to quote Homer Simpson “It’s easy to blame ourselves by our mistakes, but it’s easier to blame other for them!”

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    • Read with calm the introduction to Viajeros De La India, second, most of the crime in Venezuela is collateral effect due to the lack of good migratory policies. The most violent barrio in Caracas is Petare where 60-70% of the population is Colombian or their children, mostly from the department of the Caribbean coast. It is not a problems of xenophobia. Colombian are used to an extreme violence,, generation after generation have lived under a criminal and political violence, so they develop a tolerance for it and are easy to resolve their problems by using it. If you take a look in internet Colombians have a criminal problem whenever they go : Argentina, Chile , Spain ecc.. In Venezuela for your information 20-25 % of population are born in Colombia or their progeny. The growth ( compound rate) of Colombian population between 1894 and 2011 ,in Venezuela, using the census, is 3.6 %, Venezuelan and other foreigners 2.18 for the same period. The problem is that Venezuelan Institution were unable to filtrate these immigrants and to expel those who came to commit crimes ecc. When it comes to the Venezuelan economy its model has been since the 40-50 of the XX century : State Capitalism , the last decade we have a radicalization of this model. The socialist narrative is a discourse a slogan for the consumption of the followers of chavismo. that is paja. But the rentier culture is the bases of this economic model and chavistas and oppositor have the same culture, keep that in mind. You can see it in the economic daily behavior of both political groups, but one nationality. So it is stupid not to go to the roots of the problem and just surfaces it , only because you hate chavistas, and that’s your problem, since due to this childish hate you cannot see the reality. You become so stupid and mentally retarded that anyone trying to express the idea that the real problem is the economic culture of society as a whole is accused of chavista, that’s being a complete stupid and shows that people in the opposition is exactly alike in their psychological profile as chavistas. To end take a good look to Viajeros de La India ,you are missing many ideas put forward by HL beside his central argument….

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  10. Juan, thank you for your lead-in article nailing “The Underwhelming Ascent Of The Pragmatists.” RD, once again, thank you for your excellent charts. And, BB, thank you for your excellent insight and the Espinaza summary. Pragmatists or not, the Govt. is between a rock and a hard place–$30 billion real net income vs. recent $60 billion imports, $20 billion at least unpaid commercial debt, very little (Govt. recent $5 billion estimate) if any Fonden reserves, and the virtual impossibility to significantly raise local gasoline prices without severe social consequences; and,this without mentioning the difficulty with the Radical wing of cutting back giveaways to PetroCaribe cohorts, much less to the Cuban puppet-masters. As Pittiyanqui said, the current “Pragmatist” effort is to correr la arruga, at least to year-end to be able to, mostly roll-over expiring international debt, and, in the meantime, perhaps “unify’ Sicad 1/2 at 35-40, with a token increase in the Cadivi rate used for vital vote-getting food/medicenes, which rate absorbs some 70-80% of the scarce foreign exchange. Following BB’s lead, and maybe not in his BCV info, I hear from an inside source that the BCV internal estimate for the unmentionable rate is about 110–so much for the rise of the “Pragmatists”–underwhelming, indeed.

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  11. There are places were a culture of violence developed from particular historical influences , Studies have been made of the response of men who feel challenged in their manly dignity in the US , US Southerners tend to react much more angrily than those from the rest of the US . Suspect that a culture of violence of this kind might be responsible for the climate of violence observed in Colombia , Guatemala and maybe Salvador ( from the testimony of relatives and friends who lived in those countries years ago) . Violence was not a marginal class phenomena but something which even high class people might indulge in .

    But there is a different culture of violence phocusing on the poorest people in the caribbean region and parts of central america and which derives from a dislocated social milieu of people whom poverty and the machista custom of having offspring with different women and then abandoning them transformed into emotionally scarred people who see violence and the practice of wantom cruelty as a vindication of their manly status . this is the thesis advanced by father Alejandro Moreno in his books on the Venezuelan marginal family .

    Then there are the McClellan and Hoffsteder studies of the cultural values of different countries and how in Venezuela people idolized Power in a way that few other people in the world did . Of course we all know that the most eponimous expression of might and power is violence . Strangely enough having lived as a child both Colombia and Venezuela and in the US I noted how the passion for the expression of cruelty and violence was much more marked in Venezuela than in Colombia and the US.

    From personal observation and those of people whove worked as phisicians in the barrios i know that the social dislocation and its damaging sequels among the poor have become worse and worse since about 25 years reaching a level of explosive force in the last 5 to 10 years , violence as a consequence has become rife and unstopable as the forces of order where themselves destroyed by gubernamental mismanagement leading to a climate of rampant impunity.

    Blaming the explosion of violent crime in Venezuelan to the colombian presence is a tad simplistic , the causes are much more complex and nuanced that some people might think .!!

    There are many cultural strains which all Venezuelans share to different degrees irrespective of their social upbringing , perhaps more marked among the less socialized marginals but nonetheless present in people of all classes .!! But this is a subject for separate consideration in another posting !!

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    • Since you are Colombian or from Colombia origins you will never accept this fact, I lived in Colombia for 3 years , i notice how the media , people and in general society tries to hide their reality. The city of Medellin used to have 350 homicide per 100.000 only a few years ago, Colombia 90 homicide per 100.000 during the initial year of Uribe the statistic depend, since in Colombia there are official and those by ong. Any way i understand Colombians since they are treated all over the world as narcos, prostitutes ecc I live in Europe and Colombian = delinquent , which is really unfair , I know Colombians that say they are Venezuelans or Brazilian to hide their origins. Any way take a look now day what is happening in Buenaventura people is being cut to pieces… yet i believe that treating all Colombians as sicarios , narcos ecc is unfair.

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      • Te voy a hablar en Español, y luego en Ingles para que entiendas bien, GDC.

        Tu suenas exactamente como aquellos Venezolanos que en los 60, 70 y 80 trataban a los Colombianos en Venezuela como los gringos tratan a los indocumentados latinos hoy dia.

        Para la gente que piensa como tu, no hay, ni habian, ni habrian Colombianos dignos, ni trabajadores, ni decentes. Ese pensamiento representa el propio rancho en la cabeza que habitaba en algunos Venezolanos en esas epocas.

        Lamentablemente, esos mismos Venezolanos tambien dudaban de Venezuela misma, presumiendo que lo que hizo Perez Jimenez al aupar la imigracion de Italianos, Españoles y otros Europeos a Venezuela en los 50 iba a “mejorar la raza”.

        Que falta de confianza en ti mismo, y de lo que podemos ser, pese a la burrada de tanto los “democratas” y los “chavistas”.

        Estos tipos de pensamientos son los que nos han hecho fallar.

        You sound exactly like those Venezuelans that in the 60’s, 70’s and 80’s treated Colombians in Venezuela just like many Americans treat undocumented latinos in the US today.

        For folks that think like you, there aren’t, weren’t and could never be Colombians that had dignity, nor that were hard working nor decent. This line of thought only demonstrates the very “shantytown in the head” that was a part of some Venezuelans in those times.

        Unfortunately, those same Venezuelans doubted Venezuela itself, presuming that what Pereze Jimenez did in the 50’s by encouraging Italians, Spaniards and other Europeans to immigrate to Venezuela was to “better the Venezuelan race”.

        What a sign of low self confidence, and doubt about what we could be and still be, despite the idiocy of both “democrats” and “chavistas”.

        This line of thinking has always condemned us to failure.

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        • Te voy a responder bien claro , los ranchos que conozco en Venezuela en Petare .. no lo construyeron mis padres europeos, a mi hija la trataron de secuestrar en Venezuela colombianos de las Águilas negras ,por eso me fui para Italia a vivir, en mi casa se cansaron de robar colombianas, de que coño hablas tu .Pérez Jiménez lo que le hizo fue bien a Venezuela trajo una inmigración de calidad que se dedicó a trabajar por su nuevo país y no una manga de ladrones, invasores de terrenos, sicararios, narcos y prostitutas. Cada quien en su casa caballero y yo estoy en la de mis padres.Estoy obstinado de leer colombianos guillados hablando tonterías de xenofobia en blog que no les pertenece ,porque no empiezan por reconocer la carga de criminalidad que llevan por dentro y la combaten, es muy fácil acusar a los demás de la violencia que ustedes ejercen en otros países y en el suyo, esta bueno de ser políticamente correcto y disimular la realidad y déjame decirte que no es sólo en Venezuela lee bien y memoriza lo que dice la canciller de Colombia .

          http://www.rpp.com.pe/2013-06-28-colombia-preocupada-por-delincuencia-de-nacionales-en-paises-de-la-region-noticia_608766.html

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    • By the way when you speak barrios and culture of violence and marginal families in Caracas .You should begin talking about Colombians living there since according to the ex consul of Colombia in Caracas 70 % of them are Colombians so please ….read this and memorized so next time you speak about culture of violence in Venezuela ….capisci colombiano

      http://www.caracol.com.co/noticias/internacionales/entre-el-70-y-80-por-ciento-de-los-pobres-que-viven-en-las-zonas-marginales-de-caracas-son-colombianos/20060727/nota/313634.aspx

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      • La xenophobia te delata, GDC.

        Presumes que soy Colombiano, y no lo soy.

        Veo que no hay nada ni nadie que te hara entender algo distinto.

        Lo siento por tu hija, y no solo porque la secuestraron sino que tambien por tenerte a ti como ejemplo.

        “El blog que no les pertenece”

        Hasta donde yo sepa, y desde que leo este blog hace ya unos 6 o 7 años, Ud. no es autor de este blog (gracias a Dios!).

        Y siempre han manifestado que el blog no es solo de los autores pero tambien de los comentaristas, incluyendo a personas como Ud.

        O acaso Ud. viene a expropiarlo? O invadirlo? O prostituirlo?

        Referente a el articulo de Caracol, basicamente la consul Colombiana especula y se basa en lo que le dijeron dos o tres personas que “adivinaron” que habia 70-80% de los pobres con ciudadania Colombiana.

        Tremendo estudio cientifico.

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        • No lo presumo el uso de la palabra xenofobia es típica de tu gentilicio para no asumir responsabilidades en todas partes del mundo.Las noticias de las autoridades colombianas consulares son oficiales no científicas te repito oficiales y te falto comentar la preocupación de la Canciller colombiana también oficial…

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          • You have been posting troll bait comments on every post, I suggest you either calm down or please leave this blog, you are making it a chore to visit.

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      • Trolls intent is to draw bloggers attention away from the topic at hand by blandishing insults that cause participants to engage in off topic discussions that go nowhere !! the topic that concerns us here is how messed up the govts finances are and the almost certain futile efforts by Ramizez and team to try and save the country and the regime from the very dire financial situation caused by the regimes many managerial mistakes and misdeeds !!

        Colombians share in the crime problem is a red herring . what really concerns us is where the govt is going to go to keep afloat in this extremely critical economic situation … the answer is that almost certainly nowhere far!!.

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  12. Maduro has publicly confirmed Ramirez as head of Pdvsa and the Economic Vicepresidency and denounced that the rumours that had him out as born of an opposition plot (what else ) meant to break the unity of the regime , so Ramirez is safe for now and one mignt surmise that the Regime is in a survival mode and at least some of Ramirez announced initiatives will be acted upon slowly and with great caution so as to minimize any political backlash from the general population . Its a difficult balancing act and will mean greater sacrifices short middle term for Venezuelans and maybe a bit of remporary relief for the govt finances mid term !! Time will tell. !!

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    • For years now we have seen time and again how close we are getting to a fiscal edge, and yet somehow the government keeps finding ways to kick the can down the road.

      As long as we have oil, we’ll have some kind of ability to kick the can down the road.

      I worry that we have gotten so used to doing without that we’ll end up like Cuba, and this can be continued for a very long time.

      I mean, Cuba has had 50 years now of dictatorship and a very underperforming economy while handing out crumbs to the populace and no oil or other resources (Sugar for a while, and Russian patronage too, but it’s been what, almost 20 years since that dried up?)

      As long as they keep bondholders happy, and the Chinese mollified, they can do this practically forever.

      Only a serious breakdown within the PSUV and their military clients will put paid to this regime.

      The opposition can at best look on the wreck from the sidelines, and then end up acting like the crowd when a truckful of food flips over on the highway…….

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      • This time the crisis is really beating at every ones door and hard , they might kick the can a bit further , but its getting harder and harder , history teaches us to be wary of predictions , but the factors that sustain the regime are becoming more frail and uncertain as time passes . Compare their situation to what it was 3 years ago and youll notice the difference ……..lets keep calm and keep pushing .

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    • When it comes to the Venezuelan economy and Goverment ,I suppose that you are well aware that opinion you write are mostly wishfull thinking and rumors , based on thin air….

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      • Ok, Mr. Expert, give us your considered opinion on the subject of the post.

        Please try to keep racism/xenophobia out of it

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