Oil at $200?

It’s not unthinkable.

The Bolivarian regime is almost out of cash, but this could change rapidly.

Oil prices could jump, giving President Hugo Chavez an unexpected oil revenue windfall, if war erupts on the Korean Peninsula, if the Gaza crisis between Israel and Turkey grows into a broader regional standoff involving Iran, or if Hungary, Spain and Portugal follow Greece into sovereign bankruptcy, likely hastening the EU’s implosion.

However, would another unexpected oil windfall for the Bolivarian revolution translate into any kind of social or economic improvement for the pueblo? Nope.

Chavez is very clear about where he plans to take Venezuela: 21st century socialism and capitalism are incompatible.

He has declared that he plans to dismantle the three pillars of Venezuela capitalism: banking, imports (i.e. all productive activity) and land ownership.

He already shut down the foreign currency market in Venezuela. He is threatening to seize the banks, and he is moving to steal the national assets of the Polar Group.

If the Chavez regime benefits from an unexpected oil windfall, these revenues will be used to make the regime stronger, without any regard for the needs of the pueblo or the economy.


About Caracas Gringo

Representing less than 0.00000000001515152% of the world population as of 31 December 2011.
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2 Responses to Oil at $200?

  1. BOB says:

    If Korea gets in a war , guess how China would react. I don´t think that china willl reenact the 1950s . This is signaling North Korean econonomic implosion.
    On the other hand if PIGS imploded it would would neutralize the oil price increase, so the net effect would be very short temr. Last but not least, the huge oil spill invading southern shores and threatening the Caribbean basin could provoke the final stab that could kill economic reovery in the USA. No one is gouing to drive down south. The huge human suffering and finanical costs this disaster brought upon american livelihoods will inaugurate the beginning of the end of the oil era. for once the public will measure the true cost of the global eocnomy´s undue dependence on oil.


  2. Martin says:

    I think this scenario is possible but unlikely. I’m no economist, but I can’t fail to notice the unfortunate but almost invariable correlation between economic growth and the price of oil. As the Dow goes up, so do energy prices and Chavez, Ahmadinejad and Co start to smile (as well as Big Oil!). As the western economies falter, the price of crude inevitably plummets, and their faces drop. One of the situations you mention, an implosion in Europe, would certainly lead to this latter eventuality. I think that is much more likely in the next couple of years. Only a serious crisis in the Persian Gulf (a confrontation with Iran) could trigger a price surge, it seems to me. It’s a depressing trade-off altogether; the only other compensation is the small one of cheaper gas at the pump for G nation consumers.


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