Venezuela in Greek: Eímaste patí̱same

President Chavez was all over the map today, declaring that the PSUV will “crush” the opposition with the truth, speaking ill of the late President Carlos Andres Perez, brandishing Simon Bolivar’s sword at a rally in Plaza O’Leary, and announcing that he will seek re-election in 2012.

The MUD’s 65 opposition deputies joined the new National Assembly, holding up placards that said “52%” to remind everyone that the opposition won the popular vote in the 26 September 2010 elections, but the regime has more seats in the assembly (98) because it rigged/gerrymandered the system.

It’s unclear what, if anything, the new National Assembly will do besides argue and gridlock.

Chavez doesn’t have sufficient votes to impose his will via the legislature, and MUD’s 65 + PPT’s 2 seats aren’t enough votes to reverse anything the previous all-Chavez assembly approved during December 2010.

But Chavez does have his special powers to rule by decree for 18 months and ignore the assembly. Chavez also has the new Supreme Court in his pocket.

Chavez appears to be in control, but appearances frequently deceive.

It is still Christmas this week in Venezuela. The New Year starts next week when everyone returns to the reality of their respective daily lives, millions of Venezuelans who will encounter harsher days immediately.

Chavez and his Bolivarian gangsters have been threatening violent confrontations with everyone since last September’s elections. Indeed, Chavez appears to be longing for a bloody fight.

But perhaps Chavez should be careful about what he wishes for, because violence could erupt unexpectedly in places and ways that no one anticipates.

I believe that 2011 will be a worse year for Venezuela than 2010, in every way.

Tensions are heating up nationally, more even than in the months before April 2002. But this time there’s no opposition leadership to channel and direct the “arrechera” of the Venezuelan pueblo.

Perhaps I’m engaged in a bit of wishful thinking, but I think that Chavez and gangsters have made some very dangerous strategic and tactical mistakes over the past month – dangerous to the both the regime’s survival and also the stability of Venezuela in the near term.

These mistakes include (1) the passel of laws approved unconstitutionally/illegally by the outgoing almost all-PSUV National Assembly; (2) the special powers that Chavez was granted to rule by presidential decree for the coming 18 months; and (3) Chavez’s latest nationwide offensive aimed at stealing privately-owned homes under the pretext of “resettling” thousands of Venezuelans left homeless by heavy rains/flooding in November/December.

Venezuelans returning to their daily lives as of next week also will quickly confront very substantial rises in the prices of everything they consume, but particularly food and medicines.

The numbers are simple: the multi-tiered BsF exchange rate was unified from BsF.2.60 to BsF.4.30 asof 1 January, and Venezuela nowadays thanks to Chavez’s thieving ways imports over 85% of everything that it consumes (mas o menos).

Higher prices, more shortages of everything, and fewer job openings in the private sector, plus more unemployment/poverty and more violent crime as a result. With private estimates of the homicide rate in Venezuela last year ranging from over 17,000 to some 25,000 killed, it’s not difficult to imagine still greater social mayhem in store for the populace during 2011.

I believe that Venezuela’s economy will remain in a slump this year even if the price of Venezuelan crude oil hits $100/bl. Companies aren’t investing except to maintain capacity and maximize profits; even Pdvsa’s good buddy Chevron admitted in 2009 (in one of the leaked Wikileaks embassy cables) that it was taking profits out of its joint ventures with Pdvsa because it had stopped making fresh investments.

Pdvsa is broken. Even at $100/bl Pdvsa cannot generate the revenues it needs to fund its investment plans, maintain its existing operations and also feed the Chavez regime’s voracious fiscal appetite.

Chavez can’t offset the structural decline in oil revenues by hiking non-oil taxes either. And if Chavez continues stealing privately-owned lands, companies and other productive assets, non-oil tax revenues will of course decline.

But Chavez has already launched his presidential campaign. Today Chavez confirmed he will seek re-election at end-2012. This means that the Chavez regime will continue borrowing as much as it possibly can this year.

In fact, the regime officially plans to borrow at least $8 billion in 2011 on top of the roughly $85 billion of total government/Pdvsa debts currently outstanding.

Who knows? Perhaps the regime will manage to find $8 billion in new debt this year.

But the last two debt bond issues floated by the Chavez regime in 2010 came to market at 16% to maturity, worse than Greece, which is to say “Eímaste patí̱same.”

Bolivarian idiots like Jorge Giordani and Rafael Ramirez claim falsely that the revolution/Pdvsa has very substantial untapped borrowing capacity.

But if one calculates Venezuela’s GDP at end-2009 at an average exchange parity in 2010 of BsF6.50/$, the country’s GDP in US dollar terms work out to about $118 billion – vs total government/Pdvsa indebtedness of about $85 billion at end-2010.

About Caracas Gringo

Representing less than 0.00000000001515152% of the world population as of 31 December 2011.
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4 Responses to Venezuela in Greek: Eímaste patí̱same

  1. CuervoBlanco says:

    So what’s new? I’ve got a little bit of a confusion here too. All your last posts lead in one way or another to say that Chavez has got us all by the balls. And now you say he appears in control but appearances can be deceiving… huh?


  2. Lazarus says:

    Any comment regarding possibility of food shortages? Some speculate this could occur, with resulting “social disturbances,” as early as mid-2011.


  3. Roy says:

    Ok, I give up. What does “Eímaste patí̱same” mean?
    CG: “We’re fucked”


  4. FJR says:

    Had to lookup Ειμαστε πατήσαμε! hahaha … Indeed we are….


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