Archive for the ‘Communism’ Category

Venezuela: Mileposts on the highway to hell

Thursday, October 23rd, 2014

Reading news about Venezuela brings to mind AC/DC lyrics,

Dont stop me!

I’m on the highway to hell
On the highway to hell!
Highway to hell!
I’m on the highway to hell

And I’m going down..all the way
I’m on the highway to hell

Fingerprints for food


Venezuela Readies 2015 Budget
Venezuela’s finance minister assured lawmakers that the country was poised to handle sliding oil prices and wouldn’t default on its debt, while proposing a 35% increase in the 2015 budget.

Venezuela, which depends on oil for 96% of its export revenue, has seen the price for its crude slide to $77.65 a barrel, the lowest since late 2010 and a drop of $15 since late September.

A scarcity of dollars has spurred shortages of basic goods in the import-dependent country and made investors increasingly nervous. Oil rich but cash strapped, Venezuela carries a total of $67.4 billion in debt issued by the government and state oil company, Petróleos de Venezuela, also known as PdVSA.

The country’s budget deficit registers at 16.9% of gross domestic product, government figures show, above the mark of countries like Greece and Spain during the eurozone debt crisis. Venezuela’s foreign reserves fell below $20 billion earlier this month for the first time since 2003.

Despite Riches, Venezuela Starts Food Rationing
Government Rolls Out Fingerprint Scanners to Limit Purchases of Basic Goods; ‘How Is it Possible We’ve Gotten to This Extreme’

At the blogs:
Venezuela: Is Default Truly A Four Letter Word?

The pain from the China loans

The situation is quite simple. Because of the loans we signed with China – them paying in advance for future shipments in oil – the drop in oil prices means Venezuela doesn’t just sell each barrel for less money, it also has fewer barrels available to sell to the market. Venezuela’s downturn is therefore made all the worse by the ridiculous conditions the geniuses at PDVSA signed on to.

In other words, a bad situation is made worse, and the hit in our fiscal income is all the larger.

Sing it, guys!



Cuba: NYT goes Duranty on ebola

Tuesday, October 21st, 2014

Walter Duranty, arguably the New York Times’s most [in]famous correspondent, earned his reputation as Stalin’s apologist. In keeping with this tradition, the NYT editorial board is touting Cuba’s Impressive Role on Ebola, actually parroting Cuba’s Communist propaganda (from the mouth of José Luis Di Fabio, the World Health Organization’s man in Havana), ignoring the fact that the embargo does not apply to medical supplies and equipment:

José Luis Di Fabio, the World Health Organization’s representative in Havana, said Cuban medics were uniquely suited for the mission because many had already worked in Africa. “Cuba has very competent medical professionals,” said Mr. Di Fabio, who is Uruguayan. Mr. Di Fabio said Cuba’s efforts to aid in health emergencies abroad are stymied by the embargo the United States imposes on the island, which struggles to acquire modern equipment and keep medical shelves adequately stocked.

In for a penny, in for a pound, the NYT rolls right along, exhorting the USA to

As a matter of good sense and compassion, the American military, which now has about 550 troops in West Africa, should commit to giving any sick Cuban access to the treatment center the Pentagon built in Monrovia and to assisting with evacuation.

For starters

Governments, China’s included, complain they simply don’t have enough experience with Ebola to send in large numbers: “This is a big challenge for our scientists,” said Qian Jun, team leader for the China Center for Disease Control Mobile Laboratory Team in Sierra Leone.

So the question is, Is Cuba Sending Unqualified Health Workers to West Africa? 

The Cuban dictatorship is willing to sacrifice anything — or anyone — for the sake of propaganda.

This appears to be the case of the health workers it has sent to West Africa to work on the Ebola virus.

The details that have been filtering out of Cuba regarding the terms and conditions that the Castro regime has given to these health workers are very concerning.

For example, the Cuban health workers have been compelled to agree that if they contract the Ebola virus, they will not be repatriated to the island.

Moreover, they have been warned of a 90% chance of no return.

As such, there has been a life insurance policy taken out for these health workers with the World Health Organization (WHO).

Surely the families are the beneficiaries of the policies, right?

Nope — the Cuban state is.

(It remains unclear whether the WHO is further paying the Castro regime for these health workers.)

In theory, the deal is that

Those fortunate enough to return have been “promised” nearly $10,000 per month — to be deposited in a Cuban state bank account during their absence — as well as a house and car.

Now, in practice, IF any are allowed to return, would the Cuban government actually pay, because no one outside the regime’s inner circle is allowed to collect.



Venezuela: Happy Halloween! Hugo Chavez M&Ms

Tuesday, October 21st, 2014

The M&Ms w Chavez image the cyanide pills. Savage capitalism. #F*ckThat I believe that coffee thing but this

How appropriate that, in keeping with a country doomed by the ghoulish chavista policies, someone came up with Hugo Chavez M&Ms in time for Halloween. Jaime Bayly had them,

Bayly says they are made in the USA, and calls it “a triumph of capitalism”. I find it vomitive.

As I understand it, Mars Corp. will personalize M&Ms, so apparently it doesn’t matter whose picture you send them as long as they get paid.

On the other hand, a bunch of dictator-themed M&Ms would be perfect for a house of horrors. You could do a Pol-Pot, Stalin, Marx, North Korea Kims, Fidel Castro assortment for a Communist theme.

In Venezuela, only the well-connected chavistas will be able to afford them, though. Everybody else will be standing in line trying to scramble a day’s rations.

Venezuela and the falling oil price UPDATED

Friday, October 17th, 2014

Venezuelan oil revenues prop up not only the Maduro government but also Cuba, and other countries receive Venezuelan oil through Petrocaribe.

Venezuela Vulnerable to Oil’s Fall
Fears among investors grow that Caracas could default its debt, as crude’s decline exacerbates the country’s recession and widespread consumer shortages.

Oil exporters from Russia to Iran are suffering with the lowest crude oil prices since June 2012. But few are as vulnerable as Venezuela, where a free-spending populist government had already been grappling with a recession, widespread shortages, and massive protests earlier this year.

Analysts expect that the Venezuelan barrel—heavier and more expensive to process than Middle East oil—will have fallen below $80 when officials announce this week’s price on Friday, which would be the lowest since late 2010. Last Friday, Venezuelan officials said their country’s crude had fallen to $82.72, nearly a $10 tumble in a little over a month.

Years ago I estimated that the chavistas need a minimum of $75/barrel for their agenda.

We’ll see what happens if it goes down to that number.

UPDATE:
Steve Hanke on Oil Price Blues (Read: Dangers) for Some

If oil prices stay below $90 per barrel for any length of time, we will witness massive fiscal squeezes and regime changes in one or more of the following countries: Iran, Bahrain, Ecuador, Venezuela, Algeria, Nigeria, Iraq, or Libya. It will be a movie we have seen before.



Venezuela wins U.N. Council seat

Thursday, October 16th, 2014

I told you on October 13:

it’s very likely Chavez’s daughter Maria Gabriela Chavez will soon be sitting next to an American diplomat at the United Nations Security Council.

Sure enough, today:

Venezuela, Malaysia, Angola and New Zealand won seats on the United Nations Security Council on Thursday for two years from Jan. 1, 2015, while a run-off vote between Spain and Turkey was taking place to decide who gets the fifth available spot.

The 193-member U.N. General Assembly elected Venezuela with 181 votes in favor

Somewhere in the Kremlin, Vladimir Putin is laughing.

“All communist countries revert to capitalism eventually. Some just get there quicker than others”

Tuesday, October 14th, 2014

Michael J. Totten continues his excellent reporting by going From Havana to Hanoi, and concludes,

Decades of disinformation to the contrary, Cuba never had a kinder and gentler version of communism that works. No, the island is not North Korea or Cambodia under Pol Pot, but it was never any better than Vietnam or East Germany in the 1970s and the 1980s. It just had better PR. The sorry truth is that of all the communist regimes that have ever existed—with the single exception of North Korea’s—Cuba’s is the most stubborn, the most reactionary, and the slowest to figure out how economics actually works.

Read the whole eye-opening thing.

Venezuela: “Underperformance” doesn’t begin to describe it

Tuesday, October 14th, 2014

Even when the Venezuelan government has not allowed its own numbers to be verified for almost a decade, and stopped reporting various standard economoic indicators several years ago (practices which all started during Chavez’s administration), the numbers that it does report confirm The Economist’s appraisal of the country as Probably the world’s worst-managed economy.

Right now the government,

facing deteriorating economic conditions at home, is quietly slashing imports to cover foreign debt payments amid a severe hard-currency crunch.

Carmen Reinhart and Kenneth Rogoff write on Venezuela’s Spectacular Underperformance 

Maduro, of course, rules over a major oil-exporting economy that is so badly mismanaged that real (inflation-adjusted) per capita GDP today is 2% lower than it was in 1970, despite a ten-fold increase in oil prices.

The relevant reality now is the long-term plight and dwindling standard of living of the average Venezuelan citizen. Over the past 45 years, as Venezuela’s real per capita GDP fell, US per capita GDP roughly doubled and Chile’s per capita GDP nearly tripled. And neutral observers project that 2014 will be even worse for Venezuela – not surprising, given the chaos of the country’s policy fundamentals.

Venezuela repeatedly has defaulted on the moneys it owes on pharmaceutical imports, food, airlines, oil suppliers and joint-venture partners; Reinhart and Rogoff ask

historically there have been many external defaults without domestic defaults, the converse is not true: nearly all domestic defaults are “twin defaults” that also involve external creditors. Will the Venezuelan case be different?

In other words, the two things go hand in hand, and it’s only a matter of time before Wall Street bond-holders are treated like foreign airlines.

However, Francisco Toro points out that

in the technical sense that’s relevant in market terms, Venezuela is not in domestic default.
. . .
This is the crux of the Great Venezuela Macro Debate of 2013-2014: to what extent can the government’s patent inability to meet its obligations be ascribed to a basic inability to pay, and to what extent is it just the Nth insane distortion you get when the government makes it illegal to pay a penny more than 77 cents for a $10 bill?

So, while we split hairs on exchange rate misalignments and the like, Venezuela undoubtely becomes a land of political killings and gang turf wars.

Related: Venezuela: The Left vs. reality



Why Venezuela should not have a seat at the UN Security Council

Monday, October 13th, 2014

Mary O’Grady explains,
THE AMERICAS
A Test for Obama on Venezuela at the U.N.
Cuba’s pawn wants a seat on the Security Council. We should work against it, as we did in 2008.

De facto control of Venezuela by Cuba ought to trouble all peaceable nations. Cuba violated a U.N. embargo on arms shipments to North Korea in 2013 when it put a load of weaponry on a North Korean vessel headed for Asia. The Venezuelan National Guard is a partner of Colombia’s drug-trafficking terrorists. Numerous terrorism experts warn that Venezuela is working closely with both Iran and Hezbollah to make trouble in the West and that the country has become a transit point for Iranian agents seeking to gain a foothold in the Americas.

Permanent members Russia and China would gain a reliable ally on the Security Council by adding Venezuela. It is true that the U.S. has veto power to block dangerous moves by a member. But Venezuela could influence the discussion agenda and would undoubtedly employ Cuba’s legendary propaganda tactics to do so.

Symbolically the elevation of Venezuela to the council would be a win for U.S. foes, and Venezuela knows it.

I don’t see the Obama administration doing anything about it. Instead, I say it’s very likely Chavez’s daughter Maria Gabriela Chavez will soon be sitting next to an American diplomat at the United Nations Security Council.

Venezuela: Exxon wins $1.6 billion settlement

Friday, October 10th, 2014

Back in 2005, then-dictator Hugo Chavez started to expropriate assets in Venezuela’s energy, mining and telecommunications industries under the pretext of development and sovereignty.

Energy companies were given until late-2007 to accept proposed contract and compensation terms from Chavez’s government or risk having their assets seized.•

Exxon and ConocoPhillips rejected the terms, and Exxon took Venezuela to the World Bank’s International Center for Settlement of Investment Disputes, or ICSID. The ICSID ruled for Exxon, which Chavez promptly, and predictably, rejected. At the time there were 20 other cases against Venezuela at the World Bank’s tribunal, all triggered by the wave of state takeovers.

Now Exxon Wins $1.6 Billion Settlement for Venezuela Seizure

The ICSID award includes $1.4 billion for expropriation of the Cerro Negro project, $179.3 million for expropriation of the smaller La Ceiba project and $9 million in compensation for production and export curtailments, ICSID said. It will incur compound interest of 3.25 percent dating back to June 2007.

In a similar complaint, the ICSID ruled Sept. 23 that Venezuela must pay $740 million to Spokane, Washington-based Gold Reserve Inc. (GRZ) for taking its Brisas gold and copper project in 2008. Gold Reserve said on July 23 that it was seeking $2.1 billion for the nationalization.

About 28 cases filed by mining and oil companies remain unresolved at the ICSID, including those filed by Phillips 66 and Highbury International AVV.

Venezuela calls it “a favorable end for the republic,” (h/t Caracas Chronicles)

Which tells you Venezuela has no intention to pay Exxon. The thing is, the country must honor ICSID rulings to avoid default of sovereign bonds. The only certain outcome in the short term is that a lot of lawyers are going to make a lot of money.

Just don’t expect any payments any time soon.

No More Che Day

Thursday, October 9th, 2014