The Economist itemizes how the Maduro regime continues to criminalize dissent:
VENEZUELA’S “Bolivarian” regime is lurching from authoritarianism to dictatorship. On February 19th it arrested the elected mayor of metropolitan Caracas, Antonio Ledezma. Then it moved to expel Julio Borges, a moderate opposition leader, from the National Assembly—a fate already suffered by his colleague, María Corina Machado, ejected last year. Leopoldo López, another opposition leader, has been in jail for a year and is now on trial. Almost half the opposition’s mayors now face legal action. The regime’s favourite charge to level at hostile politicians is plotting to overthrow the government, often in conspiracy with the United States. But it is the president, Nicolás Maduro, who is staging a coup against the last vestiges of democracy. Venezuelans call it an autogolpe, or “self-coup”.
Hugo Chávez, who created and presided over the Bolivarian state-socialist system until his death in 2013, was repeatedly elected by Venezuelans, thanks to windfall oil revenues and his rapport with the poor. He took his majority as a mandate to squeeze the life out of Venezuelan democracy, seizing control of the courts and the electoral authority, and suppressing opposition media.
The Economist calls for other LatAm countries to become involved:
For too long Latin America has tolerated Venezuela’s abuse of democratic norms. The latest outrages have provoked expressions of concern from Brazil, the Organisation of American States and others. They must do more. They should demand the release of Mr Ledezma and Mr López and call for guarantees that the election will be fair. If they fail to get them, they should suspend Venezuela from regional groupings, such as the South American Union, which require their members to be democracies. The threat of becoming a pariah might just give Mr Maduro pause.
Over in Colombia, President Santos has offered to mediate between the Communist regime and the opposition, since “only dialogue can save Venezuela from its current crisis,” adding that the presidents of Brazil and Ecuador are also willing to help.
By calling for dialogue instead of demanding a stop to the government’s abuse, Santos and his buddies are willing to turn a blind eye to Maduro’s egregious violations.
The opposition in Brazil, however, are the ones on the right track as they passed by a large majority yesterday a motion repudiating Venezuela’s “violation of democratic principles” and demanding that Rousseff’s administration to harden its stance on Venezuela. The only three parties that didn’t join in were Rousseff’s own, the Communist Party, and the far-left PSOL Socialism and Liberty Party.
Gary Shilling at Bloomberg is saying, Get ready for $10 oil It has to do with the marginal cost of production,
or the additional costs after the wells are drilled and the pipes are laid. Another way to think of it: It’s the price at which cash flow for an additional barrel falls to zero.
Last month, Wood Mackenzie, an energy research organization, found that of 2,222 oil fields surveyed worldwide, only 1.6 percent would have negative cash flow at $40 a barrel. That suggests there won’t be a lot of chickening out at $40. Keep in mind that the marginal cost for efficient U.S. shale-oil producers is about $10 to $20 a barrel in the Permian Basin in Texas and about the same for oil produced in the Persian Gulf.
Also consider the conundrum financially troubled countries such as Russia and Venezuela find themselves in: They desperately need the revenue from oil exports to service foreign debts and fund imports. Yet, the lower the price, the more oil they need to produce and export to earn the same number of dollars, the currency used to price and trade oil.
Among the hardest hit are those nations that rely on oil for much of their government revenue and were in financial trouble before prices plunged. Venezuela along with its state-run oil company issued more debt than any developing country between 2007 and 2011. Venezuela has been downgraded to the bottom of the junk pile — CCC by Fitch — and credit-default swaps on Venezuelan debt recently indicated a 61 percent chance of default in the next year and 90 percent in the next five years. The nosedive in oil prices also is devastating African exporters Ghana, Angola and Nigeria, where oil finances 70 percent of the government’s budget.
Maduro has yet to fully account for how his government will meet its $10.3 billion debt obligations in 2015. A March 16 payment totally $1.1 billion is fast approaching and Venezuela’s economy is languishing.
I am not optimistic at all; even if Maduro goes, the country can remain under a dictatorship, just as Cuba has, for decades to follow.
Appalachian Ohio could benefit most, in part because the Ohio River could receive goods from the canal after they’ve made their way to the United States via the Gulf of Mexico and the Mississippi River or the East Coast and the Port of Virginia.
Inflation is at almost 70% per year. The multiple exchange rate system is wreaking havoc with Venezuelans’ daily lives. The Central Bank is printing money like crazy to finance an out of control budget deficit.
In the past week, the CEO of supermarket chain Día Día was arrested after a meeting in the presidential palace, two dozen of its store managers brought in for questioning, and all 35 stores taken over by the government.
Behind the Venezuelan government’s moves is its allegation that Día Día and other chains are hoarding food in an attempt to sow instability and overthrow the government.
The country’s economic doom can’t be blamed on fallin oil prices, either, since
Venezuela had the institutions it needed to prepare for a fall in oil prices. The main one was called FIEM and it was a Macroeconomic Stabilization Fund designed very specifically to prvent situations like the one we have today, by saving any windfall oil income above the average for the last five years in a rainy-day fund.
But we don’t even know whether Maduro is completely in charge or whether others are telling him what to do, including his wife Cilia.
But I am sorry to tell you, the Government is not acting as stupidly as many lead you to believe. To start, they got US 1.9 billion from the Dominican Republic, which purchased its Petrocaribe debt at less than half price. Then Citgo sold US$ 1.5 billion in a 2022 bond at a yield to maturity with a coupon of 11.5% and borrowed an additional US$1 billion from banks by pledging terminals and its shares. Not bad, US$ 4.5 billion at the blink of an eye in Maduro’s coffers. Jamaica could do the same and then Maduro may decide to close his eyes and send the gold to London and problem solved for 2015. Yeap, just like that, we are thinking 2016 and not 2015.
For now, since the regime will never admit that communism doesn’t work, and, unlike Cuba, it doesn’t have an embargo to blame yet, it needs scapegoats.
Investment funds of Franklin Resources Inc. and OppenheimerFunds Inc., which hold more than $1.5 billion in bonds issued by the Puerto Rico Electric Power Authority, convinced a federal judge in San Juan that bankruptcy law and the U.S. Constitution trump the commonwealth’s legislation.
The law, passed under threat of a fiscal emergency, would have allowed public utilities such as the power authority, or Prepa, to negotiate with bondholders to reduce their debt loads, potentially forcing investors to accept unfavorable terms, according to the funds’ complaint.