Hugo Chavez shoes, $67.00
Being stupid enough to wear them, priceless.
There are some things money can’t buy. For everything else, there’s MasterCard.
Hat tip: Venezuela News and Views – you’ll love his headline.
A study released in July by the non-partisan Brookings Institution found clean-technology jobs accounted for just 2 percent of employment nationwide and only slightly more — 2.2 percent — in Silicon Valley. Rather than adding jobs, the study found, the sector actually lost 492 positions from 2003 to 2010 in the South Bay, where the unemployment rate in June was 10.5 percent.
Looks like the Times buried the story.
Consider the following (emphasis added),
If the federal government’s regulatory operation were a business, it would be one of the 50 biggest in the country in terms of revenues, and the third largest in terms of employees, with more people working for it than McDonald’s, Ford, Disney and Boeing combined.
Under President Obama, while the economy is struggling to grow and create jobs, the federal regulatory business is booming.
Regulatory agencies have seen their combined budgets grow a healthy 16% since 2008, topping $54 billion, according to the annual “Regulator’s Budget,” compiled by George Washington University and Washington University in St. Louis.
That’s at a time when the overall economy grew a paltry 5%.
Meanwhile, employment at these agencies has climbed 13% since Obama took office to more than 281,000, while private-sector jobs shrank by 5.6%.
The Obama administration imposed 75 new major rules in its first 26 months, costing the private sector more than $40 billion, according to a Heritage Foundation study. “No other president has imposed as high a number or cost in a comparable time period,” noted the study’s author, James Gattuso.
The number of pages in the Federal Register — where all new rules must be published and which serves as proxy of regulatory activity — jumped 18% in 2010.
This July, regulators imposed a total of 379 new rules that will cost more than $9.5 billion, according to an analysis by Sen. John Barrasso, R-Wyo.
And much more is on the way. The Federal Register notes that more than 4,200 regulations are in the pipeline. That doesn’t count impending clean air rules from the EPA, new derivative rules, or the FCC’s net neutrality rule. Nor does that include recently announced fuel economy mandates or eventual ObamaCare and Dodd-Frank regulations.
Every red cent a business spends on compliance with bureaucratic rules is a cent the business cannot use to improve its products or its services, cannot use to hire new employees, and cannot use to increase its profits or share that profit with its employees.
Andy Puzder, CEO of CKE Restaurants, explains,
As if the news that Venezuela will transfer billions of dollars in cash reserves from abroad to banks in Russia, China and Brazil and tons of gold from European banks to its central bank vaults was not enough to scare away all foreign investment from the country, now Chavez will nationalize the gold industry, including extraction and processing.
Interestingly, Rusoro, the only large gold miner operating in Venezuela is owned by a Russian family,
Venezuela has some of Latin America’s largest gold deposits, buried below the jungles south of the Orinoco river. According to official figures, formal mining in the country produces 4.3 tons a year.
Chavez agreed last year to let gold miners export up to 50 percent of production, from 30 percent previously. The other 50 percent must be sold to the central bank.
But that did not satisfy foreign companies like Rusoro, which said the limits made it much harder for them to secure financing abroad, develop projects and create local jobs.
One victim of the dispute has been a huge but long-troubled project called Las Cristinas. It has been in limbo since the government canceled a development license with another Canadian miner, Crystallex, in February.
Rusoro had expressed interest in Las Cristinas, which has not been developed since the 1980s but has reserves estimated at 17 million ounces. Locals once found a 1-kilo (2.2-lb) nugget there.
But the company’s chief executive told Reuters in an interview in June that it could not take on the project unless the government scrapped its export rules.
Chavez said the government aims to fight “mafias” that have been taking some of the country’s gold; he may be referring to wildcatters and smugglers in the remote areas of Venezuela.
Imaginary mafias or not,
It’s unclear how the decree is different from a 1965 law that nationalized gold mining in the country. In 1977, the government granted itself exclusive rights for extracting gold.
George Maniere wonders if this is all posturing on Chavez’s part and what the effect would be on the physically-backed gold exchange traded funds (ETFs), while Martin Hutchinson asks, Is Hugo Chavez ahead of the investment curve?
Miguel Octavio watched on TV the three stooges discuss the move,
It was quite comic, if not tragic, to watch the idiotic trio of Merentes, Giordani and Chavez try to explain why they were moving Venezuela’s international reserves. As I have said before, I believe the gold should be in Venezuela, not elsewhere, as a normal policy, the problem is why these clowns are making this move right now. I initially dismissed the news about the reserves being moved, there was not much to be moved besides the gold, which I did not believe would be moved (and was not the main focus of the proposal) But these guys truly plan to move the gold, never mind how much it will cost. Time to worry!
Miguel asserts that the reason for all this gold lust is political,
it is clear (to me, at least) that this is political. Chavez wants to avoid sanctions if…that’s the hard part to guess, but I can only think of two things: US sanctions because of the Iran connection or UN sanctions if the Constitutional order is broken.
You can bet on the second. The gold will take a few months to get here. The timing is perfect! When the Constitutional order is broken, the gold will be here and the reserves will be depleted! These guys have a plan and it goes back to the Jose Vicente interview two weeks ago, Chavez still has doubts about democracy.
Venezuela faces international arbitration over nationalized gold assets from three companies including Crystallex International Corp. (KRY), a Canadian gold producer whose Las Cristinas mine was taken over by the government in February.
As of the writing of this post, oil is trading at $83.40. Chavez is undoubtedly aware of this; his Bolivarian Revolution is very expensive, and he’s running out of time.
He needs the gold.
Cross-posted at Conservative Commune.
Commenter Barry Davis,
The more troubling point is why now? What is Chavez planning, or what does he know is about to hit, that will trigger the rest of the civilized world (as opposed to the dictatorships and fellow traveler lead states) to try and freeze the accounts he is moving. Something is up.
UPDATE, August 19,
Linked by Venezuela News and Views. Thanks! Make sure to read that post.
President Hugo Chávez and his Iranian counterpart Mahmoud Ahmadinejad pledged to strengthen political and economic cooperation after they convened a meeting of delegates of both countries that will be held in September in Caracas, the Venezuelan Foreign Ministry said Tuesday in a statement.
In a telephone conversation, the two Heads of State welcomed the progress of bilateral cooperation and “agreed to convene the 7th meeting of the bilateral joint committee (…) in order to broaden and deepen the complementation for the independence and welfare of people,” said the text released by the Venezuelan Foreign Ministry, as quoted by AFP.
Hugo’s back in Caracas, from his latest round of Cuban chemo, and looking bloated,
Meanwhile, Venezuela Plans to Move Reserve Funds (emphasis added)
Venezuela plans to transfer billions of dollars in cash reserves from abroad to banks in Russia, China and Brazil and tons of gold from European banks to its central bank vaults, according to documents reviewed Tuesday by The Wall Street Journal.
The planned moves would include transferring $6.3 billion in cash reserves, most of which Venezuela now keeps in banks such as the Bank for International Settlements in Basel, Switzerland, and Barclays Bank in London to unnamed Russian, Chinese and Brazilian banks, one document said.
Venezuela also plans to move 211 tons of gold it keeps abroad and values at $11 billion to the vaults of the Venezuelan Central Bank in Caracas where the government keeps its remaining 154 tons of bullion, the document says.
Venezuela is unusual among countries of its kind in holding so much gold, with the 13th largest gold reserves in the world, according to the World Gold Council (most of the countries ahead of it are in the G10). But this has certainly served Venezuela well: the consistent rise in gold prices has effectively papered over a fall in its reserves this year, despite high oil prices.
Moreover, for Venezuela, whose government rather remarkably seems to be capable of “losing” $29bn, $5bn is small change.
Why the move?
Analysts said the planned move made little economic or financial sense, since Venezuela would be taking its money out of secure banks in safe countries and putting it in countries that are not as safe and perhaps in currencies such as the Chinese yuan or the Russian ruble, which are not reserve currencies. “It’s a big risk,” said José Guerra, a former official at Venezuela’s central bank. Mr. Guerra said he also had heard about the documents whose authenticity was confirmed to him by Central Bank officials.
Could be that Hugo’s getting more desperate as the chemo continues,
Neither Mr. Chávez’s type of cancer nor Mr. Chávez’s prognosis has been made public. Moving the reserves may signal that Mr. Chávez and his associates could be preparing some drastic political moves—such as canceling elections—that could incur international condemnation and perhaps trigger sanctions.
Therefore – since he knows he’s running out of time, he needs the gold and cash right now.
Is it possible that they are trying to get these reserves into a place where the new government can’t get at them?
Everything is possible.
Cross-posted in The Green Room.
This precipitous decision to take Venezuela’s international reserves out of secure accounts in Europe and the United States and move them to China and Russia will likely lead global capital markets to conclude that Venezuela is not a reliable country. Venezuela will no longer have the “international reserves” that are required to sustain any modern economy. The ability of the state-owned oil company, PDVSA, and the Republic to generate capital and attract investment will be seriously affected. And, placing these precious reserves in banks belonging to Venezuela’s biggest creditors in China and Russia may suit Chávez’s friends in those countries, but it is an unacceptable risk for the Venezuelan people.
Why notoriously corrupt leaders would want to get their hands on billions in gold is not a very complicated question. However, it is important to note that one of the reasons cited explicitly by Chávez’s decision document is the possibility that Venezuelan funds or dollar-denominated transactions could be frozen by the United States. Surely, Chávez’s advisors know that U.S. laws allow such sanctions only in the case of narcostates, sponsors of terrorism or mass murderers. We know that Chávez’s brother has pledged an armed struggle to keep power and his army chief has said he would never accept the election of an opposition president next December 2012. But, are Chávez’s would-be successors planning Gaddafi- or Assad-style massacres? If they would go that far, why would they even run the risk of holding a campaign and elections?
The idea that Chávistas would resort to brutal repression or would cancel next year’s presidential elections is unthinkable to many. But, just yesterday, few would have imagined that Chávez and his cronies would have risked the country’s economy and people for his own political advantage and selfish personal interests. If Chavez succeeds in treating the country’s international reserves as a petty cash box or pension fund for his inner circle, Venezuela’s fate will be forfeited to another generation of dangerous leaders.
The bus was built in Canada by Prevost,
The feds bought the two coaches for $2.2 million from Hemphill Brothers Coach, based in Tennessee. It installed custom interior upgrades into the Prevost shell, which accounted for about half the cost.
The contract lists the country of origin as Canada and place of manufacture as “outside U.S. – Trade Agreements,” a possible reference to the North American Free Trade Agreement.
Right on time for the Canada-Colombia FTA, too.
Sam Youngman of The Hill calls Obama a road warrior with an anti-Washington message. Really. Take a look,
If Obama brings his populist, anti-Washington anger back to the White House, pulling out the brass knuckles to battle with Congress, Democrats will rally around him.
Sam must have forgotten that by virtue of being POTUS for the past 2.5 years, Obama is Washington.
The question is, did the dog eat the recovery?
Once the bus tour ends, Obama goes to and returns from vacation, and returns to Washington, he’ll be giving “a major speech in early September to unveil new ideas for speeding up job growth“. This carries the sound of approaching thunder: the storm will be most likely a QE3. Obama’s job creation “plan” was the stimulus, and QE2. The plan was huge, unprecedented federal spending – that’s the only plan.
If Obama had any other plan, he would have unveiled it on day one of the Greyhound One tour, and would have stolen the show from the Republicans entering the presidential race.
What he has mentioned so far is stale,
On the second day of Obama’s three-day bus tour of the upper Midwest, the president worked off the blueprint he had used the day before, offering proposals such as extending a payroll tax cut, spending money to repair roads and bridges, and ratifying pending trade agreements.
More not-quite-shovel-ready road repairs, trade agreements that have been blocked by his own party for the past 4 years, and extending a payroll tax cut? Been there, done that. Meanwhile, Obama’s proposed budget was rejected by his own party, and the Democrats are now taking us into the third year in a row without approving a federal budget.
Hence, he’ll blame Congress.
Richard Fernandez looks at the possible results of that gambit,
In all likelihood, the President’s decision to “blame Congress” will mean an increasing polarization in politics on which basis he will be utterly dependent. He cannot now win on a rising economy so his last chance is to invoke the struggle 24×7. It would be an ironic political fate for the man who promised to be the great uniter and world Grand Bargainer. Ultimately people’s fates are bound up with the forces they unleash and not by what they say.
I’m a guest in tonight’s Political Vindication podcast, at 8PM Eastern.