Now that the government has ever-so-sovereignly declared that Bs.31,200 is the sovereign price of a ton of aluminum in the domestic market, why not try this fun experiment at home?
- Knock on Mr. Alcasa’s door and say, “Mr. Alcasa, I’d like a ton of aluminum, please.”
- Hand Mr. Alcasa his 31,200 bolivars.
- Put your shiny new hunk of metal on a ship, and take it abroad.
- Step gingerly past the hapless CVG marketing official whose job it is to try to sell an identical hunk of metal on the international market for $2,500, and hawk yours for the going rate (US$1,780).
- Bring your US$1,780 back to Venezuela, buy Bs.80,000 with them at the street rate.
- Go back to Mr. Alcasa say, “Mr. Alcasa, I’d like 2.56 tons of aluminum this time” as you hand him his 80 palos.
- Put your 2.56 tons of aluminum on a boat. (You may find you need a bigger boat this time.) Hawk ’em abroad for $4,550.
- Bring your $4,550 back to Venezuela, sell them on the street for Bs.203,820
- Knock on Mr. Alcasa’s door once more. “Jeepers, Mr. Alcasa, could I bother you for 6.53 tons of aluminum this time?”
- Ship them off, sell them for $11,630.
- Bring the $11,630 back, sell them on the street for 520,940…
- Keep doing this as long as there’s a scrap of aluminum anywhere in the country to be bought.
- Buy a Gulfstream, and a polo team.
It really is remarkable: chavistas insist, as a matter of ideological pride, on selling $20-bills for ten bucks, and then they swear the reason they keep running out is a massive CIA conspiracy.
(BTW, the aluminum purchasing-power-parity exchange rate implied by the new precio soberano is Bs.17.50:$1 or so…make of that what you will.)