Days ago, I had a good laugh at VP Jorge Arreaza’s bizarre contention that there was some kind of private conspiracy to jack up the monetary liquidity numbers – an instance of blame shifting that was so wacky, so far over the top, it crossed right into self-parody.
Afterwards, as I mulled over this whole farce, I wondered if, in principle, there is any practical way private players could jack up the liquidity numbers, if they were so minded.
I couldn’t think of any, but one of my egghead economist readers piped in with this:
There is only one way in which a set of private agents can make the central bank increase the stock of currency in circulation: by selling foreign currency to it. The central bank has to buy dollars from any Venezuelan or visitor who wants to exchange them for bolivars. So the private sector could conspire to sell all its dollars en masse to the Central Bank and force it to turn on the printing presses.
So Arreaza was clearly right, as the last few months have been marked by nothing so much as a mad rush of private agents scrambling to bring their dollars back into the country for 6 bolivars and 30 centavos each, right? Right?!
Hmmmmm…ok, so it’s not a very promising conspiracy plan.
And yet, I do know of one economic warrior willing to give it a shot:
@NicolasMaduro: "Los invito a que invirtamos en Venezuela, si usted tiene capital ahorrado en el exterior, tráigaselo a Venezuela"
— PDVSA (@PDVSA) November 12, 2013