Don’t you love the way Nick Maduro crushed the money-changing mafias of Cúcuta? Back during Cienbologeddon, only a month ago, he withdrew the 100-bolívar notes. At the time the bolívar had just spiked to an all-time high of 4,500 to the dollar before it settled back into the range of 3,500 or so.

Maduro’s “brilliant” strategy cost the country a city or two, but Ciudad Bolívar is way off the main thoroughfares around Caracas anyway, so in all likelihood no one would notice. Plus it worked! The price of the bolívar strengthened against the dollar.

Granted, that was a month ago. The price in Cúcuta is 3,700 y pico and rising. In other words, writing off Ciudad Bolívar bought us a month or so, so it’s all good. It was all worth it for the magic trick of making all the 100 bolo notes disappear. Except they’re still in circulation.

Once again, the market wins.

So it was time for other measures. That’s where ItalCambio comes in. New Forex Bureaus, we’re told, will spring up all around the Venezuela-Colombia border. Except they don’t seem to exist yet. And their coming into existence at all is, well, sort of a big question mark.

The Italcambio link took me right back where I started: to the Google search page. Eventually I got to a page like so many others of the Bolivarian government: crammed with beautiful, tantalizing, but dead, links that lead to pages like this. But we’re told that they’re going to resolve the dollar problem and this time, the mafias, that is to say, the markets, will definitely be defeated.

Once again, the market wins.

As far as we can tell —and that’s not very far at all— the goal is to open up yet another price for the dollar. On the border, 750 bolos will buy you dollar, provided you jump through some as-yet-unspecified bureaucratic hoops. That’s a bit more expensive than through Dicom/Simadi/whatever they’re calling it this week (Bs.677, at last count) but still way, way cheaper than the parallel rate.

Which means the arbitrage opportunities are still there: if you can turn Bs.750 into $1 at the border forex bureau, you can turn $1 into Bs.3,700 in Cúcuta, then turn those Bs.3,700 into $5 back at the Forex bureau: lather, stew, repeat, forever.

In a display of incredible pathos, the new Finance Minister and Vice-president for Economic Policy Ramón Lobo tried to sell us this steaming turd-pile on the border as a measure to reel in the parallel dollar rate. They’ve learned nothing. Nothing.

It’s the same old story, again and again, until the end of times. The government keeps trumpeting “reforms” that are exactly the same as the reforms they unveiled six months ago and eighteen months ago, and thirty months ago, and keeps repromising a final victory against the evil forces of supply and demand again and again like they’re Dory, totally unaware of what’s come before.

Marxists like Maduro might think they’re through with the market, but the market’s sure not through with them. 

15 COMMENTS

  1. “They’ve learned nothing”? Really? As you say: “lather, stew, repeat, forever”. They have learned it all a long time ago.

    • Exactly. The higher the black market rate, the better for los guisos. Nothing in Venezuela happens without a corrupt interest at heart, and arbitration seems to be their preferred stew.

  2. Same old story over and over again.
    1. Maduro does something really stupid affecting negatively the lives of millions of Venezuelans.
    2. The Media reports.
    3. We complain on social media that nothing is done about it.

    Year 2021
    1. Maduro does something really stupid…

  3. Carlos Dorado, the owner of Italcambio, is finally getting his reward after publishing hundreds of articles blaming Dolar Today for everything gone bad in Venezuela.

    The regime’s desperation for being accepted back in Mercosur to keep their democratic façade makes them to use the same swindle they did when they entered the first time there: The so called “bank accounts in foreign currency”, a convoluted system designed by resident marxist nutjob Giordani aka king of the deep-fried pamplina that they used to claim that Venezuela had “free and full access for foreign currency for everybody” which of course was just a dirty lie.

    Now enchufado Dorado will wash all the narco-rat dollars with his exchange houses, because the plain people who would most likely seek the dollars to try to protect their savings from the ravenous inflation have already found that the on-line system to acquire the appointments is down, let’s not forget also that in the truest chavista-style, they’re imposing the arbitrary and useless limits on how much currency could somebody acquire:

    http://www.lapatilla.com/site/2017/01/18/nuevas-casas-de-cambio-en-zulia-inician-operaciones-sin-efectivo/

    http://www.lapatilla.com/site/2017/01/17/en-casas-de-cambio-de-la-frontera-se-podran-canjear-hasta-500-dolares-al-mes/

    http://www.lapatilla.com/site/2017/01/17/transacciones-en-casas-de-cambio-seran-con-cita-electronica/

    This is just another useless drowned kicking from the regime that’ll worsen the economy.

  4. In theory, if the supply of Dollars @755BSF is enough it should drive the exchange rate in Cucuta.

    I bet the strategy (although misguided) is that the market across the border is smaller but serve as a price signal to the whole country if they open the supply at the border and drive the price down they think they can drive down the price for the whole country.

    Probably there won’t be enough supply at the border and therefore it would cause the measure to be just another way to get corrupt government agents to become rich.

    What’s going to happen is that the Cucuta dollar will stop been a good indicator of the black market exchange rate but other will come.

    • If people can buy at 755 and turn around and sell for 3500, how could there ever be “enough”? The deal s too good, and they’ll run out of the dollars at 755 very quickly.

    • More likely nobody will sell their pesos there when Cúcuta offers a more attractive rate, and as a result there will be no pesos to sell on the Venezuelan side

  5. According to La Patilla some people have already tried to purchase US$ in these new places and been told that they must request the US$ via an internet page ( which of course never opens) accompany their request with their income tax filing and cant buy more than 200 US$ in cash or 300 US$ in bank transfers ….., !!

    Doesn’t seem like they really want people to buy their dollars in these new places !!

  6. The Chavista revolution is a bit like Aristotelian astronomy. Every time they find things are not as they think they should, they do the same, they add more epicycles and call it done till the next time.

    In this case, if 1 forex control doesnt work, you add 2, if 2 doesnt work, 3…

  7. An academic study was done some years ago on five cunning gambits which Mao Tse Tung used to maintain his ascendancy as Supreme Leader of China , among them was his practice of ‘churning’ the news with false extravagant and theatrical announcements which ultimately never led anywhere but created the impression that something dramatic was being done to advance the countrys future…….or solve its problems……!! He kept giving these announcements with great fan fare every so often ….so people would feel that his was a very effective leadership …which it actually was not except to the extent his manipulations kept him in control of things …..!!

    I sometimes think that Maduro and Co have taken a page off Mao’s book of magic tricks in the way they apply this favoured gambit of his ..again and again……!!

  8. If you fix the exchange rate then you must sell to everybody at that rate. Otherwise it is a bogus rate which only privileged people can buy while the black market rate is still the real rate.

  9. Meanwhile Chavismo celebrates its 18th year with total power. And the proverbial frog doesn’t dare to jump out of the burning pot.. People continue to get used to the mess, the long lines, lack of products, decreasing purchasing power, loss of liberties, constant thrashing of the constitution, axfixiating traffic, highest crime and inflation, constant political scandals and faux-pas… It all seems quite normal by now, doesn’t it? Heck they even seem to get used to a very poor diet, cheap carbohydrates and no protein, even getting used to being hungry, with less than 3 decent meals per day. Many seem resigned, defeated, afraid. Others get used to living in survival mode, living with high crime and countless murders as if were a normal thing, living with astronomical corruption everywhere as the norm, going for their own ‘tigritos”, “enchufes”, palancas..

    Now that the filthy military, TSJ, CNE, BCV, ministers, governors, alcaldes are mostly corrupt, with almost 4 million public employees participating in the scams.. come the next Presidential elections: end of 2018. By then, the military will probably intervene with the CNE, stealing those elections too: they risk too much and have too much to lose. By then, it will be a full-blown dictatorship, Caban style.

    And “el bravo pueblo” will witness the 20th anniversary of Chavismo, and counting.. complaining in silence, getting more and more accustomed to their misery, decade after decade.

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