Hyperinflation Accelerates

For Thursday, January 25, 2018. Translated by Javier Liendo.

Photo: A Todo Momento

93 minimum wages are required to purchase the Basic Food Basket in Venezuela, more than three minimum wages per day, according to Cendas’ estimates. But that was in December 2017, when the basket’s price was Bs. 16,501,362.78, 129.5% more than in November and 2,927.8% more than in December 2016. The price of all items rose and even the least expensive rose by 50%.

The gap between controlled and market prices is 140,433%.

As if that was not enough damage, Conindustria chairman Juan Pablo Olalquiaga cautioned that nearly 40% of companies associated with that organization could shut down in 2018 for the insurmountable lack of raw materials, the drop in production and dwindling sales, which will further intensify the already considerable supply crisis. Economist Michael Penfold estimates that annual inflation in the first two weeks of January reached 150%.

Fret not, Dicom’s here

Vice President Tareck El Aissami announced yesterday that Dicom’s currency auction system – suspended since August 2017 – will be reactivated today, with modifications that will make participation more attractive, according to him: bands system so that the private sector can make offers “through a transparent regulatory mechanism,” advantages for exporters and incentives for auctions. Strangely, he didn’t talk about euros, yuans or rubles; but he did talk of the role played by economic Vice President Wilmar Castro Soteldo, to explain how the system works.

On Twitter, economist Asdrúbal Oliveros commented:

“Venezuela’s foreign context is so unfavorable that without paying debts or allocating foreign currency to the private sector, international reserves can’t catch up. The ‘new’ Dicom won’t do much.”

El Aissami didn’t say a word about FX controls which must be lifted.

Padrino decides

Defense Minister, and also Sovereign Supply Mission Chief, Vladimir Padrino López, issued a resolution published in Official Gazette with which he restricts the authority of governorships and mayorships and urges them to “abstain from carrying out actions of food control and supply that involve the percentage retention of items to products, distributors and service providers,” because those are his office’s responsibilities. Additionally, the previous Official Gazette shows a joint resolution of the Economy VP, the Sovereign Supply Mission and the ministries of Agriculture and Fishing that bans agro-food product exports for six months. More controls on top of controls.

From anointed to self-proclaimed

While news spread that CNE will block MUD’s revalidation in the seven states with active trials for alleged fraud in the signature collection process for the recall referendum of 2016, Nicolás proclaimed himself the presidential candidate.

He couldn’t wait for February 4 and, breaking his word, he succumbed to the joy of making promises he won’t fulfill, bonds to accelerate hyperinflation and even a bank for transport workers, those who can’t even pay for car oil right now. Curiously, he promised that he won’t fail them, as he already did; he repeated that he’s never aspired to a post, while he tries to run for re-election, and he discredited opposition pre-candidates as bates quebrados, when, well… you know. He didn’t forget to add another oxymoron to his long list: “We’ll run a love-filled campaign, we’ll sweep the floor with the oligarchic  candidates!”, and ignoring the hate law, he once again bet on polarization. He appointed the criticized minister Carlos Osorio as chief for the recovery of the automotive industry. Don’t forget that due to complaints against him, Osorio filed lawsuits against three lawmakers and with the support of Omaria Escalona, they were banned from issuing statements about him and they were ever forced to compensate him.

The opposition

Many opposition politicians focused their statements yesterday on the importance of unity in the decision of how to tackle early presidential elections. Andrés Velásquez said that the opposition must focus on positioning a single ballot, because he thinks it’s unviable that five parties manage to complete revalidation in two days, as the CNE demanded, and restated that these electoral conditions are even worse than on gubernatorial and mayoral elections. Henri Falcón presented his candidacy, dismissing the possibility of holding primaries and urging a consensus. Interestingly, he let slide that he’d only back away in favor of Lorenzo Mendoza, but it was even more interesting that his announcement was covered by VTV.

NGO Súmate chief Francisco Castro explained that the call for an election “before April 30” will leave Venezuelan citizens abroad unable to register in the Electoral Registry.

Abroad: nations

All of minister Jorge Rodríguez’s condemnation for the Lima Group didn’t prevent other nations to issue statements regarding the announcement of presidential elections.

  • Germany expressed concern and asked the government to guarantee that the election be held with enough time to accomplish “a fair and transparent electoral procedure.”
  • The United States condemned the “illegitimate” call by the National Constituent Assembly (ANC), stating that it wouldn’t be a free or fair election, that it wouldn’t reflect people’s will and that the international community would deem it anti-democratic and illegitimate.
  • Colombian Treasury Minister Mauricio Cárdenas cautioned about Venezuela’s imminent collapse and asked for an urgent economic plan for “the day after” with the involvement of bilateral institutions such as the IMF or the CAF, to provide the country with pharmaceutical products, supplies and raw materials.
  • Foreign Minister Heraldo Muñoz said that Chile’s involvement in negotiations is in question.

Abroad: figures

While the judges of Brazil’s appeals court unanimously sentenced former president and candidate Luis Inacio Lula Da Silva, to 12 years in prison for crimes of corruption, OAS chief Luis Almagro denounced Venezuela in the World Economic Forum, remarking the implementation of new “stronger, broader” sanctions that include the families of the officials responsible for the crisis and the political system.

Aside from this, Spanish president Mariano Rajoy said that he couldn’t care less for Nicolás’ criticism, restating that he believes EU sanctions to be well-deserved: “The only thing I want for Venezuela is democracy, freedom, human rights, respect for the people and the release of political prisoners” he said.

Hours later, Foreign Minister Jorge Arreaza announced that he called Mario Isea, ambassador in Madrid, for consultation. U.S. Senator Marco Rubio made headlines once again after asking president Trump for sanctions against Diosdado Cabello, but he also requested the Justice Department –along with democrat senator Robert Menéndez– to investigate an alleged link of high-ranking Venezuelan government officials with drug trafficking.

The black market dollar reached Bs. 261,517 and the euro, Bs. 323,166. No Dicom, old or new, can match that.

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  1. “OAS chief Luis Almagro denounced Venezuela in the World Economic Forum, remarking the implementation of new “stronger, broader” sanctions that include the families of the officials responsible for the crisis and the political system.”

    Going after regime wealth hidden or parked with family members would really tighten the screws on these criminals. Imagine their reaction to that fateful phone call, “daddy, the accounts have been frozen, all of them”.

    • More publicity needs to be directed at the corrupt Venezuelan leaders astounding wealth.

      For example, Maria Gabriela Chavez is worth $4.5 billion without doing anything productive in her life.
      At today exchange rate, $4.5 billion = 1,174,500,000,000,000 bolivars. That is 1.17 Quadrillion Bolivars.
      Maria Gabriela Chavez is a quadrillionaire in an impoverished country and she still lives in government supplied housing.

      What is the worth of the Maduro family assets? Publicizing this strongly while people starve could help get Maduro out of office. Cabello and others are not that far behind

      • Godgiven Hair is from near this area orginally, El Furrial in Monagas to be exact. Word locally is that he owns on the order of 50 farms of significant size across the country. I heard one guy say he owns farms he’s never visited. Don’t know the veracity of any of it, but it wouldn’t surprise me in the least.

        Yeah, public humiliation of these thieves is a great idea. Problem here is twofold.
        There’s no functioning opposition press to get the news out consistently and more often than not, those who hear the news are not only not surprised by it, they expect it, and readily admit that they themselves would do the same if they held such positions of power.

        It’s a cultural thing.

        • I have very good contacts in Panama who assure me Godgiven Hair owns enormous amounts of companies, hotels, marinas and real estate there. He also owns various companies here in Spain, apparently he uses his nephews to front those businesses.

        • I was under the impression that land ownership was controlled by the government and “owners” only had control of improvements. Is this not the case?

          • waltz, that is the case for probably 90 or 95% of the land in Venezuela. It’s government-owned and the owner can claim only the improvements. Having said that, 5% of Venezuela is still a lot of land that one can own outright and use for mortgage purposes.

            And then there’s that “other way” of using your land for mortgage purposes.

            My former ranch neighbor pulled the right strings at INTI ($$$$$) and the coordinates of his 500 hectar milk farm suddenly appeared inside a nearby piece of private land that he owned.

            That was Step 1. Step 2: Go to the bank, Step 3, Get a big loan, Step 4, Don’t pay loan, Step 5 Bank wants to repossess, Step 6 Bank finds out land is not privately owned and has therefore been defrauded. Step 7 Bank does nothing because guy is former military. Step 8, Guy laughs his ass off.


  2. Not even in my wildest dreams I imagined Venezuela falling in this nightmarish hole. Will the regime last until April given the utter destruction of the economy? How the fuck is Maduro a candidate again? Will Mendoza be a candidate as well? Will abstention be the best answer to this electoral dilemma? My head is seriously spinning…

    • It looks like their ships literally have come in and they will survive a while longer. Within the last 3 days (Jan 23, 24 & 25) some 10 cargo vessels have entered Puerto Cabello. I see several have come from Mexico (Tampico). These most likely have bulk corn cargoes and several from the St Lawrence Rover (Canada) most likely with wheat.
      In my mind this would dictate the timing of the election call as it will take several weeks to discharge, process and distribute these cargoes….just in time for the PSUV election win.

  3. Another throw-back Chvista goes after Diosdado. Yes, I know there is a history. Clearly, Maduro and Hair do not have editorial control of Aporrea.

    “And I tell you once, Diosdado: your behavior is immoral. This type of defamation, of persecution, you do it every time in your television program. And, more immoral still, you use state resources to do it. Public resources, of all Venezuelans, for political-partisan, group and personal benefit. That makes you a corrupt, because this is embezzlement of use. Do not you think that such a procedure is criminal? Say it yourself. Keep in mind the continuous defamation against many people; the incitement to hatred, to mockery, to political persecution. Done repeatedly, publicly, and notoriously. And to the one who half complains, you accuse him in court, manipulating the thing.”




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