Photo: retrieved

Venezuela’s outlook is apocalyptic. As the oil industry collapses and hyperinflation torches what’s left of the economy, Maduro is tightening his grip on power and doubling down on destructive policies. Chavismo doesn’t particularly care about Venezuelans—instead, the governing clique is focused on staying alive, in power and out of jail as sanctions mount and they drift into diplomatic isolation.

Today, the DolarToday exchange rate rose to 5,600,000 VEF/USD and is a billion percent higher than on Chávez’s first day in 1999.

Left unchecked, hyperinflation will continue to cripple the Venezuelan economy and society, driving hundreds of thousands if not a million or more of refugees into Colombia, Brazil and elsewhere this year. Today, the DolarToday exchange rate rose to more than 5,600,000 VEF/USD and is a billion percent higher than on Chávez’s first day in 1999. In six to nine months, the VFX rate will have another three zeros and the FX rate will be a trillion percent higher than 1999. Such is life in the world’s worst managed economy.

Incomes have fallen 98% in real terms since 2013, so even if people earn five times the minimum wage, it’s five dollars a month or three U.S. cents an hour—not enough to feed a single person, nevermind a family. You hear of people fainting because they didn’t have breakfast or dinner the night before. You hear about bank executives and engineers that quit to clean toilets in Miami. It’s all true: About 90% of the population is poor and 40% of Venezuelans eat just once a day.

Real demand for the bolivar has been slashed in four since December as Venezuelans have grown allergic to the local currency. As a result, Maduro’s regime needs to create new bolivars at four times the rate to get the same spending power, fueling hyperinflation. All the while, businesses are closing en masse as payments systems collapse thanks to an unprecedented shortage of physical cash.

But that’s just half of the story.

The collapse of the oil industry is as bad as hyperinflation or worse.

The collapse of the oil industry is as bad as hyperinflation or worse. In seven months, crude production has nosedived 470,000 barrels per day from 1.75 mbpd last December to 1.28 mbpd this August. To nobody’s surprise, analysts predict production will drop to a million barrels per day by year-end and continue falling through 2019.

PDVSA was already too broke to sustain production this year when Maduro replaced Eulogio del Pino, its halfway-decent CEO, with Manuel Quevedo, a military general with no industry experience. With employees quitting in droves, creditors attempting asset seizures and banks abandoning PDVSA on money laundering concerns, the new CEO paralyzed the company with a factional power-grab disguised as a corruption purge. He now plans to recover production at over 20,000 mature oil wells, which isn’t possible according to oil experts.

Declining oil production is extremely serious. Venezuela pays for imports with remittances and exports, but it basically only exports oil. So, if oil production and exports collapse, imports of food and medicine and everything else also collapse. Mismanagement at PDVSA directly translates to empty supermarket shelves and hunger.

This won’t end well.

One day, when daily inflation is at Zimbabwe levels, the electric grid will fray and all the engineers that can repair it will have quit. One day, when PDVSA is pumping just a few hundred thousand barrels a day, the turbines at the main hydropower plant will blow out and there won’t be money to repair them. And that’ll be that—power will go out for a whole city or state, and not just for 24 or 72 hours but for good. Same for waste collection, telecom and water.

One day, when daily inflation is at Zimbabwe levels, the electric grid will fray and all the engineers that can repair it will have quit.

Then it’s anybody’s guess. Hungry policemen and national guards could join in lootings and protests instead of repressing them and it could spiral out of control into anarchy and civil war, destroying what little is left and sending millions more refugees into the western hemisphere. This may sound far-fetched, but it isn’t far from the baseline “nothing changes” scenario.

Time is running short for the international community to re-think its strategy. Diplomatic isolation and targeted sanctions are welcome and appropriate, but they won’t destabilize the regime or trigger policy changes—not with the population subjugated by hunger, the political opposition in prison or exile and all democratic avenues for change closed shut.

Increasingly, it looks like the regime will only make way for a new government if it’s forced to do so by an external actor. Nobody wants a military invasion, but as Harvard’s Ricardo Hausmann argued, a peaceful power transition may only be possible if a military coalition of countries from the continent forces the regime to negotiate the terms of its exit. It’s time to discuss this option seriously, because if the international community does nothing and chavismo stays in power indefinitely, Venezuela will become a desolate wasteland.

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83 COMMENTS

  1. Ricardo Hausmann is one hyper-socialist and has no moral authority. He can be a teacher at Harvard, but Obama came from there too, so what?

    A peaceful transition to what? if this government had cojones or whoever takes charge, they would eliminate all the subsidies with a pre-set timetable of 5 years; no more free ride for anything including the USD and as I have been saying, there will be blood.

    Those ricos of East Caracas will survive while they remain hidden in the Country Club and other social attractions of their own. Like in a war, there will be casualties counted in millions, starving but the whoever government has to allow churches and other charities to feed the poor and the poor will have to work forcibly to rebuild roads, hospitals, and schools, etc. Close all the rotten hospitals and allow the floating hospital to come; maybe we allow the marines coming to put temporary sanitary infrastructure like they did in West Africa when the Ebola crisis was killing everyone, etc. These are meant to counter-balance the effects of no subsidies whatsoever. “Dios aprieta pero no ahorca” as my mother said in 1959 when Adecos almost killed us.

    As an example, when both Chile and Haiti suffered catastrophic earthquakes in 2010 (yes the same year of Catrina).

    Chile took a year to recover. Between amounts of money coming from reinsurance (about 70% of the insured losses) and donations, charity, and their own government technical abilities, they put the economy back on their foot. That was a gigantic property loss with relatively low casualties, almost all from a tsunami that hit a big party on an island in the south seas.

    Haiti never recovered but received at least 5 billion USD in aides and another 5 billion in charities, almost zero in insurance recoveries because almost nothing was insured.

    The property loss in Haiti was equivalent to the loss in Chile. But where is it all that money that went Haiti? For instance, some of the officers of the Red Cross tricked millions of American citizens making believe they would build 10,000 houses by themselves. The Red Cross built six houses, took nice pictures, the president came to inaugurate it (our traditions are ridicule); the remaining funds to build the remaining 9,994 houses vanished but there was enough to pay commissions, etc. This is well documented everywhere. I stopped making regular donations to the Red Cross. Venezuela has the chance now to become more like Chile than Haiti, but, I’m pessimistic; I do not believe in any Venezuelan except my wife. Venezuela will overpass Haiti in poverty levels. They lost shame a long time ago too.

    • My wife and I went to Haiti after the earthquakes, to help with medical and rebuilding… there is ZERO infrastructure. The people who have the equipment to help in the rebuilding won’t use it, the people who have access to the materials won’t sell it and the people who have the know-how won’t utilize it.

      It is the cultural. Nobody will do anything unless they can profit enormously by it. And the country slides more and more into the abyss… everyone is worried about everyone else doing better than them… and as a result, nothing gets done. The country is a giant criminal syndicate.

      • My uncle who is an important dude in international aid for Haiti suggest in private to those close to him that the solution is to depopulate Haiti and assign relocation quotas around the Americas.

        He too reports that there is no human capital which to rebuild .

        Commonly opens his emails to me, “I am writing from Hell on Earth, Haiti”.

        • God, I hope they do not relocate them here. There are too many of them as it is in the NY-NJ. Send them to the Patagonia or better yet to the Yukon Territories!

          • I think there is some neutrino bomb that only kills people. No, send them to Europe in makeshift boats.

        • If the people of Haiti are so desolate of the understanding of what it takes to build a country, why would any other country accept them? The people on the left in developed countries abort more than 95% of the babies that are not “normal babies” as they’re a burden to them. The people on the right in developed countries don’t want them as they speak a garbage French dialect that’s useless outside of Haiti and we actually don’t need mud huts built for us.
          The problems of Haiti started with the French, send them to France.
          or better yet, simply put up a giant sign that says, “Countries of the world, don’t do anything these people have done”.

          and… the Clinton family syndicate was heavily involved with “rebuilding efforts” in Haiti, that will go a long ways to explaining where the billions went.

          and… send them to the Yukon Territories? there’s only 1 Yukon Territory, the largest “city” is Whitehorse, population 25,000 and it averages -30 centigrade in winter, when people die, they bury them after spring thaw, as the ground is frozen frozen.

      • So what’s so different about Venezuelan culture. I think not much!

        Even in the “pre-chavista” good times, nobody would do anything to help others unless some payola was involved.

        While there still is some semblance of infrastructure, it is deteriorating at such a fast pace that soon Venezuela may be in the same shape as Haiti. Just ask people in Maricaibo how it is to live with out electricity or people all over the country who struggle on a daily basis to find water

        FYI … there are already “starving casualties counted in millions”. Just ask Columbia, Brazil, Peru, and ….. how many “starving and sick casualties” they see entering their country on a daily basis. The estimates vary from 2.5 to 4.5 million people.

        A unique form of civil war is already in process.

        • only a few took advantage of the pre-Chavez times. The same enchufado plus some additional pigs.

          BTW, I’ve found this clip super interesting and is made by a relatively unknown Venezuelan:
          Socialismo in Venezuela 🇻🇪- in only 5 minutes!!! https://youtu.be/CCIdm3cM6zQ

          Don’t miss it.

  2. A “peaceful power transition” implies that an external party agrees to foot the bill to clean up the mess while those who created the mess get to ride into the sunset and enjoy their ill-gotten gains. Not likely to happen.

    • It’s just classic leftist double-speak (“war is peace!”):

      “…a peaceful power transition may only be possible if a military coalition…”

  3. I guess Trump’s suggestion isn’t looking so crazy now. I wonder if he would even get a “thank you” for putting an end to this fiasco? Probably not.

    • My friend,

      Somehow, a malignant narcissist became the POTUS. He will not do anything for Venezuela, sht, my friend, he doesn’t know where Venezuela is.

      We have here, in the USA, a psychopath as a leader. Old and getting older, demented and getting more demented, and if he, the monster, is the voice of the Americans then God help us.

      Put on your thinking cap, McFrohike. We are looking at the gigantic, flawed, well-meaning country, the USA, being f’ing demolished. By this monster Trump.

  4. I have flip flopped on the peaceful transition, negotiated exit argument. I get the pros, the idea is to let these guys’ mismanagement slide for the greater good. However, the weaponization of food makes me extremely hesitant. Whether it fits the definition of a crime against humanity, I do not know. It should. Maduro, at the very least, deserves the guillotine.

    • The guillotine at the Very least although that would be too quick and merciful. Better to let him slowly starve in a filthy rat infested, disease ridden cell. That would be much more fitting.

  5. “Increasingly, it looks like the regime will only make way for a new government if it’s forced to do so by an external actor.”

    It won’t be the US.

    If China or Russia made a move, possibly (but I’m pretty sure they are done throwing resources down the Chavista rat-hole, so that is a non-starter).

    No, the problem has to be managed internally. SOMEBODY IS GOING TO HAVE TO GROW SOME BALLS and start acting like they want their country back.

    • Brb, getting on a plane and heading to Caracas.

      Gonna stand in front of Miraflores and do god knows what.

      Surely that will bring them down.

  6. “Today, the DolarToday exchange rate rose to more than 5,600,000 VEF/USD”

    I just checked – it is now over 5,900,000 VEF/USD.

    No problem. Maduro et al have it taken care of. By Monday, it will be down to 60:1, maybe 65:1 tops.

  7. I dont know about the politics of a regime change, how that may come about , whether by somekind of outside intervention or some internal power play or maybe a mix of different things ……as things worsen there is no doubt that such change becomes increasingly likely ……but one thing I do believe is that there are teams of very smart , experienced , well connected people, both Venezuelans and Influential Foreigners who already have a detailed plan for rescuing Venezuela ‘el dia despues’…….the day after, we are not talking about amateurs but about people who have experience rescuing broke down countries before and they know what works and what doesnt , they have the ear of important international bodies and states and will be able to call on a lot of financial and other resources the day after the change ocurrs ……., they are not interested in high tooting ideological labels ……thats for ignorant amateurs …….., there are two stages , one for just returning to basic functioning (they have a budget for that ) and then getting the economy and services to work towards a growing Venezuela that can hold its own again …….,apocaliptic visions give us great moral sattisfaction ..the weak and unrighteous are punished …….but thats not the language of doers but of cheap prophets bent on tooting their own visionary credentials !!

    • Bill hit the ball out of the park. That is how things will go once this despicable regime is gone. Great insight as always Mr Bass!

    • Back in ’45 Douglas MacArthur (Old White American Dude) took absolute military control of Japan. A bombed-out wasteland. NO natural resources, a totally destroyed merchant fleet, stripped of her empire, very little functioning infrastructure, and a defeated, demoralized population. Six years later the Americans pulled out, leaving behind a functioning nation.

      Half a generation later, Japan became the second largest economy in the world.

      The really tough question no-one is willing to discuss in polite company, is why that worked in Japan but is given zero probability of working in Venezuela.

      • When we invaded Iraq, the looting and wanton destruction by the liberated Shia had severe consequences.
        If a vacuum is allowed where that is replicated, then a 3 month job of repairing the electrical grid becomes a 3 year job, once the looters have pulled down the wiring and strip the copper, etc etc etc.
        That time/control situation will be extremely important.
        Lets hope that these “teams of very smart , experienced , well connected people” understand that scenario.

        • Think the monkeys have already looted it already, so damage already done. Plus, thank God that Venezuela is not a Muslim majority country that is armed to the teeth. The colectivos will be too busy to defend their own ass in their own hood than to go out and do well organized looting of strategic infrastructure. The IMF, World Bank and other hated institutions of the international leftist douchebags will step in and flood Venezuela with liquidity and many of the skilled professionals who are currently washing dishes and cleaning toilets en el imperio will be back in Venezuela sooner than later.

          If this shit falls, the recovery will be quicker than we expect.

          That said, you are right on the money that the security situation in the immediate days after these scumbags fall will be super important. I am sure that is the only thing the international community would be willing to do, once this bullshit falls, not before.

      • Unlike Venezuela, both Japan and Germany were first world powers. They came out of the war devastated, but their populations were educated, hard working, knew how to build industries, run an economy, and most important, they knew that you don’t build a country by waiting for somebody else to build it for you.

        Instead of being told that they have to create their own future, and that they can achieve anything they want, limited only be their ambition and their talent, the Venezuelan people have been trained to think that it is the government’s responsibility to provide for them. This is not new, it has been that way since my childhood, the days of CAP1 and LHC, and probably before then.

  8. One day, when daily inflation is at Zimbabwe levels, the electric grid will fray and all the engineers that can repair it will have quit. One day, when PDVSA is pumping just a few hundred thousand barrels a day, the turbines at the main hydropower plant will blow out and there won’t be money to repair them. And that’ll be that—power will go out for a whole city or state, and not just for 24 or 72 hours but for good. Same for waste collection, telecom and water.
    ———-
    Succinct and clear. My sense of it is “one day” is not so far off, and a cascade effect will likely occur because there is no back up plan, no resources to effect one even if it was in place, no viable executive staff to cary one out, and nobody from the outside willing to step in before – or for that matter – after it happens.

    “No human capitol wth which to rebuild” seems to sum it up.

    Bleak.

    • I once had high hopes that the country could transition again into a functioning successful nation.
      Even if it tilted (or remained) far past the European model of worker protection, and state charity,
      that seemed appropriate due to the oll wealth within. After all, it is nay impossible to find in human history a nation bestowed with such riches, not succumbing to greed. Better to manage that bounty, by setting up a government / public trust / compact that is highly charitable for those truely in need. To Education all, yes free and subidized medical, etc. But everything else, based upon the abilities and work ethic of the people.
      There are many examples of this model.

      But NOW, I have no confidence at all. None, zero, zilch, nada

      There will only be destruction, death, and unimaginable pain for the next 5 years, until there is nothing left, and only then a re-build will be possible.

      There will be NO outside intervention. No nation in Latin America has the ability, and certainly not the balls to shoot one damn bullet on another brother nation. I am NOT a historian, but please someone must be able to confirm the last time (if ever) another Latin Nation supported another militarily. It is NOT in the political culture to offend anothers internal policies no matter the abuses. Why? Simply because no latin nation wishes to be judged by another, so it will not judge. Complicit ignorance.

      What deluded mind, could come up with a scenero that China, or Russian wlll come calling. But I am in for a good fiction.

      The US – One can argue at least some reasons, from massive emmigration, loss of world oil supply, distrupting prices, to drug running, and corruption influencing our nation. But I am not convinced that the usa will bite. Besides the occasion article in the press, 98% of americans do not know and can give a shit about VZ.

      We Americans generally are very sympathetic toward others (Especially, when the press gets on an issue), but in our 200 year culture of living by ones actions, we I do not believe wlll come to the rescue to those who have chosen there own fate.

      As for Canada, Europe, they are followers, and only join any conflict only on the coattails of others. They can, now, yes today, send there navies to the shores of VZ, and they each and individually, could, now, today destroy VZ toy army. They today, have the moral obligation to prevent the massicure to come (as do all countries), but they will not.

      So what is left? A coup? or the public over-throwing of the regime, that brings in essence the military to power. That has always been the greatest possiblity, but now, it is hard to see. The seemingly complete control of the top brass of many of the most critical portions of the nation, will now have all the levers of power. Does that change anything? Not unless the military leadership changes.
      Tell me, why the current military leadership will willing resign, unless unwillingly put 6 feet under.

      There is simply too much still to plunder for the military leadership to restore the nation back to public political control.

        • You know, Jose, I think you don’t know what you’re talking about. “Canada and Europe are protectors of socialism…”

          (And I assume by Socialism you mean the Stalin/Pol Pot/Mao kind.)

          We here in the US, and that is you too, are now suffering under mailed-fist reaction, and the reactionaries are nowhere near as smart as you. They LOVE your pain. They will not discuss your pain with you; they aren’t smart enough.

          Trump is a fing bully. Trump has insulted our Canadian friends, our fing impossibly good-neighbor Canadian friends…and why?

          Because he is a malignant bully. My poor beloved country is lead by a schoolyard bully.

          Think, mi Jose…we were noble before Trump.

          • Cnuckles – are you reduced to using a US Proggie sock puppet to try and defend the Motherland?

          • You were never noble, there’s too much blood on your hands from 200 million murders, billions enslaved, uncounted families destroyed, and uncountable prosperity destroyed just in the last 100 years.

          • Trump has insulted our Canadian friends, our fing impossibly good-neighbor Canadian friends…and why?

            Bit of projection there from Canucklehead, given the multiple times he has insulted The Donald.

          • Don’t be silly: tell one thing you’re suffering from. The only thing that stops socialists like all cuerrent Democrats of Communism is the right to private property and your Elizabeth Warren is now calling to confiscate private property in the US. So what’s your credo: Marx doux?

      • No, I’m not Canucklehead, mis amigos. I am an American, a veteran, and an amateur historian. I know that Communism is not defeated by emotion, but by steps, by considered steps.

        Venezuela’s tragedy won’t be addressed by saber-rattling or name calling, which is Trump’s MO, the MO of a schoolyard bully. It will be addressed by intelligent people, rare intelligent politicians.

        (Proud to be confused with Canucklehead, though)

  9. I would suggest changing to conversation towards discussing WHO and HOW to ease towards a change of regime. It seems that the most legitimate institution to lead this effort would be the legitimately elected Asamblea Nacional. One focus might be to convince the majority of power holders(mid-level on down, the ones who actually carry out the orders) to not resist a regime change when the time comes, by making explicitly clear that those who have not violated the constitution will not be punished. This means that officers who have not trafficked drugs or tortured prisoners can play a very effective part by not relaying orders or maybe not picking up their phone when the order comes. This would also take advantage of the fact that the legitimate constitution is threatened.

    • You are right. One of the biggest mistakes the American made in Iraq was to get rid of all Ba’ath party members from the government, when many of the mid-level ones had only joined the party as a career move. The U.S.A. therefore made it it job of reconstituting Iraq much harder, because so many experienced personnel were forced to the sidelines, or into armed opposition.

    • This means that officers who have not trafficked drugs or tortured prisoners can play a very effective part by not relaying orders or maybe not picking up their phone when the order comes.
      But when it comes to corruption, I doubt that there are many with clean hands.

  10. All of the regional “leaders” that condemned President Trump when he suggested military intervention will be screaming for assistance as the tide of Venezuelan refugees continues to flood over their borders.
    I believe that the US and other countries would be much more open to assisting either home grown resistance or a regional response rather than leading an invasion.
    Venezuela is no Panama. Restoring services and maintaining order are going to be long term challenges. The you broke it, you bought it idea that would make any country that involves troops responsible for the long term security of the country is another factor.
    Venezuela is broken from Miraflores to the cop on the street. Every aspect of Venezuelan society is corrupt.
    Establishing a government of competent individuals will require a general amnesty. I have no idea what may come of people desiring revenge against former regime authorities.
    The best way forward is for Venezuelans to rise up. Create a working government in exile. Seek foreign assistance. Covert assistance in some ways is easier in the digital age than it ever was before. A computer virus can now do what used to require explosives.
    The people need to take the lead.
    Something that used to baffle me (and still does to some extent) is the lack of fathers providing for and protecting their families. Many of the families that I assist are single parent (mothers) with absent fathers. The culture of Venezuela is different from what many of us are accustomed to.
    In many other societies the fathers would be leading the fight against a regime that is responsible for so many children’s deaths. In Venezuela the students have been the victims of protests. The mothers protested. Where are the fathers?

  11. I just got a text from a buddy in Guyana, and he says they are closing both the Guyanese border and the Brazilian border effective immediately.

    Can anyone verify this? He said he heard it on the radio, and people in Guyana are very upset with the FANB.

    THIS SMELLS LIKE THE SHITSTORM IS ABOUT TO BLOW UP.

    Keep your heads down, gang. If you can’t, then protect yourselves.

    Good luck.

    • If this is true then I would expect Colombia to follow suite shortly. Then what? The lid will blow off the pressure cooker pretty quickly I would think.

    • The “Guyana border with Venezuela” is little more than a series of rivers, even on Anacoco island(where Venezuela has build what is starting to look like a base but says is not a base.) The Venezuelans refugees in Guyana seem to be a couple hundred Yanomamis that show up to border settlements in their canoes asking for food.

    • Who is “they”? Venezuela? or the other way around?

      Nothing comes up from quick Google search, other than prior temporary closings.

      • I couldn’t find anything here either. Mrs Guapo hasn’t been able to reach her friends via cell in 2 weeks.

        Things are so fucked up, who knows what is happening on the frontier, really?

    • Another Gringo, I think you are right. Today people were panic buying. In one supermarket, there were huge lines and of course many of the bank cards were not working. Then came a power outage. People were screaming Maduro MMG! Fuera Maduro. This was the the same supermarket that during 2014 I heard Chavista monkeys bitching about the guerra economica and how they wanted Leopoldos head on a stick. Even in the barrios they are sick of these mother truckers.

      Something will happen soon. Especially if this who cono monatario is a complete disaster…which it will be.

      I stocked up on food, water and booze for a whole month and I am getting ready for something to happen.

    • All ”Bolivarian” countries are now asking every Venezuelan to show up a passport. I know Brazil closed the border to Venezuelan.

      Something might be stewing.

  12. You (the people of Venezuela) voted in the Castro acolyte, Hugo Chavez.
    You let the Castro stooge, Maduro, take over.
    You need to rise up and smite your overlords.

    No one else can help you.
    We don’t give a shit about you (except in a philosophical sense).

    Columbia is recovering from a civil war and just wants to move forward.
    Guyana is too weak to invade.
    Brasil is mired in political confusion and corruption.
    The USA is too busy in the Middle East, Africa, Europe.
    The Russians cannot project power more than 20 meters beyond their border.
    The Chinese are too busy trying to rule the South China Sea.

  13. On the human capital question Im a big believer in Parettos precept that 20% of the people can account for the production of a maximum of a countrys welfare while the remaining 80% just tags along , its like in world war II if you massed artillery or armoured cars in special units you got much more fighting power than if you spread that artillery and armoured cars thin amidst endless masses of infantry , thats what france learned too late when they got clobbered at the begining of the war..same thing with the strugle for development , you concentrate your resources where you can get the biggest bang for the buck and dont try to go for doing every thing at once……., you accept that a big part of the population wont be there at the economic front , and slowly allow for the part of the economy that does work to acts as a locomotive to carry the more backward sectors forward ….the important thing is not to get sold on the idea that the whole people have to contribute to improve the economy , that wont happen , just try and see whether they dont make too much dead weight to carry ……..
    20 years ago the Oil Industry produced 3.7 million bls a day using the work of 35.000 employees , that volume got lowered by 400,000 bls per day to comply with Opec guidelines , but the capacity to produce the former volume was there , at the time there were Pdvsa executives that complained that there was too much fat in Pdvsa and that it would work better is it was reduced to a more lean and mean organization by shedding some 30% of its workforce ……., Now we barely produce 1.4 million bls per day (and dropping) using the work of over 120.000 employees and the company is broke, flat broke and in danger of losing a great many of its most strategic and valuable assets . So its not numbers that make the day but the quality of the effort that is put forward …….even the regimes boasting that they will increase production by a million bl this next year is misguided because what matters is not the volume of bls you produce but maximaxing the profit you can get from perhaps producing a much lower volume of crude and products .
    You start work with a small capital , use it intelligently and where it can yield the most and then leave for later the process of incorporation of the rest to an optimized economic machinery…!!

    • In my opinion if there is any form of intervention, then PDVSA will be obsolete in so far as oil production is concerned, it may go all together, similar to Iraq with the Southern Oil Company(SOC)
      I think the 5 major western oil companies will come in, to all ready determined concessions, and they will be the producers. PDVSA can not be trusted either with investment money or overall operational management.
      I also believe many previous oil concession deals will be negated under international law.

      • Privatize everything back to pre-CAP times. That will kill corruption in the private sector. Then eliminate ALL subsidies and let the dollar float, sell gasoline at 3 USD/gallon. Problem solved with casualties in the range of 100 to 500 k people.

        • Corruption is not exclusive to the Public sector as you seem to imply.
          Corruption happens everywhere, it is rather a symptom of mismanagement and of course cultural.
          The Private sector Bankruptcy graveyard is filled with companies that simply failed to keep its money away from thieves among many other reaons.

          • Private business in Venezuela including some US multinational are corrupt or even more corrupt than the public sector.

            I had to close our office in Venezuela in 2004 because it was simply impossible to conduct business within a modest compliance and governance workframe.

            Some of our major clients were quitting at a slower pace, until they figure out many of their employees were cheating the home offices.

            I can tell you real cases but I’ll violate confidentiality agreements I signed. I’m retired but I’m bound to those agreements until… I die. But I’ll leave some notes around and let my children decide if they want to whistle blow them. However, who will care tomorrow or in three or five years? I have told them to ignore Venezuela, a country who left my children without nationality, “apatride, stateless” to punish us.

  14. Cudos to Frank for considering foreign intervention.

    Any other CC authors having second thoughts? I know, it is only months after the knee-jerk guffaws following President Trump’s statements, but some people have the ability to admit when they were, shall we say, a bit hasty with their condescension and ridicule.

    Perhaps we will not hear so much criticism of the President in the future.

  15. “they drift into diplomatic isolation”…. Do they? Last time I noticed a UN vote, Russia and China were blocking any resolutions to take any action, however mild, opposed by the chavistas. Morales and the Cubans still stand by their side, and Erdogan invites Maduro to his inauguration. Of course, a some of this is just thumbing noses at the U.S.A., but to me it is disheartening to see how important players on the world scene can knowingly and openly associate themselves with these crooked, destructive buffoons.

  16. “Of course, a some of this is just thumbing noses at the U.S.A., but to me it is disheartening to see how important players on the world scene can knowingly and openly associate themselves with these crooked, destructive buffoons.”

    It’s all about what’s in their own interests. U.S. is not any different when you get down to it, and I’m not talking Trump, I’m taking 200 +- years of US history.

    Canada tried to be different recently by taking a swipe at Saudi. That did not go well for them. Let’s see what happens if Trump does reach a trade deal with Mexico with Canada sulking on the sidelines.

  17. “President Maduro establishes the new minimum wage that will be of 1800 sovereign bolivars”

    https://www.aporrea.org/economia/n329939.html

    If I have the math right, that is an increase from (around) 5.000.000 to 180,000,000 of the current Bs.

    3600% (did I do the math right??).

    I’m thinking the Black Market exchange rate on the new Bs is going to go UP a lot in its debut week.

    • You clearly forgot to figure in that the Sovereign Bolívar is linked to the Petro, guaranteeing stability.

      It’s okay beginners mistake.

      Sarcasm off.

    • I am trying to wrap my head around this….so the monthly minimum wage will go from roughly one US dollar to roughly 30 US dollars??? Surely I am figuring something incorrectly here.

      • My thought, too. But then I realized that the prices of everything will respond by a multiple of 60 (more more), because that’s what happens in this shit cycle they are in.

  18. My woman claims that Maduro just raised the minimum wage to 180,000,000 bs per month (1800 soverign bs next week). I have not verified that. When I asked what’s the current min. wage she said we pay our maid according to the current minimum wage scale, 700,000 bs per week or 2,800,000 bs per month. If she’s correct on both accounts, and she’s adamant about what she pays on the minimum today, then Maduro just blew the doors off of hyperinflation and this thing will soon collapse. Who can afford to pay employees that kind of increase overnight?

    And here I sit, in the middle of this shit storm, trying to negotiate the sale of some heavy equipment. LOL. One deal fell through today because the guy was dragging his feet making payment and I cancelled it. Then, out of the blue, another deal walks through the door…..same price for the package, 1/2 in dollars in cash, the other half in Bs tied to the DolarToday rate on the day of the transfer. I accepted.

    They plan to pay on Tuesday. We’ll see if it comes to pass.

    Plan is for Stepson to receive the Bs in his account and immediately exchange them from Colombian pesos which are far more stable until we can then exchange those for dollars.

    • In related news….
      Maduro’s economic team has decided to tie the new Sovereign Bolivar to 1 additional National Asset.

      Petro = 1/2 Sovereign Bolivars. (announced)
      Toilet Paper (One Ply, 1000 sheets) = 3/4 Sovereign Bolivars
      Urinal Cakes (Sturdy – 10,000 uses) = 1 Sovereign Bolivars.

  19. and, in celebration of the new Monetary Conversion, and to keep the spirit of the nation high,
    Maduro proudly announced the Annual “Running of the Bolivars”, the first to be held this coming week.

    The nation is invited to gather on grand Ave de Bolivar.
    At 8pm promptly, various firework laden drones will light the sky.
    At which point, we can show the world, that Chavista’s can run circles around the best of them.

  20. “a billion percent higher than on Chávez’s first day in 1999. In six to nine months, the VFX rate will have another three zeros and the FX rate will be a trillion percent higher than 1999”
    “Incomes have fallen 98% in real terms since 2013”

    And one wonders Why, on God’s green earth, there aren’t millions upon millions upon millions in the streets all day every day. And don’t give me that BS about state repression and/or colectivos bcuz they can’t kill that many people and /or imprison them. Not millions!!!! It comes down to not caring or plain ignorance. Venezuelans are the posterchild of “just don’t give a fuck” about their OWN WELLBEING. The international community knows this and therefore won’t do anything and rightfully so. He, who doesn’t want to help himself doesn’t deserve help from the outside. Viva el COBARDE PUEBLO, Viva CUBAZUELA. Dumbasses!!!

  21. “Increasingly, it looks like the regime will only make way for a new government if it’s forced to do so by an external actor.”
    Jeeez Muci !! No kidding!
    I’ll notify the Nobel committee! and inform them about this PhD Genius, Harvard professor Hausmann was the inventor of this incredible idea !!
    Venezuela is a ticking bomb with the very real potential of destabilize and weaken the entire region and yes that includes the US in the long term.
    So it is in the best interest of “Civilized” nations to fix this mess, we don’t live in isolated bubbles as many folks seem to believe according to their comment on this blog.
    I give you Somalia piracy and the Cuban cancerous regime.
    This is not about charity or who deserve or not the be help, it is the most logical thing to do if the powers that be are interested in preserving overall peace, order and keep enjoying their status quo.
    The U.S. has the means to do something significant here, the course of action is clear before the shit hit the fan and becomes a bigger problem.
    Trump would be better off acting upon this issue than wasting time twitting about the Omarosa tapes or any other silly drama and inconsequential distractions. It is time for Trump to rise to the occasion and show real leadership but would he? I doubt it…

  22. Nothing will happen of that magnitude, I mean using US forces, without Congress approval. And many pseudo republicans will get the support from Democrats not to mess with their socialism experimentation. Congresswoman Elizabeth Warren wants to extend the Venezuela experience to the USA. Bernie will support her (along with Ocasio-Cortez girl). Democrats get offended when we say they are socialists. Warren wants to confiscate all private property to share the wealth of the USA. Not a fake news.

    Forget the Obamas of the egocentric world to do anything to support change of direction in Venezuela. Remember Socialists want to transform society (they did in Venezuela) not to improve society.

  23. The local news (From Paracaima) – right at the border between Roraima Brazil and our shithole: It looks people in Brazil are happy to humiliate Venezuelans, who deserve their shit.

    GLOBO is a great source of local news (don’t mistake with under achieving Globovisión)

    http://g1.globo.com/rr/roraima/videos/v/moradores-usam-trator-para-derrubar-palco-onde-imigrantes-dormiam-em-pacaraima-rr/6954977/

    Immigrants from Venezuela are being asked suscintly to back home. Brazilian in that region can be truly defensive of their territory. Nationalism will play a significant role. This might well end in a tragedy.

    Don’t believe me.

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