Uncertainty

Your daily briefing for Sunday, August 19, 2018. Translated by Javier Liendo.

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Photo: WSJ

Nicolás’ credibility and the trust in the measures announced this Friday could be measured this Saturday in the number of closed stores and people trying to get supplies. The electronic payments system bounced between inoperative and slow platforms, so many had to invest a lot of their time turning their money into goods: anything’s worth more than a bolivar. The passionate discussions on social media were split between the inapplicability of the measures and their political rather than economic nature, but outside, the uncertainty for what’s coming turned full 3D. Even naively, many understand that few companies will be able to pay a minimum wage of Bs.F 180 million, so the most common discussion in the lines I made was “how many people will be fired on Tuesday?”

National unity and general strike

Opposition leaders called for a national strike on Tuesday, August 21, as the first act of protest against the measures announced by Nicolás “against hyperinflation and hunger,” promising to give more tails about the activity this Sunday. Primero Justicia and Voluntad Popular backed the proposal and made their call to a general strike. Voluntad Popular’s statement reads: “Venezuelans must now come together, discarding any past or present difference, so we can join forces and rebel against the country’s main enemy and traitor: Nicolás Maduro,” calling for building the strength to start an active general strike to recover Venezuela.

Terrible captions

Photo: Prensa Presidencial

Communications Minister Jorge Rodríguez tried to explain the keys of Nicolás’ economic recovery plan, restating that: it comes into force on August 20; there will be a single fluctuating exchange rate based on DICOM auctions; the new minimum wage is equal to half a petro (Bs.S 1,800); the VAT increased to 16%, while the Tax of Large Financial Transactions (IGTF) will range between 0% and 2%; and the entire plan will be carried out without issuing inorganic money to avoid increasing the fiscal deficit. Sadly, he was also unable to explain where the government’s going to get the organic money to cover this monstrous adjustment. He also said they’ll open 300 exchange houses in hotels and airports to enable foreign currency transactions, omitting the date when they’ll start working. For some reason, he claimed that “the criminal dollar disappears completely” and there will be no way for cash to be smuggled to Cúcuta: “we gave them a funeral blow.” Rodríguez had the gall to claim that the new economic model “seeks to increase purchasing power” and that social protection mechanisms will remain in place to avoid “imperial attacks” that seek to depreciate and destroy the bolivar.

More amaze from chavismo


The Supreme Tribunal of Justice’s Criminal Cassation Chamber approved a request for Spain to extradite former Oil Minister and PDVSA chairman Rafael Ramírez, accused of embezzlement, evading bidding processes and criminal association. They’ll also request that Colombia extradites exiled prosecutor general Luisa Ortega Díaz, and one of the prosecutors under her administration, Zair Mundaray. Ortega Díaz is accused for her alleged involvement in the crimes of treason; usurpation of authority; use of forged public document; use of forged seal; concealment and retention; false complaint or accusation and criminal association. Mundaray is accused of treason and usurpation of public functions.

Additionally, the Criminal Cassation Chamber approved another request for Spain to extradite two former chavista officials accused of corruption: Luis Mariano Rodríguez Cabello (alleged frontman for Diego Salazar) and José Ramón Sanchez Rodríguez, who allegedly helped launder State money through Banca Privada d’Andorra. Besides the corruption that destroyed the company he chairs, Manuel Quevedo wrote: “The Venezuelan people will get the necessary fuel through a direct subsidy, to defend our resources and prevent smuggling. PDVSA has the necessary inventory to attend the national demand. Avoid unnecessary lines for unfounded rumors,” inspiring great trust among citizens. Meanwhile, lawmaker Juan Requesens has been a prisoner in SEBIN El Helicoide for 11 days, and his family has been unable to see him.

We, migrants


A camp of Venezuelan migrants in the Brazilian city of Pacaraima was attacked by neighbors. Apparently, the attack came after some Venezuelan citizens assaulted an area neighbor, which turned into a violent protest that destroyed immigrant camps. The authorities of Brazilian border states have spoken many times about the impossibility of attending a mass exodus like ours and of maintaining the few social services in the area, which sparked the attempts to close the border through court orders, which have been dismantled by federal authorities. The Venezuelan Foreign Ministry already expressed concern for the incident, but not for the reasons that force so many to flee. And just this Friday, the Foreign Ministers of Brazil and Ecuador expressed their own governments’ concerns for the crises of Venezuela and Nicaragua.

All of this takes place after Ecuador started demanding that Venezuelans show their passports when attempting to enter their territory and after the announcement of the Peruvian Interior Minister and his Migrations Superintendent demanding the same, starting on Saturday, August 25. There are already complaints about discriminatory treatment in both borders. That’s why OAS secretary general Luis Almagro said that it was necessary to keep the doors open for Venezuelans, because they’re victims “of the worst humanitarian crisis the continent has ever seen, which has created the largest exodus in the Americas,” adding his concern because this crisis will intensify. Meanwhile, Colombian President Iván Duque and U.S. Defense Secretary James Mattis agreed on sending an American hospital ship in a humanitarian mission to help Colombian authorities mitigate the crisis caused by the Venezuelan exodus: “This is an absolutely humanitarian mission. We won’t sent soldiers, we will send doctors,” said Mattis.

Kofi Annan, the famous diplomat and first black African to become a UN secretary general, died yesterday at 80 years old. His performance was awarded with the Nobel Peace Prize in 2001. In this circumstance, let’s remember one of his famous phrases:

“Human Rights are your rights. Take them. Defend them. Promote them. Understand them and insist on them. Nurture and enrich them, they are the best of us: give them life!”

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63 COMMENTS

  1. “He also said they’ll open 300 exchange houses in hotels and airports to enable foreign currency transactions, omitting the date when they’ll start working. For some reason, he claimed that ‘the criminal dollar disappears completely’….”.

    Is not the “criminal dollar” a “foreign currency”? And if the dollar remains “criminal” then what are you supposed to exchange for at these exchange houses? Bolivars for Mexican pesos? Petros for Euros? And who are the bidders in the DICOM “auctions” that will supposedly set the exchange rates? And isn’t the Petro exchange rate already set against the “criminal” dollar by the price of oil?

    Is there ANYBODY demanding answers to these kinds of questions?

    • Criminal Dollars are Dollars that the people don’t give to the regime. The “Criminal Dollar” is pardoned once the regime has possession of it.
      The Dicom will be rigged to benefit the regime’s inner circle.
      The Petro is a fantasy dreamed up by the lunatics that hold Venezuela hostage.
      This entire circus will do nothing but guarantee increasing hyperinflation and destroying the few businesses that have somehow remained in operation.

      • Unfortunately the answers don’t matter because the questions exist only to maintain the secrecy of the actual mechanism. The existing system stopped working when the government ran out of dollars to give to the enchufados at VEF 10 each, so they are creating a new mechanism to scour every last bit of prosperity from el pueblo and continue depopulation. The marxists have not changed their motives: steal, enslave, depopulate.

        Before, we had a four-way(?) swap system with DICOM, DIPRO, excess VEF, & USD which could easily hide the effects of most transactions. Now we’ll have excess VES, ghost PTR, artifical oil (in ground), free market oil, remittance USD, & free market USD (what did I miss?). The exchange rate between any two (except for free oil & free USD) is unknown and manipulated by the enchufados. So they will continuously switch around exchange rates to create volume and siphon off fat vigorishes on any functioning axis. Today CLAPs must be paid in VES, tomorrow in PTR, next week in dollars, repeat cycle. Same old financial rape.

        Naturally, as there is less to steal the thieves become more agile and innovative. Everything is normal. Keeping el pueblo off balance is just a happy side effect. Note that Carlos Hernández’s hassle in getting across town via taxi, waiting in line for the chance to buy something, and all the other anti-productive waste can only increase (“Down goes GDP!” to paraphrase Howard Cosell.)

        Entering the next phase: enchufados robbing enchufados.

    • What’s the point of asking? In the unlikely event that the regime volunteers any answers, there responses will be meaningless, misleading or worse.

  2. Is it true that Maduro is now saying he made a mistake and that the new raise is to be 18,000,000 bs and not 180,000,000 bs? Gawd I hope so. What an asswipe. LOL

  3. I am reminded of the Everett Dirksen quote: A billion here, a billion there, and pretty soon you’re talking about real money. Even in Bs “fuertes/strong” -or was that “soberano/sovereign?”

    I doubt that Senator Dirksen could have imagined that a million couldn’t even buy you a cup of coffee. Though Germany did have such inflation in the 1920s.

    • Apparently the state story line is now that meant 180 Bs S, not 1800 Bs S…….but honestly, I’ve still not confirmed the story. Chavez TV is all bullshit right now, no news. Of course, having said that, even when reporting news, it’s still all bullshit. LOL

      • Jesus thats not a little mistake. Do you have any idea how many people lost their job this weekend? Didn’t you yourself say that you layed the maid off? I already pay my boys over 100 million an month so i was just going to buckle up and double their wage again anyway but i know lots of guys who were going to close their doors. Even 180 million is NOT nearly enought to be able to even survive so this is all so very distorted anyway. What a freaking clusterfuck he could spit out any number and everyone scrambles to make sence of it.

        • Yup, my woman (who hired the maid), fired the maid Friday night. Now, to be honest, it wasn’t just because of the latest insanity out of Miraflores. The quality of her work had been declining steadily, and while she’s been on vacation for 10 days or so, during that time I’ve pitched in to help clean up the house.

          The bodega doesn’t need nearly the attention, nor hours open, it did before because there’s no cash in the streets nor products to sell. My woman has seen that we can do without the maid, alternately, we can just hire someone once or twice a week for a few hours and get the heavy stuff done without paying prestaciones socials, utilidades, yada yada yada.

          Having said all that, Maduro Madness had its effect on the final decision.

          • MRubio: don’t say “my woman,” please use, my spouse or my wife. It shocks me. and should shock your wife too. You aren’t a despicable macho-man – you are a man.

          • Pepe, zero disrespect meant. I respect the hell out of her. In fact, I wish I was half the man she is. LOL

            Having said that, it’s habit as much as anything because, at least here in the sticks, it’s not disprectful at all to say “my woman”. They say it all the time, much more so than, “my woman, or my spouse”.

            You’ll have to suck it up buttercup and get used to it because I ain’t changing. 🙂

          • Really Pepe (or Jose or whoever you are), you shouldn’t insist on everyone conforming to your taste and culture! No place for bigots in this world!

            This is the age of diversity, sensitivity, multiculturalism and all that. So get with the program!

          • Pepe, if you have read MRubio posts for any length of time, you would know that this woman, who he calls “my woman” is not for one second to be crossed, demeaned or taken advantage of. MRubio continually writes of her determination, her strength, and abilities.

            I know words have meaning, and you find his use odd (and demeaning), but I personally read them as incredibly loving.

          • Well-put Dale. Without her, I’d have buckled under the pressure of living here long ago. As long as she stands fast, I’m not going anywhere.

          • We have a similar situation. Mrs Guapo has been calling me (third person) “My Man” since we were dating, and since we have been married for 30 years. She also is the one who started calling me El Guapo when we started dating… not that I am attractive in the least… I’m quite plain and could stand to lose a few pounds. Anyway, our pet names for each other are always with affection and while some have rolled their eyes at us, we don’t care. Most wish they had what we have.

          • Pepe, don’t be ridiculous. My “woman” is as perfectly acceptable as a woman saying my “man.”

            My God:

            This is the last fucking place to worry about being ultra-left PC.

          • MR
            Vicky’s mother is quite elderly and has had a maid for years that has become a companion also. Some of the money I send goes to pay the maid’s salary.
            I joke that if I could support anyone to come to the US, I would choose the maid. As long as I’m paying her, I may as well have her clean my house.

          • I have to (reluctantly) side with the MRubio here. In Venezuela, “mi mujer” is common usage (as is in Germany, by the way: “meine Frau”). From what MRubio writes here, it looks like she’s quite a gal and that they have a great partnership. It does sound funny in English, though, but as a self-appointed official of the PC police, I give MRubio a pass.

      • So you’re saying that the first person tripped up by Maduro’s idiotic decision to remove five zeroes instead of six was Maduro himself?

          • Ira, I take it, I learned and I apologize (again). English is not my strong language and I followed my old teachings.

            I’m the opposite of communist, more like the nemesis of any communist here, there or anywhere

            YouTube reference to the incident in the Brazil 🇧🇷 border: use this to look it up/search within YouTube <>

            Example https://youtu.be/2AijIAod81U

            It’s shameful.

            __________________________
            PS: Woman vs Wife words:
            In Genesis 2:18 the creation of Eve is narrated. She is referred to as “woman” until Genesis 3:17 where she is then called by GOD as “Wife of Adam.

            Can we assume that Adam and Eve got married even though this not narrated nor explained? Assuming they got married, who has made this possible? She was his wife all along. It’s just that the word “wife” is used only when the woman is being referred to in relation to the man.

            In Hebrew the difference between “woman” and “wife” is just a matter of whether there is a possessive suffix.

            In English we don’t say, “her man” or “his woman” (except with certain connotations). Instead we change the words to “husband” and “wife” when we add a possessive modifier.

            In Hebrew (at least in the Genesis 2-3),ʾiššâ is usually translated “woman”, but ʾištô (literally “his woman”) is usually translated “his wife”. In Genesis 2:25, shortly after God brought the woman to Adam, she is referred to as his woman, i.e. (as in the vast majority of translations), his wife.

            Genesis 2:22:

            וַיִּבֶן֩ יְהוָ֨ה אֱלֹהִ֧ים ׀ אֶֽת־הַצֵּלָ֛ע אֲשֶׁר־לָקַ֥ח מִן־הָֽאָדָ֖ם לְאִשָּׁ֑ה וַיְבִאֶ֖הָ אֶל־הָֽאָדָֽם׃ (BHS)
            wayyiben ʾădōnāy ʾĕlōhîm ʾet–haṣṣēlāʿ ʾăšer–lāqaḥ min–hāʾādām ləʾiššâ waybiʾehā ʾel–hāʾādām
            And the rib that the LORD God had taken from the man he made into a woman and brought her to the man.

            Genesis 2:25:

            וַיִּֽהְי֤וּ שְׁנֵיהֶם֙ עֲרוּמִּ֔ים הָֽאָדָ֖ם וְאִשְׁתּ֑וֹ וְלֹ֖א יִתְבֹּשָֽׁשׁוּ׃
            wayyihyû šənêhem ʿărûmmîm hāʾādām wəʾištô wəlōʾ yitbōšāšû
            And the man and his wife were both naked and were not ashamed. s

  4. Dear young one,
    Thank you for all your analysis. I lived in Valencia Ve for quite a few years. My wife still lives there, so its better I don’t reveal her or my identity. I am and always will be in love with Venezuala. You have always been correct in your description of events, thank you.
    You are correct, but Venezuela is already Dolasorides.
    Everything is at dollar prices.
    With much love, Gerry.

    • I think this comment was aimed at you Naky. And again I second the motion.

      Something that never fails to amaze me is the majestic effect that Venezuela has on all who visit her. I too fell in love with Venezuela when I was 17 years old and somehow suspect that even if we leave, I too will always be in love with her.

      Hey! On a positive note: good thing the politics suck here otherwise we would be severly overpopulated!!!

      • Marc, I don’t know what age you have. When I left Venezuela, it had the most beautiful women on earth. Then they started growing teets and bum-bums. Precisely after Chavez made it to power. Obviously, they had their priorities upside down. Just like today.

  5. Dear Gerry – me too! But I don’t have lose ends in that holeshit so I can say whatever I want. You’re a bit older than I but maybe we know each other. In Venezuela every man has a price printed on his head. However yesterday I saw some honest people. The rare innocence of those who believe.

  6. Right now on Chavez TV they’re running propaganda that repeats the 1800 Bs S per month minimum wage that Maduro quoted Friday night. I doubt they’d have done that if he was prepared to announce he’d screwed up.

    Marc, dig deeper there buddy.

  7. did you see the news in BBC in Spanish? what a garbage but there are two interesting posts, one about Pacaraima, right after the Venezuela border. and the other about El Callao, where they depict mountains of boxes and plastic bags full of VEF – I guess they better deposit those billions of papers before,.. too late.

  8. Venezuela’s Great Bolivar Scam, Nothing but a Face Lift

    https://www.forbes.com/sites/stevehanke/2018/08/18/venezuelas-great-bolivar-scam-nothing-but-a-face-lift/#5686047d4c23

    Cut to the good part (last paragraph)

    “Unless Venezuela adopts a completely new currency regime—like a currency board, or dollarization—the bolivar will face the same fate as did the Yugoslav dinar. Hyperinflation will soar and the bolivar will more frequently come under the knife.”

    Dollarization doesn’t specifically mean the US dollar. Any stable currency that trades openly would suffice. But you can kiss your beloved Venezuelan Bolivar goodbye, if you want to recover from this mess.

    • I know I once asked whether a country needs “permission” to adopt the Dollar, and I was told basically, no. It’s a simple process.

      Could the same be said for the EURO!? Those guys are pretty nuts with their regulations, you know?

      Also, what is the logic in choosing a new currency? Do you look at historically strong, pull out the crystal ball or roll the dice and place a bet on what’s going to be the strongest, or do something creative… maybe link to something not as historically stable, but more “regional” or politically correct, to make the medicine go down more easily?

      • I would think that the logic to adopting a currency would be stability.
        When a country gives up its own currency, it gives up sovereignty. In essence it is trading freedom for security.
        Greece is a good example. If Greece had retained the Drachma they would be able to devalue the currency. This would make imports more expensive and make exports and tourism less expensive. A devalued currency can bring much needed foreign reserves into a country and stimulate an economy. That is probably the biggest challenge to the Greek government. No monetary policy.
        China’s manipulation of its currency has been done for the same reason.
        Venezuela hasn’t really devalued the currency. The regime has changed the currency. The currency is being devalued because of the regimes continued economic malfeasance.

        • Can’t a country just as easily go back to its own currency?

          Believe me, I’m not being facetious:

          I really am that stupid when it comes to economics.

          • The EU creation of the Euro Zone is by treaty. The UK retained the Pound and did not enter the Euro Zone. I don’t know what the repercussions would be for Greece to resurrect the Drachma.
            The European Central Bank sets the monetary policy for the Euro Zone. It has become apparent that finding a balance for the much different economies doesn’t work.
            Germany as an exporter has benefited the most and is the strongest economy in the EU. France, Italy, Spain, Portugal and Greece have all amassed large national debts.
            I could never understand how the Euro could be successful long term. I still don’t think that it can. The UK pays billions of Pounds into the EU every year. When the UK exits the EU, the EU will be under much greater stress.
            The economies of the individual countries are too different to be covered by a single monetary policy.

        • Right you are. You don’t need another country’s permission to utilize their currency… you only need fiscal restraint and acumen.

          Zimbabwe tried to dollarize initially, but they kept printing currency in the face of their “new dollarization policy” and it was a failure. Only after fiscal restraint were they able to pull it off.

          I am not a huge fan of dollar this or Euro that. Its just policy that borders oftentimes on jingoism. While it is a sign that your country understands economics, in the end its all puffery. I don’t give a shit if I have to do commerce in Yen, Yuan or Rubles. I care that it has value.

          The big picture is, “is Venezuela ready to take a one time slap in the face in order to regain financial health?” When the economy is augering isn’t the time to wrap up in the Venezuelan flag.

          • Ira,
            They can do whatever they want. But if they do not produce their own food, medicine, cars, spare parts, machinery, construction materials, gasoline, etc., then they have to buy it from abroad or go without. That is what is happening. They are buying much less from abroad and going without since they killed off most of their own production by acts of monumental stupidity and arrogance.

            And nobody abroad is going to accept their shitty currency, since there is nothing of value that can be purchased with it.

            I remember visiting the USSR in 1984 (same summer as the LA Olympics). They required all tourists to exchange some USD for rubles, but there was nothing you could buy (that you would want) with the rubles, beyond silly trinkets, mystery meat sandwiches and the shittiest beer ever that you could find on the street. If you wanted something “nice” as a souvenir, like the little lacquer music boxes or nested dolls that tourists bought for some reason, you had to buy them in special shops that were off limits to non-tourists and that only accepted hard currency (USD or West German marks as I recall. Maybe others). Locals would hang around outside trying to get you to buy whiskey for them in the shops.

            The bolivar might as well be the ruble at this point.

          • “The big picture is, ‘is Venezuela ready to take a one time slap in the face in order to regain financial health?'”

            Ego is expensive; collective ego especially so.

          • Ira

            The way it was explained to me, is that as long as Nation A decides to “dollarize” and does so with sound financial stewardship, they can do it without actual dollars. The problem only arises IF Nation A decides to start printing more money OR decides to not embrace fiscal sanity. (so far, Venezuela is 0 for 2)

            To make a long story short, a single bolivar can be pegged to a single dollar… so long as anyone who brings in a bolivar can exchange it for a dollar, and back again. This is why dollarization won’t work in Venezuela in the near term, because even the opposition (IMHO) is incapable of showing financial restraint.

            https://www.investopedia.com/articles/04/082504.asp

            As I mentioned previously, I don’t think that the oppo has the balls or common sense to go to dollarization. Worse, there is some vestiges of pride in having your own currency… regardless of how useless it is. “Saving face” is of paramount importance in a lot of cultures of developing countries.

  9. We fortunately have working models in LatAm (I need to prep a table). Why reinventing the wheel. Pick and choose: Ecuador, El Salvador, and Panama. It’s too late I think to pick Panama. Then it’s like Ecuador or El Salvador. These two were orderly done and very successful. Even Correa couldn’t do anything to change Ecuador system. For the last two, do you remember the currency of El Salvador? No one cares.

    So why Venezuelans are so stubborn to stick to the Bolivar name, for the sake of El Libertador? His words were always right but his actions not necessarily good. So people, in general, consider Bolivar’s anything like godly, holy, pius, etc.

    He was a very smart fellow for his age and time. But let’s ignore the holy aspects and stick to his writing; read the history of the first republic and compare to the fifth/Chavez – same causes same consequences, in 1811 – two hundred years ago ”why did freedom fail in Venezuela? We had bosses who were philosophers, philanthropic legislation (ME: free everything for everyone), dialectics instead of tactics (ME: The current leadership whether government or opposition) and sophists by soldiers (ME: our current soldiers will lose any battle against any orderly army). Especially the paper currency finished off the dissatisfaction of the stolid inhabitants. They wanted the commander of the troops of the empire (ME: The king of Spain, now he is Trump) to come and free them from a coin that they saw with more horror than the servitude. In addition, the partisan spirit decided everything and consequently disorganized us more than circumstances did (ME: Capriles, Lopez, the infamous Tintori, etc); our division, and not the bourgeoisies, brought us back to slavery”

    His predictions were always on the money.

  10. PdVSA gives up? And did this outlay come from China?

    PDVSA relinquishes: Signing agreement of payment with ConocoPhillips of the arbitration award for US $ 2 billion
    August 20 2018, 8:41 a.m.

    ConocoPhillips announced today that it has reached an agreement with Petróleos de Venezuela, SA (PDVSA), the Venezuelan state oil company, to recover approximately US $ 2 billion, the total amount granted to ConocoPhillips by an arbitral tribunal constituted under the rules of the International Chamber of Commerce (CCI), plus interest through the payment period.

    PDVSA agreed to recognize the CCI ruling and make initial payments totaling approximately $500 million in a period of 90 days from the date of signature. The balance of the agreement will be paid quarterly over a period of 4.5 years, according to MarketWatch.

    As a result of the agreement, ConocoPhillips agreed to suspend its legal actions to comply with the JRC ruling, including in the Dutch Caribbean. ConocoPhillips has ensured that the agreement complies with all regulatory requirements in the US, including applicable sanctions imposed by the US. against Venezuela. The additional details of the agreement are confidential.

    https://www.lapatilla.com/2018/08/20/pdvsa-cede-firma-acuerdo-de-pago-con-conocophillips-del-laudo-arbitral-por-us-2-mil-millones/

    • Maybe Hugo’s daughter loaned them the cash ….

      I am surprised Conoco agreed to be paid in installments, since PDVSA are broke deadbeats, but they must believe it is a better deal for their shareholders.

      • They have a judgement against PDVSA. Perhaps they have a lien against the Curacao facility that will allow them a simple foreclosure if PDVSA defaults on their installments.
        It is also possible that the condition of the facilities and possible environmental damage has made Conoco leery of taking ownership.
        If Lake Maracaibo is any indicator, other PDVSA facilities may be environmental disasters also.

          • To get paid (in petros) they first need to get their card of the fatherland, aka, the Maduro Express card.

            $2B will get him a lot of frequent flyer miles, but they are only good on Conviasa.

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