In Praise of Hugo Chavez and Venezuela (Not By Me): Venezuela Cash Crunch

Mish

Hugo Chavez is gone, but his policies live on. Nicolas Maduro is president now. Hyperinflation which started under Chavez is even worse under Maduro. This is what happens when socialists run countries in the ground. It always starts with promises of free handouts to end poverty.

Numerous sources claim Venezuela will default as soon as tomorrow. The timeline now does not matter much. Perhaps it takes another month. At this point what does it matter? Venezuela is in ruins.

Cash Crunch

Bloomberg notes Venezuela's Cash Crunch Means Waiting Five Months to Get Paid.

Petroleos de Venezuela SA, the state-owned oil company that controls the world’s largest crude reserves, has been hit hard by low prices and U.S. sanctions that are increasing the risk of default on the country’s debt. Output plunged, and refineries were forced to shut because of recurring breakdowns or a lack of domestic crude to process. On Friday, a principal payment is due on some of PDVSA’s notes.

While the financial and political crisis has already wrecked the economy, a default by PDVSA could make things even worse if the experience of another oil exporter in South America is any guide. In an August 2016 report, the chief economist at Torino Capital LLC said Venezuela risked following the same pattern as Ecuador, which was forced to offer bigger discounts on its oil exports to lure buyers in 2008 after it was unable to pay debts.

Finances are so tight that a PDVSA refinery on Curacao can’t afford to buy enough oil to process. The tanker Tulip, loaded with U.S. crude, has been drifting offshore since May awaiting payment. At the end of last year, PDVSA owed $42 billion.

More than $2 billion of the company’s debt is coming due in the next few days, and investors are showing less confidence that funds will be transferred.

In Praise of Venezuela

Who is it that is in praise of Venezuela? Here is your answer:

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For US readers who may not recognize the name, Jeremy Corbyn is the Labour Party leader in the UK and head opponent of Prime Minister Theresa May.

Here is the complete Tweet in context.

Beware of Socialists and their promises. Here is an unfortunate one to watch: "Jacindamania": Labor Takes Over New Zealand, New Gov't Blasts Capitalism, Promises to End Poverty .

Mike "Mish" Shedlock

Comments (10)
No. 1-10
MorrisWR
MorrisWR

Those who praise Socialism have never studied history, especially the National Socialists, the Union of Soviet Socialist Republic and Lenin’s writings. I debate people often about the history of Socialism but they often stare at me and have no response but that we need to help the poor, as if that has any meaning in the context of the argument.

2banana
2banana

Sanders praising Hugo style food lines>

Vermont’s Democratic presidential candidate Bernie Sanders has sought to separate his views from those of tyrannical socialist regimes throughout history. The problem is that back in the 1980’s Sanders was outspoken in his support of communist dictator Fidel Castro as well as the Soviet-aligned Sandinista government in Nicaragua.

In fact, recently discovered video shows Sanders praising food lines as a good thing. Sanders asserts that countries where people don’t line up for food that the poor are starving to death because “the rich get all the food.”

http://www.progressivestoday.com/footage-surfaces-bernie-sanders-praising-communist-bread-lines-video/

WildBull
WildBull

I'm beginning to think they just get off on the power trip of deciding life and death of the masses. There is no end to it. Success and failure don't matter. Psychopaths.

lloyd
lloyd

“There are two places only where socialism will work; in heaven where it is not needed, and in hell where they already have it.” ~ Winston Churchill

RonJ
RonJ

Sanders asserts that countries where people don’t line up for food that the poor are starving to death because “the rich get all the food.” The Venezuelan government decreed that eggs had to be sold at a certain low price. I saw a news photo of people carrying cartons of eggs. Afterward, no eggs were to be found at any price, as egg producers couldn't make a profit. Meanwhile Maduro looks rather overweight and i would guess that he still has eggs available to him, while the people starve.

WildBull
WildBull

Socialism and famine go hand in hand. It a hallmark.

PragmatismAboveAll
PragmatismAboveAll

Articles like this really bug me. No one would dispute that what is happening in Venezuela is bad news, but to say that this is the result of socialism is misplaced. This is the result of populism and nepotism. MorrisWR cites two other examples of 'socislism' gone bad, that of the nazis and of the USSR, though neither of these are valid examples of socialism, despite their names; neither regime had the interests of the wider populace of which they served as their prìmary concern, rather the interests of industry, ideology and ferverent nationalism in the case of the nazis, and the interests of new elite, ideology and ferverent 'nationalism', if you could call it that, in the case of the case of the russian communists. Can anyone provide a valid example of an unsuccessful socialist regime (i.e. governing in the interests of the wider populace) that has truly failed? No, because all such regimes have fallen into totalitarianism. Is this the fault of socialism as an ideology , or rather a condemnation of human nature? Why, after do many supposed failures, do populaces still vote for socialists, despite the benefits if the free market? It is because the pure free market, and it's proponents, such as Mish, offer no provision for the welfare of the vast section of population who have neither the wit, the resources, the education or the capital to truly succeed in a purely capitalist society. I don't dispute the benefits of free markets and capitalism, but these mechanisms need to work in such a way that they don't result in a dog eat dog, beggar thy neighbour if they don't have the intelligence/resources/circumstance to 'make it on their own'. This is why the likes of Jeremy Corbyn will be the next prime minister of the UK, despite his faults. I mean, what kind of alternative are the UK conservatives? They are a joke.

RB2
RB2

PAAll typical rant. Humans are far more resourceful when unshackled not chained to your kind of ideology. Even in the chicomm or Ruskee world the black market existed. Why??? Because people wanted a better existence within the confines of communism. Your utopian nonsense is the chain that binds the underclass forever.

PragmatismAboveAll
PragmatismAboveAll

RB2, I think you misunderstand- there is no rant. I don't have a problem with the market. On the contrary, I think the market based economy has served the western world incredibly well, as evidenced by living standards, freedoms, etc. No westerner in their right mind would advocate a chinese/russian communist system. My point is that in a pure free market economy, there is no provision for the least fortunate, whether the source of their misfortune is self inflicted or circumstantial. There has to be a safety net to provide the basics for these people, or they are just left to rot. Go to an American city in the evening and you see the people I'm talking about. Mentally ill, down on their luck, lost their job, whatever. Not even just these people- those who feel left behind by society will vote for an alternative that promises them something better, e.g . socialists. This is going to become increasingly the case if wealth disparity continues to grow- see increasing support for the likes of Bernie Sanders, Jeremy Corbyn, etc. Every action has an equal and opposite reaction.

Six000mileyear
Six000mileyear

Northern Euro-"peon" counties have appeared to make socialism work, but not based on the tenets or merits of the philosophy. Instead members of society individually strive to be self-sufficient through a strong work ethic, factor into the personal consequences of making a bad lifestyle choice, and carefully weigh their votes. Northern Euro-"peons" are actually holding themselves back by paying into social insurance when none is needed.


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