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thepeel
Joined: 08 Aug 2004
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 Posted: Thu Jan 11, 2007 4:30 am Post subject: |
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My agenda is to point out that, like the Arab states, there is no economy other than oil and the state. When you talk of economic growth, it is America sending paper to Venezuela for oil. The Venezuelan government uses the dollars to buy off the population via various subsidies to those loyal and the GDP figures register this is "growth".
Productivity is not increasing, and actually decreasing (even the oil industry is below 2001 levels, still, as the state cannot afford the proper investment) nation-wide.
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March 3 (Bloomberg) -- Venezuela, which wants to double oil output by 2012, has boosted the number of exploratory drilling rigs by 12 percent since last year. The increase isn't enough to increase output, analysts said.
The South American country, the world's fifth-largest oil exporter, had 75 drilling rigs as of January, up from 67 a year earlier, according to data compiled by Baker Hughes Inc. That's below the 82 rigs needed to maintain output, Luis Vierma, vice president for exploration and production at state oil company Petroleos de Venezuela SA, said in an interview last year.
``They just don't have enough rigs to keep output steady, let alone increase it,'' said Juan Carlos Sosa, president of Grupo Petroleo YV, a Caracas based energy consultant. |
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ax_BpmHkrh4U
The nation is being run by fools. Example 1:
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The bank reiterated the government's goals for next year of 5 percent to 6 percent economic growth, 10 percent to 12 percent inflation and an unchanged official exchange rate of 2,150 bolivars per dollar. |
http://www.bloomberg.com/apps/news?pid=20601086&sid=aCiAyYtobHzU&refer=latin_america
Dollars pouring in, money being printed and debt issued, and the exchange rate stays set.
Inflation through the roof. No problem, nationalize industry. Do away with price. No problem there.
Evidence of decreasing productivity.
Between 75-85% (depending on who you believe) of the poorest Venezuelans spend the vast majority of their income on food. Inflation will kill (literally) them.
The nation is a total mess. |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Thu Jan 11, 2007 6:06 am Post subject: |
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| BJWD wrote: |
Meh. When the economy collapses in an Asian style financial crises (within 18months, less 100$/oil), I'll just bump this post. |
I haven't touted Chavez on his economic policies. You must be confusing me with someone else. I do believe in helping the poor, but I also believe in competition. What is he doing in terms of finding more resources, working on the agricultural sector? I know he has big goals, but I am skeptical he can achieve them. Oil is not 100 dollars a barrel.
I can't comment on Hugo Chavez.
As far as the 17% inflation it is not as bad as the old inflation rates we used to hear about in Brazil, Nicaragua and other states. Of course, it would definitely discourage investment in the country, weaken some confidence in the Venezuelan Bolivar, and erode the earnings of the populace. Should it hit 30% then he is definitely headed for trouble.
If inflation was at 10% then it wouldn't be so bad. He has to contend with needing funds to invest in the oil sector, agricultural sector he is taking over, paying all the companies whose companies he is taking to nationalize. This Latin Napoleon is putting a lot on his plate and taking huge risks.
Last edited by Adventurer on Thu Jan 11, 2007 6:49 am; edited 1 time in total |
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ddeubel
Joined: 20 Jul 2005
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| Posted: Thu Jan 11, 2007 6:15 am Post subject: |
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I won't put my money on Chavez bringing paradise to earth.What I am saying is that there are commentators saying positive things, including your Bloombergs. But I do agree, the court is out on this one.
I enjoyed hunting down the source of your graphs and reading the responses to that blog! Real insight into the Venezuelan mind and expat mindset.....invaluable to understanding even if I can't right yet communicate how they feel. I'd suggest others look there if curious...
DD |
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ariellowen
Joined: 19 Apr 2006
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| Posted: Thu Jan 11, 2007 7:38 am Post subject: |
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Of course, nothing about this is good or bad, it's just nature unfolding itself.
That being said, it does seem a little funny that the big Communist states have folded, the hangers on are hurting, and Venezuela is starting up a new socialist state. Perhaps with the lessons learned Chavez can do a "better" job. Or perhaps his rule is a sort or brief social readjustment. But if there can be religious wars in what was supposed to be an age of atheism, why can't there be post-Soviet socialist states? Far less has changed in the world than might have seemed? |
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thepeel
Joined: 08 Aug 2004
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| Posted: Thu Jan 11, 2007 8:02 am Post subject: |
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| Adventurer wrote: |
As far as the 17% inflation it is not as bad as the old inflation rates we used to hear about in Brazil, Nicaragua and other states. Of course, it would definitely discourage investment in the country, weaken some confidence in the Venezuelan Bolivar, and erode the earnings of the populace. Should it hit 30% then he is definitely headed for trouble.
If inflation was at 10% then it wouldn't be so bad. He has to contend with needing funds to invest in the oil sector, agricultural sector he is taking over, paying all the companies whose companies he is taking to nationalize. This Latin Napoleon is putting a lot on his plate and taking huge risks. |
I did mistake you for someone else. oops!
You are right, the inflation is not as bad as it has been in other nations in the past. Economists speak of the 1980's-2000 time as the "lost decades" due to this inflation and the twin idiocies of "dependency theory" and then nationalistic socialism. This was promptly followed by a lovely gangster capitalism that didn't do much good either.
Here is the quote of the century. If it does not knock your socks off, well, nothing will.
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The price level in Brazil is approximately 5 trillion times higher today than it was in 1972. |
Not a typo. Trillion.
Source:
http://www.federalreserve.gov/BoardDocs/Speeches/2006/20061116/default.htm#f1
Commentary here:
http://www.marginalrevolution.com/marginalrevolution/2006/12/brazil_fact_of_.html |
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ddeubel
Joined: 20 Jul 2005
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| Posted: Thu Jan 11, 2007 2:37 pm Post subject: |
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Here is the link, I omitted above. In reference to BJWD's graphs. You might ignore the blog itself but it is very interesting reading if you click on the comments to each post. A great read. Thanks again.
http://blogs.salon.com/0001330/categories/venezuela/ |
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cbclark4
Joined: 20 Aug 2006
Location: Masan
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| Posted: Thu Jan 11, 2007 6:47 pm Post subject: |
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This has got to be the most polite discussion in whole current events forum.
I too agree with much of what is said, I hope that Hugo does create/achieve social justice in Venezuela.
I think he is wrong for nationalizing the oil, but where oil is concerned a little nationalizing ain't gonna hurt too much.
Yes, 17% inflation is not as bad as that found in other South American countries.
I have always felt that strict socialism was path for developing nations to help organize and educate the masses and that the ultimate aim should be to become a fully developed actor in the global market. In the end there are always elements of socialism in every healthy developed country in the world.
cbc |
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thepeel
Joined: 08 Aug 2004
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| Posted: Thu Jan 11, 2007 6:52 pm Post subject: |
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If you are poor, 17% inflation would be horrific.
What is "social justice"? |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Fri Jan 12, 2007 2:31 am Post subject: |
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| BJWD wrote: |
If you are poor, 17% inflation would be horrific.
What is "social justice"? |
On the other hand, as economists like to say, if under the previous presidents of Venezuela far fewer impoverished Venezuelans benefited, then it is a question of 17% taken out of something versus being taken out of nothing. The poor of Venezuela don't really have anything, so they are eager to follow Chavez. Nationalization, alone, would not spell ruin for Venezuela. I am sure there must be other countries that have nationalized telephone service. However, if he clamps down on competition, puts lots of price ceilings and the like, then there could be trouble. I am not praising the experiment, but he is the first person in his country, it appears, who even paid lip service to the poor.
On the first night of class, Rosa arrived and whisked Maria and Mauricio off to school. Maria said that she felt like Cinderella. Free history, math, language arts and English books were distributed. Maria told me that she fingered the pages as if they were gold; finally, after 40 years, she was getting the one thing she most desired, an education. Maria and Rosa are good friends now, and Rosa guides her through the maze of federal social programs that have been instituted under Ch�vez's leadership.
http://www.venezuelanalysis.com/articles.php?artno=1920 |
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cbclark4
Joined: 20 Aug 2006
Location: Masan
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| Posted: Fri Jan 19, 2007 6:08 am Post subject: Into the Abyss |
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Chavez set to rule by decree (al Jazeera)
Members of Venezuela's National Assembly have given initial approval to a measure that would allow Hugo Chavez, the country's president, to enact laws by decree.
The proposed law, which is valid for 18 months, is described by Chavez' allies as a key step in their self-styled socialist revolution.
But the president's opponents have described it as a "totalitarian" abuse of power.
It was approved unanimously in its first reading on Thursday and is expected to win final approval next week in a second session of the legislature which is dominated by Chavez supporters.
"We welcome this enabling law, with the support of the National Assembly, which backs our leader," Cilia Flores, the legislative president, said after a unanimous how of hands in favour during the four-hour session.
http://english.aljazeera.net/NR/exeres/D1468AA6-D6D1-42F1-A5FD-0D8B1C3B8BFE.htm
cbc |
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