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Wednesday, June 3, 2009

Financial crisis: Venezuela sets example

While Washington and London, for example, are giving away public resources to banks without any clear payback, Caracas instead is not happy with private banks not fulfilling their economic role:

The Associated Press news agency quoted Chavez as saying that banks needed to intervene in the financial system and provide credit to people buying houses or producing food, rather than generate massive earnings for their owners.

Chávez has threatened with sanctions if banks keep draining instead of helping the economy. What seems the way to go rather than massively indebting a whole nation for the benefit of a handful of corrupt greedy bankers.

From Al Jazeera.


Kepler said...

Hombre, Maju, I thought you would be a little bit more cautious with regards to Latin American issues, with all the links between (how do I say it?) Iberia and Latin America. You are a Basque, you know Latin Americans' mentality y la labia (I hope you don't mind me using Spanish :-) I speak it better than English and I suppose you are bilingual from upbringing).

The US government has dealt in a disastrous, irresponsible manner with the banks and bankers and the EU is not much better, but the Venezuelan government has done much worse. You believe such blablabla from Chavez and company? Then I believe Clinton did not have sex with that woman.

Chavez has spent the biggest oil boom we have had in many decades in part in handouts without any thought on sustainable development. That would be fine as the population was in big-big need, even it it is not optimal as we are more dependent on oil than ever before. The sad thing is the biggest part of the money was wasted, stolen, by the Boliburguesia and, yes, the eternal Ancient Regime that coalesced with the government as long as it has suited them (I won't talk here about other issues like political mobbing, etc, just economics).

The "reserves" we have are an accountant's joke. Now the government is so out of cash that it is simply using the banks' money (no, not the people getting loans, but the government). Not only that: it has now committed oil to China
for decades in order to get 8 billion dollars on loans and with that we are wasting a huge amount of oil at a very low price for DECADES.

It is also getting loans from Brazil and Japan for a total of over 10 billion (which is a lot for Venezuela) and for that it is compromising a huge chunk of the Orinoco Oil Belt, among other things.

Here you see more details on that

And there you will find a commenter who is a heavy Chavez apologist with counter-arguments.

As for the biggest bank profiteers: they belong not only to what we call the Ancient Regime, but mostly to the Boliburguesia.
One tiny example:
the brother of Jesse Chacon (ultra-minister of everything) had tax declarations of 0.00 in 2001 and before, he was in 2001 still a tiny employee for the government. Now he has bought his 3rd bank. I don't recall the precise number but he is at least a couple of hundred million dollars worth. That is a lot in a country with an economy as Venezuela's.
Miguel's blog documents a lot about the way the boliburgueses have been profiting from the currency control. The whole money is stolen from the people who need it, la gente de los barrios.

As for your previous article on Lebanon: no way Venezuelans did that. I am into IT. I know how lousy the Venezuelan government is prepared.
Even the paper trail in our electronic system does not give the right answer to Chavez's dad and to a Chavez governor. Many Venezuelan governmental sites are chock a block with problems.

For more information on bank reserves you can ask Ow from Oil Wars blog, a formerly pro-Chavez gringo, a man who is highly critical of us, the Venezuelan opposition, but who has spent a lot of time in Venezuela, who has gone and actually lived in the barrios, who is married to a Venezuelan and who knows his Lenin and Marx and all the rest.

Maju said...

I appreciate your comment. At least we agree that the USA and at least some Euro countries are doing even a bigger mess of all by using public money to grant private benefits. Some Euro governments are more cautious and/or less reliant on purely speculative ("financial") capital but the attitude of Washington and London is extremly criticised even by the last Nobel prize of Economics (who is an insider very critical of the pyramid scam they call modern capitalism). It's "echarle sal a la llaga" instead of healing it.

If you have a problem with a pyramid scam, a Ponzi shceme, you sould not give more money to Ponzi but put him in jail. But Obama doesn't seem to get it. I really thought he was smarter than that but he's just a puppet of very powerful interest groups, just like Bush before him.

At leas Chávez appears to be hinting in the right direction. wether that is what he is actually doing in Venezuela or not, that is a more complex reality I can only watch from a distance.

You mention that the government is now asking for loans but I also recall that that same government managed to pay off the huge Venezuelan debt acquired in the past too. I am not the one to criticise getting in debt when you really need it - though unsure if that's the case.

As for your previous article on Lebanon: no way Venezuelans did that.

Ok. I was highly speculative. Guess it was the Chinese but not 100% sure.