Dawn of the new oil era, Venezuela’s hyperinflation and the ‘holy Trinity’
Prelude to Venezuelan darkness of oil age era, as 6977 days gone in despair and agony since the virus of ancient origin Marxism spread like a plague in many Latin American countries, It was Venezuela’s turn to suffer the consequences and with mind-infected Hugo Chavez ,ex-military commander turned politician took the rein of Venezuela and the process of contamination slowly started to spread, the deadly virus of ‘pseudo-equality’ indoctrination through populist propaganda coded ‘Chaveism’ attacks most vulnerable, the low and middle class people, by playing tricks with their frontal cortex while robing the welfare at a glance….
People lost their hope and wealth, many turned sick, child birth together with social welfare rapidly decreased, while death rate and unemployment increased, oil revenues collapsed ,people fleeing homes as the Maoist militia started repression and forced slavery work on the abandon agricultural field of Venezuela to battle disease and famine…
quite an eerie entry to an apocalyptic cut-scene of many future Hollywood movies to be released, with perfect blended script of a apocalyptic deadly virus with ideological manifestation, very much accustomed to the idea of late Sci-fi drama starting with the famous‘ based on the true story’…
Movie industry ( just as oil industry) explores any given chance world wide to turn crisis into profit and gather global audience(income), well it’s 21' Century and we live in age of consumerism, no wonder much of trend and cultural diversification and perspective is attributed to social media, movies,and global trade commerce
how that corresponds to current Venezuela crisis and what is the current role of US in ‘OPEC’ umbrella institution, Russia& China’s involvement one needs to get back to the year 1999
Time when Chavez took over, the situation was not as grim and dark as the scenario I’ve described of course, but (after a failed coup in 1992) Chavez introduced the idea of giving back the power to the people and with that mindset, started a social and healthcare welfare reincarnation with the help of Cuban’ doctors he managed to provide a free healthcare even for the remote places in Venezuela, even a price controls standards were introduced to make essential goods more affordable for the poorest by capping the price of products such as flour, wheat,oil and initially invested in infrastructure and even tried to revive the state controlled vital assets oil field revenues, but as in many cases in Latin american, history repeated here too, the wealth and trade from oil profit was spent carelessly, while only a fraction was invested on oil revenues and crude export, road infrastructure, production and education.
When crisis show sign of State weakness the first step many dictators likes to play is to shift the blame and stumble at the first ideological hurdle, into authoritarian one, anti-imperialism and anti-globalism rhetoric follows naturally that fortifies the real cause-effect,equality becomes in-equality and poverty rises just like a virus that spreads slowly, first sign indicates at national currency hyperinflation, as a consequence on Venezuela’s case the collapse of global oil price index,
that by default brought new set of measures from the Government towards increasing significantly the national debts , a curse that continued with his successor, Nicolas Maduro, crisis only plummeted deeper and the inflation was on the downward spiral and according to IMF current inflation rate stands at staggering 83000% that is only one part of the story, as later US imposed the sanction that tormented the very core of society, UN issues a comprehensive report ;
Office of the UN High Commissioner for Human Rights on paragraph 36 states that: “The effects of sanctions imposed by Trump and unilateral measures by Canada and the European Union have directly and indirectly aggravated the shortages in medicines ’ further more on paragraph 37,experts argues that ‘ “In Modern-day economic sanctions and blockades are comparable with medieval sieges of towns with the intention of forcing them to surrender. Twenty-first century sanctions attempt to bring not just a town, but sovereign countries to their knees”
These conclusions shouldn’t surprise us, as Economic warfare is nothing more than plain and simple Protectionism, as I have indicated on my previous published opinion, on the Protectionism and Interventionism that produced tariffs rise towards China, Russia & Turkey, this doctrine is sort of personal trademark of once a very successful businessman, turned into President, Trump and his administration. The measures taken under the protectionist reasoning often correlate to the same measures as those employed under the economic warfare doctrine. Both complement each other in the name of democracy and under the oath of free trade and free market capitalism.
But what about National currency,Bolivar? well practically that currency become useless from hyperinflation and people rushed towards black market for conversion into Us dollar, there was significant demand surged for the bitcoin( BTC) in order to save what can be saved, typically as in other countries that went through hyperinflation, like Zimbabwe, South Africa ,Turkey, Argentina people turn towards the safer, decentralized means of currency, and not state controlled due to lost confidence on Central bank and the Corrupt governance practices,
that directly effects the quality of life and put the people on depression mode, but even the conversion into crypto-currency and USD recently has turned into real challenge and impossible mission, according to Leonardo G and Daniela O. my libertarian comrades from Venezuela the lack of electricity, weak and frequent loose internet connection turned Valenzuela into real chaos, lawless land, with bleak and uncertain future
with core divided society into two camps, loyal to interim -president Guaido and State controlled authoritarian Capo, Maduro, who ironically improvised and introduced the national crypto-currency petrol coin as the mean to circumvent the sanction of US pegged oil trade dollar, as biggest oil production countries under the OPEC Umbrella have exclusively US dollar as only means of trade. Unlike the petrol coin-Maduro’s project,that remains anonymous and marginalized to majority of OPEC trading countries
After the Sanction by US Administration, Russia and China who remain the closest ally of Maduro have been engaged on numerous trade bypassing the USD, especially during the time when Russia was imposed with heavy sanction for occupation of Crimea,Ukraine during 2014, instantly Gold was used ( instead of Usd) for barter trade commodities between the ‘unholy trinity’ of Russia, Venezuela & China, that explains the surge in last 6 years of Russian national gold reserves, as well as China’s increased volume of gold in the same time frame, and the latest movement from the Venezuelan regime to withdraw the gold reserves from the intentional banks in London (speaks volumes as to where is the Venezuelan gold heading) move that was halted by UK authorities
cunningly Russia and China not only supported Venezuela with debt in exchange for Crude oil but also bailed out from bankruptcy and stave off the collapse of the State by repeatedly extending financial lifelines in the margin of billions of dollars debts
For the most part the oil-for commodity trade remains good for all ‘ trinity’ involved but that might change soon, spearheaded by US Administration that are firmly supporting Juan Guaido as the only legitimate president that could indirectly implicate Russia and China into complex domain, in a sense that (when rather then if), political changes occur it will complicate balancing the debts returns, billion of dollars loans given to Maduro, as the old saying goes ‘ Novus Rex, Nova Lex” Guaido’s new administration may look into contractual loopholes to not meet the signed terms agreements from the previous regime, or simply rule ineligible the whole process, that gave a much needed lifeline to the regime and financial boost, as an exchange for a cheap crude oil
Even though Venezuelan oil production declined severely, (in comparison with the time when Chavez took over) it is a safe heaven and last financial resort of Maduro’s reign as if he can keep the oil revenues under his control, that accounts for about 98% of its national currency earnings, then he may count on the support of Russia and China not because they share the same political ideology, but they have a bigger stake(debts) to lose if they fail to maintain the power.
No doubt people of Venezuela are facing existential crisis and exodus of biblical proportion , according to UNHCR statistic more the 3 million people migrated during the 2018 alone, and the latest twist with power shortages and lack of essential water, food and medicine supply adds the drama and anguish people are going through, many nation went through similar nightmare on their path to freedom,(remember Kosovo!) only question remains for how long?
While the suffering continues, there is a tiny hope for a quick fix as of recent statement from Vice Pres. Pence ‘There is no timeline’ about the possibility of regime change in Venezuela!? that pretty much sums up that the people of Venezuela will be tested to their core determination, where patient, resilience and collective awareness may be their guided wisdom towards their new hope for better & freer future