Caracas Chronicles

These days, the government faces two seemingly intractable crises: there are far too many guns in the streets, and there are far too few bonds in the BCV-regulated SITME forex market. But with a bit of audacity, you could well turn each into a solution for the other. So here’s a modest proposal: allow people to trade guns through SITME. 

When you think about it, it’s a win-win proposition.

If there’s one thing the SITME system has proven beyond any doubt is that any good you allow Venezuelans to use as an intermediary to get access to greenbacks for Bs.5.40 a pop is eventually going to run out. And as traditional police methods have proven entirely inadequate to the task of ridding the barrios of guns…well, put two and two together and you have a radical new take on the Ley de Desarme.

The scheme would be simple:

1. Allow people to deposit their guns in banks, no questions asked.
2. Allow the banks to package guns together and issue paper against them. (Think of them as Collateralized Gun Obligations.)
3. Allow other people to buy the CGOs for bolivars.
4. Credit the bolivars to the gun depositors.
5. Allow CGO buyers to resell them in the NYSE for dollars, controlling both ends of the operation to ensure the implicit cost of each dollar doesn’t rise above Bs.5.40.
6. Ship the underlying guns to the U.S.

I can guarantee one thing: keep the implicit dollar price at Bs.5.40:$, and those CGOs are going to last what a fart lasts in the proverbial chinchorro. The price banks pay for gun deposits would track CGO pricing, so the massive pent-up demand for dollars would translate into an irresistable lure for people to hand in their guns.

In fact, run this scheme for a few months and I can guarantee you’ll have a gun-free 23 de Enero by Christmas. And, as an added bonus to chavista fanatics, you dump a major social problem on the streets of El Imperio, to boot!

It can’t fail.