Caracas Chronicles

Miguel, in a deep deep funk, makes a point that bears repeating:

You are worried that there is a shortage of dollars? Well, let me remind you this is a revolution. And the reality is, that there is a shortage of foreign currency for the private sectorwhich imported US$ 38.7 billion in 2007, but only received US$ 26 billion last year. That is a 32.8% drop. But guess what? The Government in the meantime, has gone from importing “only” US$ 19.7 billion in 2007 to importing US$ 34.3 billion in 2012, that is “only” a  74% increase.

So, you “feel” the lack of foreign currency, because you get essentially 33% less, but the Government has almost doubled what it imports and the Central Bank said those imports went up 25% in the first half of 2103. Yes, their imports are inefficient, overpriced, full of graft and the like, but they have the money, you don’t. Feels bad, but it’s reality…

It’s all part of a plan, folks.

1. Overvalue the currency to high-heaven, making local industry desperately uncompetitive and leaving the private sector deeply dependent on imports (and, by extension, dollars).
2. Shut down the dollar supply valve to the private sector.

We all had a fun time with step 1 in 2004-2010. We’re on step 2. now. Step 2 is no fun.