Caracas Chronicles

Now that the government has ever-so-sovereignly declared that Bs.31,200 is the sovereign price of a ton of aluminum in the domestic market, why not try this fun experiment at home?

1. Knock on Mr. Alcasa’s door and say, “Mr. Alcasa, I’d like a ton of aluminum, please.”
2. Hand Mr. Alcasa his 31,200 bolivars.
3. Put your shiny new hunk of metal on a ship, and take it abroad.
4. Step gingerly past the hapless CVG marketing official whose job it is to try to sell an identical hunk of metal on the international market for $2,500, and hawk yours for the going rate (US$1,780).
5. Bring your US$1,780 back to Venezuela, buy Bs.80,000 with them at the street rate.
6. Go back to Mr. Alcasa say, “Mr. Alcasa, I’d like 2.56 tons of aluminum this time” as you hand him his 80 palos.
7. Put your 2.56 tons of aluminum on a boat. (You may find you need a bigger boat this time.) Hawk ’em abroad for $4,550.
8. Bring your $4,550 back to Venezuela, sell them on the street for Bs.203,820
9. Knock on Mr. Alcasa’s door once more. “Jeepers, Mr. Alcasa, could I bother you for 6.53 tons of aluminum this time?”
10. Ship them off, sell them for $11,630.
11. Bring the $11,630 back, sell them on the street for 520,940…
12. Keep doing this as long as there’s a scrap of aluminum anywhere in the country to be bought. 
    
13. Buy a Gulfstream, and a polo team.

It really is remarkable: chavistas insist, as a matter of ideological pride, on selling $20-bills for ten bucks, and then they swear the reason they keep running out is a massive CIA conspiracy.

(BTW, the aluminum purchasing-power-parity exchange rate implied by the new precio soberano is Bs.17.50:$1 or so…make of that what you will.)