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Wednesday, April 16, 2008

Hugo needs the money, pronto

When not receiving support from Obama bundler Jodie Evans, Hugo's busy raising his own taxes.

Fist the Evans story, via Larwyn:
Obama Big Money ‘Bundler’ A Hugo Chavez Supporter
Code Pink has been at the forefront of the anti-war movement and has involved itself in many attacks on our members of the military. They’ve even targeted the wounded for their attacks on the war in Iraq. Because of this connection, pro-troop groups are demanding that Obama return the $50,000 that Code Pink operative Evans gathered from her associates to donate to the Obama campaign.
Jammie Wearing Fool has the update on the windfall oil taxes story, which, as I mentioned previously,
The tax will also apply to state oil company PDVSA, which now controls all of Venezuela's oilfields.
Mind you, all foreing oil companies are at least 60% owned by the Venezuelan government.

BUT
there is one exception:
Chavez is giving China 30% of PDVSA's oil operations within the next five years (h/t Venezuela News and Views). After firing the experts on the field and draining PDVSA's accounts, PDVSA's oil production continues to decline, so Chavez is hoping Chinese technology and expertise will help PDVSA meet its daily 1 million barrels quota with China. PDVSA's own goal of 5 million barrels a day has been moved from 2012 to 2015. That's not very likely to happen, since, according to the link, PDVSA has only 72 active drills.

Brazilian oil will, in time, be a huge competitor to Venezuelan oil, but not yet.

The Beeb claims that the "windfall profit" tax
It is President Hugo Chavez's latest attempt to get greater control over his country's oil.
Bloomberg explains that some of the proceeds
would help pay for the nationalization of Luxembourg-based Ternium SA's local steelmaking unit and the Venezuelan subsidiaries of three multinational cement companies.
The Wall Street Journal, however, notices another very important reason (emphasis added):
The windfall tax is also a sign of how eager Mr. Chavez is to get more money ahead of municipal and gubernatorial elections later this year. Venezuelan lawmakers passed the bill just two days after Mr. Chávez told them his government urgently needed the money.
That Bolivarian Revolution doesn't come cheap. The political machinery needs oiling, particularly when it hinges on making the poor entirely dependent on government for water, electricity, public safety and food distribution.

Hugo's also considering making exchange controls more "flexible"
Venezuela, which has pegged the bolivar at 2.15 per dollar since 2005, has sold dollar-denominated bonds in the local market on a weekly basis this year in a bid to meet increased demand for foreign currency. Finance Minister Rafael Isea said April 2 the government will sell dollar bonds later this month directly to importers.
Devaluation soon to follow?

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1 Comments:

At 11:37 AM, Blogger foutsc said...

Great info. Keep beating the drum! Fidelito is a paper tiger. His threats to shut off the US oil supply is BS. From what I have heard, we refine most of his oil, so the reality is actually the reverse. We could refuse to accept his oil and it would devastate his country. I admit I don't have all the facts. Do you have more info on this aspect?

 

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