That’s the key thing to know about Venezuela. Currency controls mean that your foreign cash is worth more than a foreign ATM or credit card. And with the way things are going this week, way more.
A foreign credit card or ATM card will give you a constant exchange rate of 4.3 bolivars to the dollar. Today, the bolivar has fallen to almost 7.5 to the dollar for people seeking to buy bolivars, 7.7 for those seeking dollars. So if something costs 4,300 bolivars, that is $1,000 at the official government exchange rate, but only $573 if you can get your bolivars at 7.5
The Gringo Discount, now offering 43% off list price for anyone with access to dollars.
If there’s one topic that the world outside Venezuela seems curious about, it’s the Iran-Venezuela-Russia (and maybe China, Bolivia, Nicaragua, and/or Cuba) group that by some accounts are trying to destabilize the U.S. and its allies. It’s a hot topic. April 13, the Defense Intelligence Agency told Congress:
The Qods Force maintains operational capabilities around the world. It is well established in the Middle East and North Africa, and recent years have witnessed an increased presence in Latin America, particularly in Venezuela. As U.S. involvement in global conflicts deepens, contact with the Qods Force, directly or through extremist groups it supports, will be more frequent and consequential.
Luckily the head of the U.S. Southern Command came out yesterday and clarified what the Pentagon report meant:
We see a growing Iranian interest and engagement with Venezuela. … It’s a diplomatic, it’s a commercial presence. I haven’t seen evidence of a military presence.
The bike-riding, beard-trimming, mime-hiring, spandex-sporting weirdo Antanus Mockus (no really, click the link, watch the video, it will be one of the best hours you spend in front of a screen this year) is now the front-runner for presidency of Colombia.
A few posts ago, I upset a Venezuelan reader by suggesting that we probably don’t have to worry about massive electricity outages in 2010, what with rain arriving and Guri Dam’s water level starting to rise. Since then, nationwide power use and hydropower generation both jumped to 1-month highs, the streams feeding Guri settled back to well below their normal rainy-season levels, Planta Centro turbine 1 went back out of service after only one day, and Guri’s water levels fell to 248.66 m above sea level, 13 cm below the prior bottom April 16. So, worry away.
However, collapse won’t happen this year, unless the rains just quit. Water levels have declined 8.66 cm a day for last 3 days. That works out to a meter every 11.5 days, and we have about 7 meters to go before things really fall apart nationwide. Even if the decline speeds up, we have a couple months of slack in there. The problem comes at the end of the rainy season, if we still have only a couple months of slack.
PDVSA’s refineries are having problems. This is good news for companies that still have operating refineries, as profits rise when there is less competition, but bad news for consumers of diesel and gasoline. Not to mention bad news for PDVSA, which needs to get all that gasoline and diesel from somewhere.
The latest from Isla in Curacao is that it won’t be back til the beginning of May. I still say that’s wishful thinking. When it went down at the beginning of March, they said it would be at least two weeks til it was fixed. Then April 1, then April 15. From the start, I have said it would be June, and I’m sticking with that. I have never been there, the people I know there have no special information, and I originally didn’t even know which piece of equipment had broken down. I just know how these things work. As soon as we knew they would have to order equipment from overseas, it was clear that it would be months.
This just bums me out. After the weekend fire at the Cardón refinery’s catalytic cracker, one of the most complex parts of the refinery, they are saying all is under control and it will be up and running in a week. They had a fire at the same damn unit less than a month earlier, at which time they got it up and running quickly. This isn’t an old broken-down unit either, this is a piece of equipment that was just rebuilt in a $650 million project that took well over a year.
Meanwhile those projects that are operating are not well maintained. For some reason Youtube is rejecting my video I shot a couple weeks ago from the bus going past the upgraders at Jose, where tarry crude is refined into something that can actually flow at room temperature. The flaring was out of control. A couple stacks had constant 5-meter orange flames illuminating the night, and another was like a dragon, exhaling a raging burst of fire every three seconds.
This is where your fuel comes from. Ride a bike!
I finally took a friend up on her long-standing offer to take me out for a socialist arepa. (Pictures and hot dogs below the jump.) Continue reading