Yes, your author has watched the newsflow on the Chávez "nationalize it" for the gold sector and yes, thanks to all for sending me over reports and suchlike, it's always greatly appreciated.
However somebody who's done the real strong legwork here is Setty, so go over to his new post right nowbecause he reports on what Andre Agapov of Rusoro (RML.v) thinks of the whole deal. It starts like this:
Rusoro says no worries as Venezuela moves against gold miners
Venezuela’s only private-sector gold miner says it has nothing to worry about after President Hugo Chavez says he will nationalize the gold mining sector. It’s “not a concern for us at all,” Andre Agapov, president and CEO of Rusoro Mining, said late yesterday in a phone interview. “This is all to do with illegal mining activities, nothing else.”
Now go read the rest, cos there's tons of information waiting for you. Great stuff Settydude, chapeau.
Hugo Chávez may be about to go bald on us all (chemotherapy and all that), but he's not planning on slowing down. Via a headsup from Russ Dallen over at BBO Financial, here's the LAHT on the Chávez workoutvideo, in the shops now, phone now, satisfaction guaranteed or we'll refund your money in full, no quibbles.
CARACAS – Venezuelan state television showed Saturday new pictures of President Hugo Chavez wearing sports togs and doing exercises together with some of his officials while commenting on government issues.
The video footage, edited and set to music, shows an enthusiastic Chavez directing the physical exercises of his ministers, who lift hands and legs along with the president as he talks about the need for healthy routines.
Why is Malaga Inc (MLG.to) failing to rally into the new highs for tungsten prices? Probably because production numbers at Pasto Bueno suck. Here's the updated monthly production chart that uses the numbers filed to Peru's Ministry of Energy and Mines (MEM) yesterday, and April/May output at MLG.to totally but totally sucks. Whatever happened to all that talk about upgrades and higher thruput, dudes?
Bear Creek Mining (BCM.v) files suitagainst Peru over Santa Ana. Logical enough move from the corporate perspective, don't hold your breath on this one, though.
An excellent interview with the head of Colombia's Large Scale Mining government department. Lots of insight on the state of play in the country. Spanish language and I can't be bothered to translate it today.
"I'm in the second stage of the (treatment for the) illness, an evaluation organ by organ and other factors. I mustn't give any more details."
"I have an optimum level of recovery at nearly a month after the first operation."
So now you know.
UPDATE: Did you see the Ron Paul Ben Bernanke show too? There were a couple of moments back there that made me laugh out loud. Great entertainment, even funnier that people think it's serious.
And indeed, it sure looks like Hugo & Co. aren't going to take this lying down. Oil Minister Rafael Ramirez is appearing on live TV right now and he's already said that although Venezuela won't cut oil supplies to Citgo, it may cut sales to other outlets in the USA. And as for Hugo himself, here's a link to the tweet he put out less than an hour ago (as your humble scribe writes), the translation of which is:
"Sanctions against Bolivar's Fatherland? Imposed by the imperialist gringo government?
Well, they're welcome, Mr. Obama! Don't forget that we are the children of Bolivar!"
We've had the right wing in the US calling for sanctions against Venezuela for the longest time and Dubya never took the bait. But here we are with the USA under a CommieLefty President and the far right have got what they wanted all this time. Meanwhile, your author has that old refrain going round his head of "Careful what you wish for....."
The Government of the Bolivarian Republic of Venezuela has learned of the decision announced by the Department of State of the United States to impose sanctions against our oil national company, Petróleos de Venezuela (PDVSA), as part of a unilateral law targeting the Islamic Republic of Iran known as CISADA.
The Bolivarian Government expresses its strongest rejection to this decision since it constitutes a hostile action on the fringes of international law that violates the principles of the Charter of the United Nations.
The Bolivarian Republic of Venezuela and its revolution have a strong, independent and sovereign oil industry able to operate and permanently fulfill its commitments. Faced with this aggression, Venezuela further ratifies its oil independence and sovereignty.
The Government of the Bolivarian Republic of Venezuela is undertaking a general assessment of the situation to determine how these sanctions affect the operational capacity of our oil industry and, therefore, the supply of 1.2 million barrels of oil per day to the U.S. Pending this assessment, the Bolivarian Republic of Venezuela reserves itself the most adequate answer to this imperialist aggression.
The revolutionary Government calls on all the Venezuelan people, laborers and especially the oil workers, to stay alert and mobilized in defense of our PDVSA and the sacred sovereignty of the homeland.
"The Peruvian Nuevo Sol (PEN) crashed and was sent into the depth of Hades itself as it plummeted an amazing 0.3% to S/2.8115 on Tuesday as the realization that yet another South American state was about to fall into the baby-eating clutches of Hugo Chávez. A trader that did not want to be identified told Bloomberg that the rumors of Chávez sharing his baby meat meals with Peru Presidential run-off candidate Ollanta Humala were all true and that investors should be running for the hills immediately, making sure they take all their young children with them....just in case."
UPDATE: Paranoia and ooga booga scariness isn't confined to Bloomie.On this link Life In Peru's author Ward plays a joke on his facebook friends about Humala and, sure enough, they fall for it. And by the way, I agree with the points 1) and 2) he puts below it all (when being more serious).
Colombian President Juan Manuel Santos revealed that during his meeting with his Venezuelan counterpart Hugo Chávez, they agreed to advance the creation of a law that allows free trade between the two countries
Later in the note Santos is quoted::
"Personally, as I said so to President Hugo Chávez, recovering this market has a special value... (it is) a market that will always be very important to us."
So on Tuesday IKN asked, nay begged you for captions to go with the photo on offer there. We had plenty of entries mailed in and none were rejects, but a winner there must be. Well two winners in fact, as your impartial and unswayable judge (that be me) couldn't separate these two and we're calling joint winners on this one.
First winner is Rick B, owner of the wonderful blerg known as Ten Percent, who sent in this comment on the sartorial elegance on offer:
Second winner is site friend Setty, witty as always and tying in the photo's date with the fact that Juan Manuel Santos turned 57 that day. Setty also provides a nice dose of bizarre, which always goes down well Chez Otto. So those two both win U$8.50. Setty wants his to be donated to this site, which has been promo'd all week by A Tiny Revolution. Fair enough, it's on the way. RickB please contact and give prize collection instructions. Have a nice day, y'all.
In a dramatic development that has shocked absolutely nobody, Oldboy Prez Chávez goes to Bogota today to meet, greet and play kissy-makey-uppy with Newboy Prez Santos. It's like watching the politics of an elementary school playground, honestly. Hey, it's so unsubtle that maybe even the EngLang media will be able to decode it this time! On second thoughts.....
In true GOP style, there's no problem about calling a democratically elected leader dictator...and there's no problem about accepting sponsorship moolah from the dude at the same time either. Another episode of 'money talks bullshit walks' brought to you by Structurally Maladjusted.
h/t to delacour over at Latin America News Review for this one.
Nikolas Kozloff over at Counterpunch has managed to fall for the classic trap of believing somebody else's bullshit, just because it's written down. Kozloff's latest column is all about the "story" that Chávez thinks the Haiti earthquake was caused deliberately by the USA and some secret nefarious doomsday device used by its military command. Here's how his stuff starts:
"...Chávez has another zinger: the United States intentionally created the earthquake in Haiti through means of a secret weapon.
Chávez seemingly believes he’s in the middle of the Mel Gibson movie, Conspiracy Theory. According to Spanish paper ABC Chávez has joined the ranks of the truly paranoid, declaring that the earthquake was the result of an insidious U.S. naval test. Ultimately, Chávez believes, Haiti served as a test case for further U.S. machinations.."
Unfortunately, as explained to the world by two far better and more diligent bloggers, first broken by duderino over at Abiding and then by the all-conquering Borev, the whole story was total bullshit from start to finish, created as somebody's flight of fancy and then picked up by others in a global version of the telephone game.
"This all sounds fishy, so I did some more Googling, but luckily for me I speak Mexican so I ran across this piece which had an image of the original conspiracy theory article in question.
"The conspiratorial article happens to have been briefly be posted on Venezuelan community participatory TV's website under the anonymous byline "Patria Grande". As the posting on Rebelion explains, the rightwing Spanish ABC news agency then wrote up a story claiming Chavez had made the conspiratorial claim, which then got picked up by Fox News (among others) and ended up being posted on my blog by some anonymous anti-Evo wingnut.
"Hugo Chavez said nothing of the kind. Spanish ABC news simply lied and others followed. You will remember ABC news from other such lying fiascos like when they made up the existence of a shadowy conspiracy behind the Bolivian and Venezuelan constitutions, which was later repeated by the Washington Post." continues
"1. Some Venezuelan blogger wrote a weird story about the U.S. causing the Haiti earthquake with some sort of earthquake weapon.
2. A website operated by a Venezuelan state TV channel included a link to the post in their roundup of Haiti coverage from all over the country.
3. Some right-wing newspaper in Spain published a story about the link, referring to it as a Venezuelan state "press release."
4. Fox News reports the Spanish story, saying the earthquake weapon claim comes from "Hugo Chavez' mouthpiece."
5. Randomly, Vladimir Putin's English language teevee channel Russia Today claimsall over thefucking place, Drudge sirens!! that Chavez himself made the statement. This video report is picked up
6. Right wing news "analysts" opine about what level of threat this represents to the United States." continues
So Nikolas Kozloff, you win this week's coveted award. Not doing your DD before opening your fat mouth makes you look well, well stoooooopid. Enjoy, dumbass:
Bizarrely, I'm now getting crits from readers wondering why I haven't written anything on the Venezuelan devaluation. Well, in fact I have.
1) This time last year I was saying that Venezuela would devalue in the second half of 2009 (here's one example post, plenty of others if you're that bothered to check back). So I missed my prediction by nine days. Bite me.
2) This weekend your scribe put together a note on the deval as part of IKN37 that was published yesterday to subscribers. So ahhhh, what da hell..here it is below. But really, with the world and his wife all throwing in their opinions (from the smart to the stupid to the downright dishonest revisionist theories of the Caracazo), I really don't see why you need this humble corner of cyberspace chipping in, too. But hey...that's just me.
Anyway, here are the mumblings that came as part of IKN37 yesterday.
Venezuela: The fixed currency moves
So, I missed on my forecast of “Venezuela will devalue the VEF in the second half of 2009” by nine days, having said on plenty of occasions that I thought Venezuela would deval in the second half of 2009 ( example (6)).
The surprise here is not the fact that Venezuela has devalued its currency, the Bolivar Fuerte (VEF), as it was obviously overvalued against peers and fighting a parallel rate nearly three times its official face value. After all, I’m writing for an audience that understands gold the metal here...I feel no need to explain how fiat currencies naturally devalue over time as the concept is clear to all and any attempt to artificially prop up a currency value is doomed to failure over time. Neither is the surprise those shills that call it a humiliation for Chávez, as the real humiliation would have been to hold the status quo and watch the country go to the dogs. For sure Chávez has been stubborn about not devaluing the VEF for about a year or so (because he’s really not very good at economics) but he’s finally bitten the bullet. Finally, there’s no surprise about the sudden rise in pseudomath around this subject; as just one example we have Venezuela’s El Universo newspaper (opposition bias) telling its readers that the basket of goods needed for basic needs will exactly double in price as of tomorrow (7). The kind of silly stuff written by people that don’t understand money’s role. Expect plenty more.
The surprise here is the depth of the deval. The new official rate (to be used for certain infrastructure and food related imports) of 2.6/1 is basically for show, as the real new rate is the so-called “oil dollar” rate of 4.3/1, the one used for oil revenues brought in to Venezuela by PDVSA. This revenue is the lifeblood of the economy, and suddenly PDVSA will be adding plenty more VEF into the local economy for every dollar deposited. Many were expecting this deval, but not as drastic a measure as a doubling of the forex. In effect, Venezuela has, in one fell swoop, turned its currency from “expensive” to “reasonably cheap”.
It smacks of getting all the bad news out of the way in one go. The main bad news will take the form of an immediate dose of high inflation for Venezuela (perhaps ‘even higher’ is a better term, as 2009 CPI came in at 25.1%). This is the bitter pill for ordinary José Q. Citizen to swallow in 2010, but macroeconomic theory says that the inflation bump should be a temporary hurdle. Venezuela has neglected its local economy and has been running on imported goods, thanks to the cheap dollar prices brought about by the 2.15/1 rate. Up to now it’s been between difficult and impossible for local manufacturers to compete on a price basis against imports. Now that the forex rate has doubled, this means imported goods should get expensive compared to locally produced goods and the Venezuelan internal economy should reactivate. True also for exports, and given time Venezuela can start making inroads into the heavy reliance it has on oil as its main export good. The problem is that such a reactivation takes time and the lag in firing up factories means that in the meantime people are obliged to buy the price-bumped goods from abroad. That’s called price inflation.
Next problem: Fiscally, Venezuela runs the risk of overstoking the economy at a governmental level. With more VEFs for every dollar, the temptation to spend its way out of trouble will be high, perhaps even irresistible. This is another aggregate to inflation that has to be watched in the medium term and the prudence (or not) of central government will be key in reining in any extra inflationary impetus.
On a monetary level, the move is positive. With U$7Bn now coming out of CenBank reserves this will leave around U$27.8Bn in the reserves. This still needs to climb compared to M2 levels in Venezuela (currentlyVEF236Bn is in circulation in the country) but the move to cover VEF 4.3 with every dollar brought in will help bring that under control in the medium term.
The bottom line to this quick’n’dirty on the Venezuelan devaluation is that it might be late coming, and Chávez&Co is certainly setting itself up for political flack from the inflation in the immediate pipeline, but the move is the correct one economically speaking. It would have been better perhaps last year, but doing it in 2010 is a mile better than doing it in 2011. However the inflation that Venezuela will suffer in the short term due to higher prices for imported goods may turn into a longer bout due to governmental spending spree of the extra available VEF funds. Time will tell on that score.
One of the classic potshots aimed at Venezuela from time to time is the imminent decline, or implosion or just plain death of its oil industry. This has been going on for the last five years at least, but those with their rabid hatred for all things Chávez have never let facts get in the way of their made up bullshit and continue banging the drum.
The latest salvo against Venezuela's oil industry is one of their old chestnuts, that of the rig count. In a nutshell, by counting the number of rigs in operation you can get a decent idea as to how the sector is operating...the more rigs, the more dynamic and healthy things are. Makes sense, right? So here's the chart for the Venezuelan rig count, as supplied by industry leaders Schlumberger (resource page here). It discounts the 50 nationally owned rigs and just concentrates on foreign owned rigs (and as such matches the latest Vzla government figure of 140 rigs to a tee).
As we can see, in the last few months we've seen a drop-off in Venezuelan rig activity and there's not much doubt about that. So as day follows night, this is being jumped upon by the myopic oppos as clear evidence of the imminent etc etc blah blah we're all gonna die. (helped along by slanted reports from people who should know better). What we need here is a bit of context, so this chart below isn't the kind of thing the Chávezhaters will be showing off to their sycophants any time in the near future.
Yup you got it; apart from that oil strike period in late 2002/early 2003, the world rig count pretty much matches the evolution of rig counts in Venezuela. So rather than predict the end of PDVSA these Chávezhaters should be wailing about the death of the whole freakin' world oil industry, shouldn't they? Or maybe they should just cut to that Mayan 2012 prediction about the end of times and blame Chávez for that too. Or maybe, just maybe they should learn a little bit more about their subject and then they might just...
...Chávez proves he's a dumbass about economics and plays straight into the hands of the bankers. Once again, the variation on "I'm going to nationalize the banks" comes from Chávez, and once again all the financial community jumps on it hard to stoke up as much panic as possible. I mean, why should it be that the only time people take a Goldman Sachs analyst at face value is when he's saying something like....
“We should take his (Chavez's) statements at face value,” Goldman Sachs Group Inc.’s Alberto Ramos said. “It’s one of the key sectors of the economy that the government hasn’t yet taken substantial control of.”
...even though anyone qualified enough to work at the vampire squid knows that Venezuela can't possibly nationalize its banking system. For one thing, who's going to buy its debt afterwards?
Now for sure he might like to nationalize the banks, but Chávez isn't good at economics...we've been here before and seen how he's made these noises and backed off and made the noises and backed off again. This time won't be much different, as at some point in the next couple of days his financial peeps will quietly explain things to him and then the subject gets dropped...again. But until then, the bankytypes will milk this for all it's worth. We can see that today, as the bid/ask spread for the Bolivar Fuerte parallel rate moves from 0.2 difference to 0.4.
Thus Chávez, seeking to limit the financial speculation and profit margins of the Venezuelan banks (one of the most profitable banking sectors in the world, by the way) only manages to screw his people and add more % margin to the bankers' back pockets. He should stick to talking about the misiones, frankly.
In response to Colombia’s complaint to the United Nations about Venezuela’s “threats of war” earlier this week, Venezuela reiterated its intention to promote peaceful international relations while defending its sovereignty against a potential attack from Colombia, which recently signed a military pact with the United States yada yada continues here
Your humble correspondent has plainly stated on many occasions that the English speaking media covering Latin America provide a woeful service. The coverage is biased, the message doesn't reflect reality down this way, the etc ad infinitum. But you guys up there go "Hmmm, Otto...just your opinion isn't it?" and insist on crummy things like 'evidence' and 'proof' and stuff. So check out this post from Cowboy in Caracas that has the Disassociated Press's reporter in Venezuela omitting the whole pro-Chávez argument in a recent political issue because he himself..the reporter..didn't believe what the President of his host country was saying.
Here's how the post begins and I heartily recommend that you click through because CIC makes a solid, reasoned and sober argument (unlike the normal rants you suffer through at IKN).
On August 5, Chávez held a special news conference with the international press that lasted several hours. He presented evidence that the rockets were among five that were stolen from the Venezuelan armed forces on February 25, 1995, when a military base was attacked by Colombian guerillas. This was four years before he became president.
In an Associated Press article with the byline of Christopher Toothaker published on the Internet on August 9, mention is made of Colombia’s accusation and that Sweden confirmed the sale of the weapons to Venezuela. (That happened in the late 80s). It also said that, “Chávez denies aiding the FARC.” But the article did not say anything about the weapons being among those taken in 1995.
So I called Mr. Toothaker to ask why he omitted that. He replied that he didn’t “believe” that they were the weapons that were stolen. He added that Chávez said the weapons involved were taken by the ELN, (the National Liberation Army in Colombia). That was pretty much all of our conversation.
Afterwards I was thinking that maybe the weapons that the Colombia government retrieved were taken from the ELN and not the FARC. It is difficult for me to trust anything coming from the Colombian government. I thought about calling Mr. Toothaker again to ask about that possibility, but decided not to do so because I felt I would just receive another of his beliefs.
I, too, have beliefs and I often express them in my writing. But I write commentaries. The Associated Press is supposed to present facts in their news stories, not beliefs. Unless, that is, it is a religion and its readers are supposed to accept whatever it says as an act of faith. The fact that Chávez called a special press conference to explain the source of those rockets seems to me to be a rather important fact that should have had a place in Mr. Toothaker’s article.
....Hugo Chávez's presidential approval ratings, monthly in 2009.
There are many surveys done in Venezuela on this subject, but with yesterday's Datanalisis survey results for July published it give us a chance to track one single (and reputedly reliable) survey company's results using the same question and same demographics every time.
We see that in the period January to March, Chávez won support through the constitutional amendment period (when there was no poll taken). No poll taken for April. Then his support dropped back down to what the boss of Datanalisis calls his "traditional support" of between 50% and 54%. This month it's moved back up to 57.3%. The negative views towards Chávez dropped from 41% in June to 38.8% in July. Presumably the other 13.9% are neutral towards him or offered no opinion.
Thus, if media channels were to reflect the true state of opinion in Venezuela, on average 573 out of every thousand news reports or articles should be supportive of Chávez, 388 should criticize him and 139 should take a neutral stance. Anybody note a slight discrepancy with reality there?
