Jim Ulvog

Venezuelan government supported with cash from investment bank while support from military is weakening

Image courtesy of Adobe Stock.

A New York investment bank bought bonds from the Venezuelan central bank at a steep discount and got a lot of heat for doing so. The military is applying more violence to protesters as support from the rank and file appears to be shrinking.

5/30 – Wall Street Journal – Goldman Sachs Under Fire for Venezuela Bond Deal – Goldman bought $2.8B of bonds issued by the government-owned oil company for $865M. That is 31% of face. If, and this is a big if, the bonds were to be paid in full, on-time, at face value that would produce a 40% return.

Goldman is in a PR mess because the bonds were held by the Venezuelan central bank, meaning Goldman essentially put almost a billion dollars into the government’s hand.

Article says Goldman has been increasing their holdings of Venezuelan debt over the last few months. Their play is that if government gets its finances in order, the bonds will soar in value and Goldman will make a huge profit.

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By Jim Ulvog, ago

Land of the free because of the brave

Image courtesy of Adobe Stock.

Those of us living in the United States are blessed with religious freedom, political freedom, and economic freedom because those who went before us fought for freedom.

Many of those fighting offered up their life for freedom and the offer was accepted.

I am humbled and grateful to God that some of my ancestors are included in the long list of those who fought. I am especially humbled that a great, great grand-uncle is in the list of those who died in the defense of freedom.

Because of their sacrifice, I get to enjoy this kind of freedom:

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By Jim Ulvog, ago

Why, oh why, did production of oil and food collapse in Venezuela? What could have caused this amount of human suffering?

Shipwreck standing on the beach with the sea in the background. Margarita Island. Venezuela. Photo courtesy of DollarPhotoClub.com

Devastation in the oil industry and food supply chain in Venezuela is due to intentional government policies.

One article sees how the government caused the damage to the oil industry while another article sees the devastation in the food supply but cannot see any direct cause.

(Cross-post from my other blog, Outrun Change.)

5/7/17 – Forbes – How Venezuela Ruined Its Oil Industry – Here is a primer on how to destroy your oil industry when you have the world’s largest proven reserves of oil and are in the top 10 of world oil producers.

If you want to destroy your country, the article provides a how-to-guide, using Venezuela as the road map.

The high point of oil production in Venezuela was 3.5M bopd back in 1998, which not by coincidence was the year Hugo Chavez became president. Production then began to slip. How could that be?

After civil unrest in 2002 and 2003, Chavez fired much of the staff of the national oil company, letting go 19,000 experienced staff.

Let me translate that: 19,000 staff who knew how to produce extra-heavy oil were fired and replaced by people whose primary job skill was loyalty to the president.

Extra heavy oil takes specialized knowledge and is very expensive to produce on top of oil production already being capital-intensive.

To generate more revenue, Venezuela invited five of the oil majors to develop more oil production. The form of investment was a partnership. The five majors invested many billions of dollars in oil production.

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By Jim Ulvog, ago

When do we get to call the ‘Maduro diet’ in Venezuela a crime against humanity?

Consequence of intentional government policies in Venezuela. Image courtesy of Adobe Stock.

A one-year old child who weighs 11 pounds.

Eleven.

In what used to be the regions’s richest country, the average weight loss in the last year is 19 pounds.

That’s an average weight loss according to a survey by social scientists measuring the impact Venezuelan government policies are having on the citizens of the country.

It is called the ‘Maduro diet’ in dishonor of the president who is gladly continuing the polices that have broken the once rich nation.

It is a common site to see people picking through trash hoping to find something that is edible.

When will those of us who don’t have to decide which of our children get to eat today start calling the expected results of intentional policies a crime against humanity?

Let’s take a quick look at health care in Venezuela before returning to the starvation issue.

Collapse of the health care system

The medical crisis is so bad that even CNN has noticed. On 5/11/17 they reported Amid chaos in Venezuela, infant deaths, malaria cases skyrocket.

 

The government released statistics for 2016. They reported:

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By Jim Ulvog, ago

Ongoing violence in Venezuela against those who merely want to their children to eat

In Venezuela, above activity is sufficient to draw weapon fire or armored tanks. Image courtesy of Adobe Stock.

The violence in Venezuela directed against those people who merely wish to keep their children from starving continues.

My previous comment: 4/19/17 – Washington Free Beacon – Socialist Venezuela Leader Steps up Arming of Supporters After Outlawing, Confiscating Civilian Guns – The government has spent the last five years confiscating guns from private citizens. That’s what authoritarian, totalitarians, and other bad governments do.

Why? So they can’t defend themselves.

From what might individuals need to defend themselves from?

How about 400,000 loyalists who are going to be armed by the government. (more…)

By Jim Ulvog, ago

“Magic without wizards”, or, why is your favorite bread on the shelf when you want it?

Consider merely the way that your favorite bread is always available, usually from many bakeries. And at the time you want. The bakery doesn’t know whether you will stop in on your way to work, during lunch, or after having dinner.

How can it be that several bakeries know to have your choice of bread available, whether sourdough loafs, whole wheat biscuits, rye rolls, croissants, or cranberry bagels? How did they know to order enough yeast, oil, and flour? How did they know what mix to bake before the sun came up?

How did the wholesalers know enough to deliver the right amount of flour to all the pizzerias, bakeries, and pastry shops?

How did the farmers know enough to plant the right amount of wheat, oats, barley, and rye last spring to harvest enough this fall to satisfy all those bakers?

Hmm. What could be getting all those people working together to make sure my favorite and your favorite bread is available when you or I want it?

Ponder these and many more questions just in terms of having bread on the shelf in this video, called “It’s a wonderful loaf:”

 

[youtube=https://youtu.be/ljULutAUL7o?t=33]

 

The answer of how all that happens is readily available for all who want to find it.

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By Jim Ulvog, ago

Freedom continues to evaporate in Venezuela as misery continues to increase. Hmm. Why do those two trends typically seem to accompany each other?

What economic system produces this result? Image courtesy of Adobe Stock.

Ponder what economic system produced this suffering, misery, and loss of freedom. (cross-post from Outrun Change.)

4/19/17 – Wall Street Journal – Venezuela Antigovernment Protests Turn Deadly – Teargas and gunfire broke up widespread protests on Wednesday.

The death toll rises. Two dead on Wednesday with many more surviving gunshots they received. Seven dead in the last month. Forty-two dead in 2014.

Shooting protesters after stealing all their guns is just how authoritarians and totalitarians tend to roll:

4/19/17 – Washington Free Beacon – Socialist Venezuela Leader Steps up Arming of Supporters After Outlawing, Confiscating Civilian Guns – The government has spent the last five years confiscating guns from private citizens. That’s what authoritarian, totalitarians, and other bad governments do.

Why?

So they can’t defend themselves.

From what might individuals need to defend themselves from?

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By Jim Ulvog, ago