Thursday, June 04, 2015

The currency is worthless in Venezuela

(My new American Thinker post)

Once upon a time, circa 1980, I visited Venezuela.  The exchange rate was 4.29 Bolivares for one U.S. dollar.  The city of Caracas was alive, and the restaurants were fantastic.  I'm not saying that the country was perfect, but things were doing a lot better.

Today, we got some bad news about the Bolivar, or the national currency:
Just a month ago, $1 was worth 279 bolivars. That was already pretty dismal for Venezuela. Now $1 equals 408 bolivars, according to the unofficial exchange rate, which most Venezuelans get when they try to trade currency.
Put another way, one bolivar equals $0.002 -- less than a penny. The country's currency has lost nearly half its value since the beginning of May, according to dolartoday.com, a website that tracks the unofficial exchange rate.
It's another sign that Venezuela is arguably the world's worst economy.  Venezuela primarily relies on oil exports to support its economy, which was already under pressure before oil prices tanked in the fall and winter.
A bolivar less than an American penny?

We are watching the results of Hugo Ch├ívez's populism financed by high oil prices. 

It was a great plan as long as oil was $140 a barrel.  It kept a corrupt and highly inefficient public sector going, a source of a lot of political jobs and votes on election day.

It's not that way anymore.  Oil at $50 is not enough to pay the freight.

What happens now?  The answer may come in October:
The government owes about $5 billion in debt payments then, and there are few convincing signs that Maduro and his government can pay the bills. Venezuela could default on its debt in October, sending the country further into economic mire.
How likely is it that Venezuela will default?  I would say very likely if oil prices stay in double-digits in the near future.

P.S. You can hear my show (CantoTalk) or follow me on Twitter.    We discussed this situation of the bolivar on Wednesday's show:


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Tags: Venezuela and its currency the bolivar  To share or post to your site, click on "Post Link". Please mention / link to the My View by Silvio Canto, Jr. Thanks!

Bush's class plus the Obama disaster equals Bush more popular than Obama

A few weeks ago, I wrote about President Bush speaking at the SMU graduation ceremony.   He got a great reception from the students and parents.
To be fair, President and Mrs Bush are very popular at the SMU campus and Texas.   In other words, it was probably not a cross-section of the country.
“According to the poll, 52% of adults had a favorable impression of George W. Bush, 43% unfavorable. When Bush left office in 2009, only about one-third of Americans said they had a positive opinion of him. This new poll presents a notable shift as Bush’s overall favorability has remained well below 50% for much of his time as a presidential alum.
Overall, 47% say things in the country are going well, 52% that they’re going badly. That’s a reversal from March, when 53% said things were going well, the highest share to say so during Obama’s presidency. The shift comes across partisan and demographic lines, with no one group’s opinions driving the overall change.”
Polls come and go.   However, I think that this poll is correct for a couple of reasons:
1) President Bush has remained silent and away from politics.  He’s been active in non-partisan activities and shown a lot of class.    
2) President Obama’s foreign policy is a disaster and the domestic situation is not much better.  He has shown very little leadership or willingness to work with the GOP in Congress.   The real Obama legacy is that Democrats like Governor O’Malley and Senator Sanders are now running against his economic record.
Cheers for President Bush.   Glad to see that he’s getting some of the credit that he deserves.
P.S. You can hear my show (CantoTalk) or follow me on Twitter.



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US-Latin America stories of the week plus author Andrea Amosson from Chile


Guests:  Fausta Rodriguez Wertz, editor of Fausta's Blog, joins us for a discussion of US-Latin America stories of the week......
Click to listen:

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Tags: US_Latin America, Argentina and Mr Nisman, Venezuela and Pres Maduro, FIFA and scandal, Women in Latin America  To share or post to your site, click on "Post Link". Please mention / link to the My View by Silvio Canto, Jr. Thanks!

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