Thursday, December 11, 2008

Chavez and Venezuela are in Trouble

This isn't going to be pretty.  I truly feel for the people of Venezuela, they are in for a rough time.

Investor's Business Daily -- Chavez Steps Into 'Devil's Excrement'
Venezuelan oil prices are now $34 a barrel. Producing 2.3 million barrels a day, down 16% from 2005, and now consuming 795,000 barrels of that, as Caracas investment banker Miguel Octavio estimated on his blog, "The Devil's Excrement," he doesn't even have enough earnings to finance imports. He's given away about 424,000 barrels of oil output, and must make do on sales of about 1 million barrels. With oil down, Chavez has entered the worst phase of the oil cycle.

The cash he used to buy elections in 2004 and 2006 is no more, and his hasty call for a new measure to end term limits — and enable him to be president for life — is pretty much a desperate effort to end any calls for accountability in the wake of the bust.

He's not likely to last in these conditions any more than the other strongmen thrown out in Venezuelan history. The irony is that he sold his revolution on faith in socialism.

In reality, it was an ungodly faith in high oil prices. With oil prices falling, the devil is coming for his due.

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