What would you as a bare minimum call creditors knowingly financing a government that in itself constitutes a brutal violation of human rights? Odious?

Sir, John Paul Rathbone, Robin Wigglesworth and Jonathan Wheatley, with respect to the surrealistic debt-restructuring initial steps in Venezuela quote Hans Humes of Greylock Capital, who is forming an investor committee with “Ultimately, there is going to be more money made in Venezuela than even in Argentina”. But the authors also rightly conclude in “The geopolitical and humanitarian consequences are likely to be larger still”, “Caracas plays its last cards” November 22.

Sir, “Food is in short supply” does not even begin to describe the tragedy.

Look at Venezuela as a prison. The food and medicines supplies it receives should be more than enough to keep all inmates healthy, but, since the guards have stolen so much of it, many prisoners, many children among them, are dying. And, in order to be able to steal more, the guards also took on huge debts in the name of the prison. And now the original creditors, or those who bought in at a later stage, and who all had all the possibilities of knowing very well what was going on, but that turned a blind eye to it when the interest rates offered by the guards were so irresistibly juicy, they want to be repaid. Will the guards do so? Will the prisoners allow that?

I have for decades called for Venezuela’s oil revenues, lately around 97% of all Venezuela’s exports, to be shared out to all its citizens, as the only way to guard against any odious or just plain dumb exercises of centralized statist power.

So what would happen if now the Venezuelans agree, in a referendum, on doing just that and then proceed to carry out the necessary changes in its constitution; and asks the IMF or the World Bank, with the assistance of other banks, to set up an oil revenue distribution system that keeps all oil exports invoiced in the name of Venezuela’s 30 and so million citizens? I am no lawyer but would a judge in New York approve the embargo of Simoncito’s part of oil, that if received would help to feed and keep Simoncito healthy?

Desperate times calls for desperate solutions, but perhaps some desperate solutions carry the potential of turning into magical solutions. For an oil cursed nation like Venezuela, that might just be what opens up its future to a much better tomorrow.

But the rest of the world could also benefit immensely. We quite frequently hear about the need for a sovereign debt restructuring mechanism, SDRM. If such mechanism started by clearly establishing the fact that most odious debts have its origins in odious credits. There often is prohibition against usury, but even more important for all us citizens all around the world, and especially for those generations of citizens coming after us, to have some sort of mechanism that disincentive the award of odious credits to governments.

In reference to that I am begging Venezuela’s National Assembly to request that Venezuela’s Supreme Court of Justice in exile initiates a process destined to carefully revise the origin of all Venezuela’s credits to see if they can be deemed legitimate or not.

https://perkurowski.blogspot.com/2014/05/risk-premiums-and-ethic-ratings.html

@PerKurowski

As a bare minimum the real Venezuela should now create a Recovery Inc., to get back what’s been stolen from it.

Sir, I read John Paul Rathbone’s and Shawn Donnan’s “Markets urged to prepare as IMF weighs exceptional Venezuela rescue” October 17. Sadly it misses some important points.

Suppose that there is a new government… because with the current one there is nothing to be done, there should be nothing to be done.

Then you can initiate a worldwide recovery effort of what was stolen from Venezuela and that could, should, yield let us estimate at least $50bn, and that after the bounty hunters or whistleblowers have been paid their commissions.

If you stop giving away gas in Venezuela, something I am trying for the World Bank or the IMF to declare as a punishable economic crime against humanity, then you would release, in a sustainable way, billions in resources year after year. Look at it this way, Venezuela sells gas (petrol) at less than $1 cent per gallon, Norway sells it at $2.07 a gallon.

Also, just clearing the air of the current bandits, would release the energies of at least a million of Venezuelans full of initiatives that are dreaming of returning to their country.

And, if there is not a new government, then an exiled government, like De Gaulle’s French government in London during World War II, and which counts with a legitimate National Assembly, and a legitimate Supreme Court (in exile), could, should, at least get going with Venezuela’s Recovery Inc.

Of course, at the end of the day, the oil revenues must begin to be shared out directly to all Venezuelans, instead of being manipulated by the chiefs of turn, because a tragedy in waiting like Venezuela’s current one, should never be permitted to happen again. 

http://radicaldelmedio.blogspot.com/2009/10/recuperadora-inc.html

https://perkurowski.blogspot.com/2017/10/world-bank-please-dare-tackle-issue-of.html

https://www.carnegiecouncil.org/publications/archive/policy_innovations/commentary/000083

@PerKurowski

Any jury, given the facts on how Venezuela works, would in seconds, unanimously condemn Mr. Mauro Libi for corruption.

Sir, John Paul Rathbone writes: “As protests and violence engulf Caracas, the country is beset by shortages and endemic corruption. Amid the chaos, Mauro Libi has built a huge food business empire but his critics want to know how.” “Profits from empty shelves” FT, Big Read, Venezuela, July 14.

His critics want to know how? In a country in which a government centralizes 97% of all export revenues, and foreign currency is thereafter allotted not by free market operations but by mechanisms that require the approval of individual government bureaucrats, can there be any doubt that the fortune Libi derives from imports of food to Venezuela, as described by Rathbone, can be anything but the result of corruption?

FT, I am sure you would not dare try to justify any other possibility, and this even if the only consequence you could suffer from it was being laughed at?

Rathbone writes: “Mr Libi’s story, as he tells it, is of a resourceful businessman working against the odds… He even claims to be exporting oatmeal to the US”

Those readers of papers like FT, who can read statements like that, and do not feel like vomiting, prove themselves to be intellectual and immoral accomplices of the death of the many Venezuelans who are suffering from lack of foods and medicines. 

Western civilization world, if something like Venezuela happened in your country, would you like the world to behave as indifferent as you do?

Western civilization, “We did not know” might have worked previously, but is nowadays a completely unacceptable excuse.

@PerKurowski

How does the social sanctioning of Maduro’s financiers compare to that of Trump’s bad taste Joe/Mika tweet?

Sir, John Paul Rathbone in reference to the helicopter event in Venezuela writes: in “a plot twist barely worthy of a B-movie… whatever actually happened, one thing is clear: Mr Maduro, nearly half of whose cabinet members are generals, now has an excuse to repress more.” “Venezuela’s B-movie drama is moving from farce into tragedy” June 30.

Really, is that an excuse? Really, do you think anyone declaring: “If we cannot win with votes we will win with weapons” (which is what Maduro really said) need an excuse?

Sir, and let us be more precise. Venezuela moved from farce (if ever it was a farce) to tragedy a long time ago. Just ask the 2 million, out of 32, who had already have had to migrate to foreign lands, abandoning friends and family.

There is currently an incredible amount of social sanctioning of Donald Trump because of his “Psycho Joe” – “Crazy Mika” tweet. Rightly so, but Trump’s bad taste tweet represented no crime against humanity and, when compared to Venezuela’s Nicolas Maduro, he is clearly more of a Church Boy.

So, comparatively speaking there has been extraordinary little sanction of those who, incapable of resisting juicy margins, finance the Maduro government, like Goldman Sachs. For instance, how many have closed out their accounts at Goldman Sachs or how many have disinvited Lloyd Blankfein from a social event?

Sir, when an elite becomes incapable of sanctioning one of its own, reality will come back and bite it.

PS. Watching my inbox fill up with solicitations of donations in order to fight Trump, every time he puts his foot in the mouth, which should indicate these mess-ups are strong motivators, indicates some could have a deep love-hate relationship with him.

PS. Goldman Sachs, Lloyd Blankfein. Want to see how your client Maduro teargasses young Venezuelans in a closed truck?

@PerKurowski

Hugo Chavez did not empower the poor, he empowered himself with the poor… pas la même chose

Sir, John Paul Rathbone refers to Hugo Chávez of Venezuela as a “gifted politician who, however wasteful, empowered the poor” “Nicolás Maduro Venezuela’s leftist lord of misrule” May 21.

What? Chávez might have been a gifted populist, a gifted demagogue, but he did not empower the poor, he empowered himself with the poor... pas la même chose. Just look at photos of the poor in Venezuela… do they really seem empowered?

The poor of Venezuela never got more than about15 percent of what should have been their fair per-capita share of the fantastic oil revenues that drowned the country during the Chavez years. It was just that Chávez masterfully talked and walked the leftist discourse. Which caused so many in the world to drool in admiration.

If we are going to understand how nations develop, all research needs to control for how much of fiscal revenues are received directly from citizens, how much are received indirectly from citizens, and how many of those revenues have never ever passed through a citizens pocket. But why is such research not conducted? You tell me! I advance the possibility there are just too much profits to be made redistributing.

For instance for decades I have begged that the net oil revenues of Venezuela should be distributed directly to the citizens, a sort of variable universal basic income; but the opposition to such idea from those who want more than their fair share is immense.

As for Maduro, before I was censored in Venezuela, in May 2013 I wrote “3 years until the recall referendum… Mamma Mia!” It was crystal clear from the very start that Maduro would be an unqualified disaster.

@PerKurowski ©

The Latin America left is just a self-serving myth… and I am not so sure of much of the rest of the left either.

Sir, John Paul Rathbone, when referring to Latin America’s “limp” response “to growing Venezuelan authoritarianism and repression, writes” “This is solidarity gone too far, especially from fellow leftist governments.” “Leaders of the left should force Caracas to face the music” June 10.

In Latin America there are no leftist governments, there are just politicians pragmatically using the leftist agendas, in order to put themselves into power for furthering their own interests. Just look at Venezuela. A country in which just gas (petrol) and cheap foreign exchange for travelling abroad giveaways represents more than what is invested in all social programs put together. What has that to do with left… or with right policies for that matter?

No, the Latin America left is just a self-serving myth, and there are indeed many making good money promoting that myth. And the number of willing buyers of that nonsense in Europe and in the US, would seem to imply that perhaps much of what is supposedly left is not really left even there.

But that said much of the right is not that right either. In fact much, perhaps most, of the current left vs. right debates, remind us of boxers spitting out at each other, looking to increase the amount of money to be split between them and the promoters for the next fights… and of the so many dumb enough to buy and love the fake shows.

@PerKurowski

When does a subsidy become an outright gift? Hugo Chavez committed an odious economic-policy crime against humanity.

Sir I refer to Andres Schipani’s and John Paul Rathbone’s “Oil’s slide forces Venezuela to rethink subsidies agreed in Chávez glory days” January 15.

The article refers to “About 600,000 bpd of subsidized oil are consumed locally” but, since the local price of gas (petrol) is much less than 1-euro cent per liter, I would consider that to be much more of an outright gift than a subsidy.

The fact that Hugo Chavez gave away more value in gas (petrol) to those who drove cars, than what he spent on all his social programs put together, might be embarrassing for all those on the left for whom Chavez was a hero… but the truth is that, doing so, he committed an odious economic-policy crime against humanity.

If Venezuela defaults, two have tangoed, an incompetent government and highly irresponsible lenders.

Sir, I refer to John Paul Rathbone’s “Call for default underscores Venezuelan incompetence” September 8.

In it Rathbone analyses Ricardo Hausmann’s and Miguel Angel Santos’ recent “Should Venezuela default?” where they so correctly argue that Venezuela’s government, though being current on its debt service, has already de facto defaulted in so many ways on “its people”, something which signals a “moral bankruptcy”.

Venezuela’s government has clearly shown absolute incompetence, the highest disdain for Venezuela’s constitution and for instance, according to Human Right Watch, has also committed crimes against humanity. And facts like gasoline-petrol being given away at US$ 1 cent per gallon, 278 times less than the price of milk… makes all of the above as evident as can be.

But, let it us be very clear, all equally points to highly irresponsible lenders who do not care one iota, as long as the price, the risk-premiums, are right.

Rathbone reminds us that “Venezuelan bond yield on average 12.3 percentage points more than US treasury”. Let us then suppose a bond issue yielding 20% that is going to finance the building of some concentration camps. Where do you draw the line on what is morally admissive lending? Where do you draw the line on what kind of intermediation fine reputable investment banks can do before they become morally repulsive?

As I have been arguing for some time, anyone investing in a bond that (when rates are as low as the current) pay for instance 4% more than the risk free rate, should know he is buying morally questionable pre-defaulted bonds… and that he must renounce to the possibility of having the cake and eat it too, meaning aspiring to get 100% of risk premiums and 100% of principal.

As a Venezuelan citizen let me also remind all that currently the government receives directly 97 percent of all the nation’s exports and, while so, as I see it, has no right to take on any debt whatsoever.

PS. During the Venezuelan default in the 80s I asked a foreign banker “How come you lent especially much to this entity that is emblematic of all non-transparency, corruption and mismanagement in Venezuela?” His answer was: “At the end of the day it is all going to be government debt, and this entity pays the highest interest rates”. I felt like slapping his face, I wish I had!

What so hard to understand about Venezuela´s woes?

Sir, John Paul Rathbone writes “For many outsiders and for many insiders too, Venezuela is maddening hard to understand”, “Latin America´s trust-fund kid needs a reality check” May 16.

What is so hard to understand about that? When an oil income that should represent a monthly check of about US$ 200 for each of the 29 million Venezuelans, is handed over to a trustee who acts as it was his income and decides with some very few assistants on what to do with all of it, something is bound to go wrong.

Or does he imply that Obama, Cameron or Merkel would be able to efficiently decide upon the use of over 97 percent of all USA´s, UK´s or Germany´s exports? Or that their respective democracies would remain the same if concentrating so much power in their hands? I don´t think so!

What is truly hard to understand though, to the point of being surrealistic, is how they insist in that changing the trustee will do it, and not in changing the system, by handing each Venezuelan their God sent natural resource dividend.

To find a solution to Venezuela, you have to be clear about its problem.

Sir, John Paul Rathbone, Andres Schipani and Mark Frank write “Venezuela: In search of a solution” March 3.

I am sorry, that neither Venezuela nor your reporters can identify the real problem, just shows how hard it is to develop a solution to its problems.

Let me just ask… what would you believe the real problem of the Britain would be, if your government was receiving, as income, to dispose of in any way it liked, over 98 percent of Britain’s exports?