Chavez Says He ‘Revalued’ Bolivar With Parallel Gains

[Judi Lynn]

Source: Bloomberg

Chavez Says He ‘Revalued’ Bolivar With Parallel Gains (Update1)
By Daniel Cancel

Jan. 15 (Bloomberg) -- Venezuelan President Hugo Chavez said that he has “revalued” the country’s currency, not devalued it, after strengthening the value of the bolivar 10 percent in the so-called parallel market since announcing the first devaluation in 5 years.

Chavez said that the government will strengthen the parallel rate to 4.3 per dollar as part of a “strong intervention” by the central bank by selling dollars to the local market to meet demand for foreign currency. The bolivar traded at 5.87 today, traders said.

Chavez devalued the bolivar as much as 50 percent on Jan. 8 and implemented a multi-tiered exchange system to prevent dollar outflows and close a growing budget deficit. Imports deemed essential goods will receive an exchange rate of 2.6 bolivars per dollar and nonessential goods will receive 4.3 per dollar.

“If we take into account that the majority of prices were set at the parallel market and we’re now going to strongly intervene in that market, a lot of prices should actually go down,” he said during a speech to announce the government’s achievements of 2009. “From that point of view, we’ve actually revalued the bolivar, a true revaluing of the currency, not devaluation.”

Read more: http://www.bloomberg.com/apps/news?pid=20601086&sid=aqHZhC_tDyaE

[DissedByBush]

1. Now that's some spin

He must be in serious trouble domestically.

[dipsydoodle]

2. Don't believe everything you think.

.

[denem]

3. Snr. Chavez, meet Mr. Orwell.

Choco rations went up last week.

I know you are a strong advocate, Judi, but really, why post this doublethink?

Our devaluation was really a revaluation. Say what?

"Parallel Gains" is classic doublespeak.

2 + 2 = Fore! Ahole in one.

[zeemike]

4. sorry but that is not doublespeak or doublethink.

you need to re read Orwell.
And in fact in doublespeak the concept of "parallel gains" could not be expressed at all.

[denem]

7. NewSpeak is not doublespeak

I'm not sure re reading Orwell would do either of us any good.

[zeemike]

19. I agree it would not.

And i do know that doublespeak is not in the book but has been used to refer to it.
But it has been used in place of a lie by present day commentators.

[DissedByBush]

10. The devaluation was doublethink

Doublethink is best expressed by "blackwhite." Black is white, white is black, whenever the party needs it to be that way. The party doesn't just say blackwhite, the people believe blackwhite, once white is called black they can't remember when white was white -- it's always been black.

Calling the devaluation a "reevaluation" and expecting everybody to believe it is a good example of doublethink.

[denem]

18. OMG - Someone who comprehends Orwell's

linguistic scalpel in 1984. BlackWhite is the equivalent of 2 + 2 = 5, an affront to logic that leaves only doctrine. A doctrine that can be changed at will.

Parallel Gains means The Black Market (the actual value of the Bolivar) is the White Market. And the two or three different White Markets are good because they are not Black exchange.

No one loses.
BlackWhite
QED

[zeemike]

20. Yes Doublethink is the problem

But devaluation or inflation is a part of reevaluation and so there are clear ideas there....something newspeak and doublethink sought to eliminate.

[Peace Patriot]

5. The devaluation was a positive move. The S&P Index upgraded Venezuela because of it.

It was necessary and long expected, and it was voluntary. It is furthermore an indication of confidence on the part of the Chavez government's finance managers that, coming off of a period of sustained, sizzling economic growth, 2003-2008, with low debt, high cash reserves, a good credit rating and great progress in social programs, Venezuela can recover quickly from the worldwide, Bushwhack-induced depression. Venezuela is in good shape, as are its closest Bolivarian allies, Bolivia and Ecuador. Bolivia--once the basketcase of the western hemisphere--is in spectacular shape, also due to Bolivarian policies: democratic inclusiveness, strong commitment to human and civil rights, spreading the wealth, bootstrapping the poor, controlling the exploitation of natural resources to benefit the country, and strong leftist government opposed to radical corpo-fascist looting such as we have seen in the U.S. and such as the U.S. seeks to inflict on Latin America ("free trade for the rich," and banksters run wild).

U.S. corporate rulers and war profiteers, and their echo chamber--the corpo-fascist press--demonize these governments not because their policies are bad for their countries, but because their policies are good for their countries and bad for our corporate rulers and war profiteers. (All three countries have also evicted the failed, corrupt, murderous U.S. "war on drugs" because it is used as a means to militarize, spy on and control other countries--and, in the case of Colombia, to prop up a dreadful fascist government.)

Venezuela and its people have led the way in the vast leftist democracy movement that has swept Latin America, beginning with their awesome overturning of the U.S.-supported fascist military coup in 2002. So they are the most demonized of all. Anything at all goes wrong in Venezuela--or can be construed as going wrong--and it will be headlined in the U.S. (and by the corpo-fascist 'news' monopolies in Latin America as well). The rather amazing accomplishments of the Chavez government are NEVER mentioned. I just read one of many similar statistics* that really jumped out at me: The Chavez government has achieved a 40% increase in high school and higher education enrollment. Just think what that means to the future of Venezuela! Venezuela may have a high murder rate (because Venezuelans are gun lovers and Chavez is not a "dictator"); they may have inflation (the inevitable result of spectacular growth); they may still have a food security problem (despite a well thought out land reform program)--but they have invested in their people and that, as with FDR's "New Deal," is the most important thing to know about them. But try to find one mention of achievements like that in the corpo-fascist press!

*(Analysis of Venezuela's economy to 2008) http://www.cepr.net/documents/publications/venezuela-2009-02.pdf
(Analysis of Venezuela's economy to 2009) http://www.cepr.net/documents/publications/venezuela_update_2008_02.pdf
(Additional analysis of Latin America) http://ideas.repec.org/e/pwe148.html

"S&P revises Venezuela's outlook to stable from negative"
http://www.reuters.com/article/idUSWNA167520100111?type=marketsNews

"Venezuela devaluation boosts bonds; consumers worry"
http://www.guardian.co.uk/business/feedarticle/8894244
(Interesting article--hostile but can't help reporting the positive aspects of the devaluation; funny to have upper middle class consumers, fat with cash, purchasing HD screens and other goodies in a panic--and criticizing Chavez!)

[naaman fletcher]

8. Ha Ha..

Sure, positive for rich creditors, terrible for any worker who had a small savings which are now with 50% less.

Aren't you supposed to be for the working man? He is the one who got screwed here, as all the other news stories attest.

But Chavez wear's a red beret, so you think he can do no wrong.

[Peace Patriot]

22. Yeah, well, others say he devalued the bolivar to "buy votes" in the upcoming by-elections--

that it will fill government coffers with money to dole out in social programs.

The truth is that the Chavez government devalued the bolivar despite any impact on their political fortunes, because it was the right thing to do. If they have to inflict some pain, so be it. If it fattens government coffers, so be it. The stability of the economy in the long run is what is important. They've been very good money managers to this point--going into the Bushwhack-induced depression with low debt, good credit, high cash reserves and strong positives, such as low unemployment (about 7%, that's very low for Latin America), poverty cut in half, and quite amazing social indicators, such as the 45% increase in high school and higher education enrollment. It was time to take this long needed, and long anticipated, measure.

They have made some good bets--for instance, on higher oil prices than they budgeted for and higher economic growth. They lowballed the budget. That will help with any impacts from devaluation.

Chavez "wearing a red beret" does not excuse him from responsibility for the whole country and its economy. And Venezuelans have never had a government that has been so pro-worker and so pro-ordinary people--never in their history. You pick out one action and one stat and hold it up against 10 years of achievements on behalf of workers and the poor, including five straight years of spectacular, worker-friendly economic growth, massive job creation, very low unemployment, good wages, pensions, help to the neediest people, and strong commitments to education and human rights. I think it's pretty impressive that they risked devaluation with an election coming up. What would you have had them do? Put it off again? And then what happens, when it got the point of a forced devaluation? No, they did the right thing--a voluntary devaluation, scaled to impact luxury imports rather than basic necessities, just as their low debt, high cash reserves, etc., are beginning to pay off with a quicker recovery than most countries. They had cushioned Venezuela from Bushwhack "shock"; they can afford to devalue the bolivar now. The Venezuelan government owned oil company just paid off ALL of its debts. They are looking good.

[wayne fontes]

11. Bolivia's economy, it's real and it's spectacular

Venezuela is in good shape, as are its closest Bolivarian allies, Bolivia and Ecuador. Bolivia--once the basketcase of the western hemisphere--is in spectacular shape, also due to Bolivarian policies: democratic inclusiveness, strong commitment to human and civil rights, spreading the wealth, bootstrapping the poor, controlling the exploitation of natural resources to benefit the country, and strong leftist government opposed to radical corpo-fascist looting such as we have seen in the U.S. and such as the U.S. seeks to inflict on Latin America ("free trade for the rich," and banksters run wild).

Bolivia's economy ranks 147th in the world (2008) with a per capita GDP of $4,500. It's an abuse of the English language and Terri Hatcher's contribution to American culture to call that low level of economic development "spectacular".

[Judi Lynn]

12. Subsidies to Poor, Key to Bolivia’s Stable Economy

Subsidies to Poor, Key to Bolivia’s Stable Economy
(Reuters) By Eduardo Garcia and Edited By Padraic Cassidy
October 1, 2009
LA PAZ, Bolivia Oct. 1 (Reuters) – Bolivia’s economy is healthy despite the global slump because leftist President Evo Morales is redistributing soaring state revenue as subsidies to the poor, the country’s finance minister told Reuters on Thursday.

The Bolivian economy grew 3.2 percent in the first six months of this year, despite lower export income for natural gas, which is key to the Andean country’s economy.

The International Monetary Fund says Bolivia is likely to post the highest growth in gross domestic product, in Latin America at 2.8 percent.
Finance Minister Luis Alberto Arce is even more optimistic. He expects GDP to grow 4 percent this year, largely because Morales has handed out money to the country’s poor majority, which is boosting their spending.

“Our policy was to make the cake bigger for Bolivians with the nationalization policies, to increase state revenue. Our second policy was to divide the cake better in order to give more to those who have less,” said Arce.

Arce said the subsidies are the “small engine of growth” that has allowed Bolivia’s economy to grow despite lower export revenue caused by drops in demand and prices for natural gas.

Moody’s Investors Service and Fitch Ratings upgraded Bolivia’s credit ratings last month, citing the country’s good macroeconomic performance.

But they noted that years of above-trend growth, the benefits of external debt forgiveness, limited foreign banking interests in the Andean nation and the absence of bad debts prevalent in developed markets helped Bolivia to avoid a direct fallout from the global crisis.

CASH FOR THE POOR

Morales, an Aymara Indian from a poor background who took office in 2006, has increased taxes on foreign investors and has nationalized energy, mining and telecommunications firms.

State revenue from the key natural gas sector boomed to $2.65 billion last year, from just over $1 billion in 2005, and revenue from the mining sector increased fourfold in the same period to $128.1 million.

The country’s foreign reserves have rocketed to around $8.5 billion from $1.7 billion at the end of 2005.

Morales’ government is spending some $320 million a year in grants to encourage parents to keep their children in school, in pensions for the elderly and in cash handouts to persuade pregnant women and mothers to go through health checks.

Earlier this year the government said that in 2008 nearly 2.4 million Bolivians received cash subsidies, roughly 25 percent of the country’s population.

That is on top of the nearly $200 million donated by Morales’ main Latin American ally, Venezuelan President Hugo Chavez, that Morales has spent in hundreds of small education, sports and health projects since 2006.

Although critics have said the government is giving subsidies to buy support from poor Bolivians, Arce says the stipends are a good way to redistribute wealth.

“These are policies to redistribute income … tomorrow when the poor of today are no longer poor, of course we’re going to have to stop giving this support,” Arce said.

But the economist said that the government is likely to continue giving subsidies in the medium term because they stabilize the country.

“We can’t stop … because it’s something that brings social stability. Social conflicts have decreased greatly with our government because we’re solving the social problems that people have,” Arce said.

Before Morales took office, three presidents in three years were forced to step down amid social unrest.

http://www.boliviaun.org/cms/?p=1215

I'm sure there are some who would believe your claims.

http://www.bubbahayseed.com.nyud.net:8090/xSites/Agents/bubbahayseed/Content/UploadedFiles/hayseed_profile.JPG http://www.lat34.com.nyud.net:8090/wp-content/uploads/2009/06/hillbilly.jpg http://scrapetv.com.nyud.net:8090/News/News%20Pages/Business/images-3/redneck-toilet.jpg

[wayne fontes]

14. My "claim" was from the CIA Fact book

If you have a more reliable number post it and explain why it's a more reliable number. As to your post, I'd point out that the governments estimate of a GDP growth of 4% works out to less than $180 per citizen. Less than what Goober #2 would make from one run of that copper still he's leaning on.

Just spectacular growth!

[DissedByBush]

16. BIG difference between Morales and Chavez

Morales is a regular guy from a humble background who wants to do good by the people. The only real problem I have with him is his admiration for the Butcher of La Cabana, Che Guevara. But some people can have selective memories.

Chavez is a power-hungry wanna-be dictator who quashes dissent, buys off voters with his petro-dollars and constantly invokes the bogey-man to keep the people in line. Now that the petro-dollars are dwindling and nobody appears to be invading, Chavez is in a panic as to how he's going to maintain power. He's going to have to manufacture a crisis soon.

Obama's policy of pretty much ignoring Chavez is one of the worst possible things for Chavez. It's genius.

[Festivito]

17. Well done. (Better than all the one-liner posts put together.) Thanks.

Good luck with your work.

[ChangoLoa]

21. The devaluation is just a transfer of money from the people to the state.

It's called a regressive form of tax because it doesn't distinguish between different levels of income. The less money you have, the more you're affected by this measure. The "upper-middles class" Will be the least hurt in this process.

2010 is an electoral year and the administration needs to keep the illusion of the oil shock period level of public spending, but in reality Venezuela is dealing with the recession by applying a restrictive budgetary policy. This is highly pro-cyclic. It's obvious that S&P, J.P Morgan and the IMF are applauding when their doctrine is being applied.

Last thing, the 40% increase in high school and higher education enrollment goes along with a 24% increase in the population. So, normally, you should make it a 16% real increase... am I wrong?

[slackmaster]

6. VISIONARY!

:nuke:

[Odin2005]

9. "We are increasing chocolate rations..."

[Codeine]

13. BB Dayorder 01.08.10 malreported rectify. nt

[unkachuck]

15. K&R....n/t