Chavez threatens Venezuela central bank takeover [Communists Taking Over Venezuelan Money Supply!]

Forbes (Reuters) ^ | 1/7/04 | Pascal Fletcher

[TastyManatees]

Chavez threatens Venezuela central bank takeover
By Pascal Fletcher

CARACAS, Venezuela, Jan 7 (Reuters) - Venezuelan President Hugo Chavez threatened on Wednesday to take over the country's autonomous central bank if it did not agree to his demand to hand over $1 billion in reserves to finance farming projects.

The left-wing populist president has waged a noisy two-month public campaign to pressure the Central Bank of Venezuela (BCV) to free the funds for his government, which has clashed with the bank in the past over economic policies.

Central bank directors have so far resisted the president's repeated public threats, arguing that the country's laws do not allow them to use international reserves to finance the government's current spending.

"Well, we'll see. If the Central Bank of Venezuela has to be taken over, then it will be," Chavez said at a rally in the western oil state of Maracaibo.

As he spoke, around 100 of his supporters demonstrated outside central bank headquarters in Caracas to back his demand for the $1 billion handout to finance food production.

Chavez said it was "illogical and absurd" that the bank should be holding international reserves of more than $21 billion, while the government was spending millions of dollars to import basic food staples like beans, milk and chicken.

He wants to tap the foreign reserves to set up farm cooperatives as part of his self-styled "revolution", and to finance increased food crops in the world's No. 5 oil exporter, which imports around 60 percent of its total consumer needs.

"SABOTAGE"

Chavez accused his political opponents, who are seeking a referendum this year on whether he should stay in office, of backing the central bank in its refusal to free the funds.

Their aim was to "block the country's development, sabotage the government", he said. He has also threatened to appeal to the Supreme Court if the bank does not release the reserves.

The pro-Chavez demonstrators in Caracas set off firecrackers and waved banners calling for government intervention in the central bank. They also draped a large banner of Argentine-Cuban revolutionary legend Ernesto "Che" Guevara over the steps of the bank headquarters.

Chavez's determined campaign has raised fears that he may try to seize complete control of the central bank. It currently enjoys autonomous status but is bound by the constitution to coordinate economic and fiscal policy with the government.

"This money belongs to the people ... the central bank hasn't been helping the country," said Lucy Barquilla, a pro-government farm cooperative leader who took part in the Caracas protest.

Political foes of the president, who has ruled for five years after winning a 1998 election, have accused him of accumulating dictatorial powers by seizing political control of key state bodies and economic institutions.

They point to his firings of more than 18,000 employees of the state oil firm PDVSA after an anti-government strike in December 2002 and January last year. These firings allowed Chavez's government to completely take over and run the strategic company, which had previously enjoyed a large degree of corporate autonomy.

[TastyManatees]

He demands $1 billion, or he will impose a state-takeover. Quite a nice little tactic, if one wants to destroy any pretense of monetary stability, chase out remaining foreign investment, inflate interest rates, annihilate the personal savings of what's left of the middle class...oh, and walk away with a cool $1 billion for free. Chavez can then use the money to reimburse the losses of those who have supported him at the cost of those who haven't. In the meantime, he claims the central bank is purposefully hurting people by "sabotaging" interest rates, and nationalizes them anyways.

Chavez is no amateur, and he has serious backing and experienced cadres from Cuba and elsewhere. Every time he destroys an industry or weakens an opposing institution, he makes it a little easier for his organization to grab some more power. It's too bad no one seems to care that Venezuela is actually going communist.

Tasty Manatees

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[Mo1]

Venezuelan President Hugo Chavez threatened on Wednesday to take over the country's autonomous central bank if it did not agree to his demand to hand over $1 billion in reserves to finance farming projects.

Isn't Chavez the same guy Jimmy Cater bailed out of trouble last year???

[ConservativeMan55]

"CARACAS, Venezuela, Jan 7 (Reuters) - Venezuelan President Hugo Chavez threatened on Wednesday to take over the country's autonomous central bank if it did not agree to his demand to hand over $1 billion in reserves to finance farming projects."

This sounds more and more like our government. How many little pet projects do they have?

[OXENinFLA]

Are we going to bet on how long it takes for Geraldo to show up there?

[ConservativeMan55]

LOL. I haven't seen Geraldo anywhere lately. Is his TV show still on?

[thinktwice]

Communist governments symbolize what I'd call the greatest evil in the world; but communism's moral code is altruism -- the same moral code preached by the world's great religions.

Go figure.

[ConservativeMan55]

Who was it that said

"For the race everything, for the individual nothing."

[Beck_isright]

But don't worry. Because Venezuela is not on the nightly news it's not a problem. Brokaw and Jennings said so.

Of course when Brazil tests a nuke, I'm sure it will at least get a scroll at the bottom of the Fox News ticker.

[ConservativeMan55]

Ohh Ohh...It was mecha that said that!

Cruz Bustamonte's organization.

[thinktwice]

Who was it that said
"For the race everything, for the individual nothing."

That's what altruism is about -- self sacrifice.

Self sacrifice is wonderful when it is an individual's choice, but the incredible evil within enforced "self sacrifice" is amply evident within nations controlled by socialists and communists.

[Gatún(CraigIsaMangoTreeLawyer)]

This kind of news will start a run on all their local banks if it hasn't started already.

[aynrandfreak]

altruism...moral code... sure signs of a Rand fan?

[thinktwice]

Ayn Rand fan?

Yep! Without doubt ... is what Rand is about.

[Arkinsaw]

Yep, Venezuelans will find that a giant hole in the dam will sink all boats.

[RedWhiteBlue]

The megalomaniac has always wanted to encourage foreign investment, but the bottom line is that either he just "doesn't get it" when it comes to understanding what it takes to make that happen, or his motives for attracting foreign investment were disinginuous from the beginning.

I am inclined to believe it is the latter. Case in point: When he was first elected, I worked in the petrochemical industry and attended a conference held on Margarita Island. The government's big program at the time was to attract petrochemical manufacturers to build facilities there. Since Venezuela imports most of their petrochemical consumption and would also be a nice staging point for supplying other parts of South America (logistically and for the sake of paying lower duties), many chemical producers were interested.

I and other representatives from the company for which I worked sat with the President of Pequiven -- the nationalized Petrochemical arm of PDVSA -- and listened to their 10 "rules" that would govern over and "encourage" these foreign investments. They sounded great -- they really did -- until he got to rule #8 or so: "If we decide to nationalize your facility, we will pay you a fair price."

Who in their right mind would go to all the trouble of developing technology, building manufacturing facilities, training people, bringing up and smoothing out operations, establishing logistics and supply chain procedures, and developing an export market, only to turn be forced to turn the business over to a foreign country (who would then become another competitor) at a "fair price?"

Needless to say, they didn't get any takers.

[daviddennis]

The people who are waving those Che banners should visit Cuba for a month and see what a "socialist paradise" is really like. I've been there, and I can report that it's a tourist paradise, but you wouldn't want to live there or emulate their policies.

Chavez is a raving nutter. I wonder what he's counting on (another Ayn Rand echo!) to save his country from collapse.

D

[aynrandfreak]

I hope you haven't had the unfortunate chance to see JohnGalt on here. If Rand were still alive, she'd try to get JimRob to force that guy to change his screen name with his "philosophy"

[livius]

They sounded great -- they really did -- until he got to rule #8 or so: "If we decide to nationalize your facility, we will pay you a fair price."

Drat! Back to the drawing board on that "investor roadshow"!

But seriously, I think this has been Chavez' plan all along. There was a very disturbing article in the Wall Street Journal today about unrest in Bolivia, and it was noted that the fine hand of Hugo Chavez is appearing in that one, too.

Ping to CW.

[thinktwice]

Hank Kerchief is a pretty good Ayn Rand poster on FreeRepublic.com. He and I had some good threads going in the past year.