This is my very first post and probably is too long...if it is, I promise to do better next time.
I was an eyewitness to what happened in Venezuela in 1998 when Hugo Chavez came to power. In February of 1998, many thought the shoo-in winner was the former Miss Venezuela ( who is now governor of Margarita Island).
But as the campaign continued, it became apparent what Chavez and his cadre of workers wearing red berets were going to do. They were going to hijack the election with the politics of fear.
We could have written a script about how it was going to go down. I told people back then that if you liked Fidel Castro, you would love Hugo Chavez. Our diplomats over at Foggy Bottom were asleep at the switch, and their leader committed malpractice every time she opened her mouth.
Chavez is determined to keep the price of oil at $50 or above because the revenue for PDVSA (which is already nationalized, by the way) is a windfall. An old adage in business says that revenue hides a lot of sins.
Chavez uses the money to keep the poor in the country on his side. You ain't seen nothing yet...watch how his land redistribution program moves along.
Interesting that while Chavez likes a close to $50 netback for his oil, he'll have to take less when he sells it to the Red Chinese because of the freight disadvantage. He's also giving up his quality advantage by blending his light and heavy crudes so the Chinese refineries can run his crude. He has virtually walked away from the number one customer for his asphalt: the US shingle and roofing industry. Not very smart.