[Cincinatus' Wife]

Brazil - The communists take a large and important country *** And now we come to the final phase of Brazil's descent into communism. It is necessary to clearly show the direction of Brazil's revolution. This cannot be an easy job because most people ignore what communism really is. They do not understand its tendencies. They do not recognize its many faces, its strategies, its dialectic, its directions and misdirections. Another thing that obstructs our understanding is the leftist hegemony in the Brazilian media, prettifying the red monster while ignoring vital information. But once we learn what communism is and how it operates, it is easy to understand the red revolution in Brazil.***

[Cincinatus' Wife]

New Venezuela `oil show' makes Houston debut*** We could brush off Venezuela's travails as yet another internal strife in a much tormented oil producing country with an endemic history of corruption and ineptitude. But this is too close to home, with Venezuela's oil playing a huge role on the U.S. energy security and a direct linkage with our gasoline prices. Venezuela is the largest exporter of refined products to the United States and holds a significant position in U.S. domestic refining capacity. PDVSA also owns Citgo, one of the largest retailers of gasoline in this country. What has been going on in Venezuelan oil production the last few months?

After a devastating and permanent removal from the market of at least 250 million barrels during the strike, the country's oil production is now about 2.6 million barrels a day, compared with 3.4 million before the PDVSA strike. This partial rebound is misleading because 1 million barrels a day comes from foreign company "associations" in Venezuela and 800,000 barrels a day come from the giant North Monagas and El Furrial fields. These fields are now being produced at full throttle with many technical questions as to the long-term damage that this overproduction may cause. Decapitation of the engineering staff has led to a big drop in production from the more challenging fields. Such a decline will accelerate further and will become devastating next year and thereafter. It is not just the dearth of know-how; there will be no money to reinvest.

PDVSA today has the largest debt in its history. Service companies, oil carriers and suppliers are now owed probably $3 billion to $5 billion, accumulated over the last five months. Coupled with the fact that the Exim Bank has eliminated all credit guarantees for Venezuela and Chavez's own debt to his constituents, whose bribing will have to be manifested in increased welfare spending and giveaways, point toward a very turbulent time ahead. It will be interesting and somewhat breathtaking to watch the "show" by the new PDVSA delegation this week in Houston. ***