A New York investment bank bought bonds from the Venezuelan central bank at a steep discount and got a lot of heat for doing so. The military is applying more violence to protesters as support from the rank and file appears to be shrinking.
5/30 – Wall Street Journal – Goldman Sachs Under Fire for Venezuela Bond Deal– Goldman bought $2.8B of bonds issued by the government-owned oil company for $865M. That is 31% of face. If, and this is a big if, the bonds were to be paid in full, on-time, at face value that would produce a 40% return.
Goldman is in a PR mess because the bonds were held by the Venezuelan central bank, meaning Goldman essentially put almost a billion dollars into the government’s hand.
Article says Goldman has been increasing their holdings of Venezuelan debt over the last few months. Their play is that if government gets its finances in order, the bonds will soar in value and Goldman will make a huge profit.
Those of us living in the United States are blessed with religious freedom, political freedom, and economic freedom because those who went before us fought for freedom.
Many of those fighting offered up their life for freedom and the offer was accepted.
I am humbled and grateful to God that some of my ancestors are included in the long list of those who fought. I am especially humbled that a great, great grand-uncle is in the list of those who died in the defense of freedom.
Because of their sacrifice, I get to enjoy this kind of freedom:
Consequence of intentional government policies in Venezuela. Image courtesy of Adobe Stock.
A one-year old child who weighs 11 pounds.
Eleven.
In what used to be the regions’s richest country, the average weight loss in the last year is 19 pounds.
That’s an average weight loss according to a survey by social scientists measuring the impact Venezuelan government policies are having on the citizens of the country.
It is called the ‘Maduro diet’ in dishonor of the president who is gladly continuing the polices that have broken the once rich nation.
It is a common site to see people picking through trash hoping to find something that is edible.
When will those of us who don’t have to decide which of our children get to eat today start calling the expected results of intentional policies a crime against humanity?
Let’s take a quick look at health care in Venezuela before returning to the starvation issue.
In Venezuela, that sign is needed at hospital pharmacies, bakeries, and now at gasoline stations. Image Courtesy of Adobe Stock.
The shortages and suffering in Venezuela continues. Your homework for the day: what economic system provides this level of suffering?
Foreign reserves are shrinking
Bakeries threatened if they bake too many sweets and not enough price-controlled bread
Pregnant women are leaving the country to deliver their babies
Gasoline shortages appear
3/1/17 – CNN Money – Venezuela is down to its last $10 billion – The country’s foreign reserves are down to $10.5B, from $20B in 2015, and $30B in 2011. That info in sourced to the Central Bank of Venezuela.
Article says inflation is expected to hit 1660% this year and 2880% in 2018.
3/13 – PanamPost – Venezuelan Regime Threatens to Expropriate Bakeries, Jeopardizing Bread– In addition to price controls and currency controls, the government is going to impose output requirements on bakeries. If they don’t produce bread all day at the government limited price, they are subject to take over by the government. Left out of their miscalculation is that the government has stopped importing wheat flour.
If bakeries don’t bake enough bread, the government will close the shops.
That little ol’ thing, along with 500 similar contraptions, is changing the world of oil production. Photo by James Ulvog.
Looks like we are in the midst of radical change in regional and world politics caused by the technological revolution in oil and gas production. I keep trying to wrap my little brain around what is going on. Here are a few articles that may stretch your brain too.
Brain stretcher on the shift in geopolitics due to increased US oil production
Speculation why the Saudi government’s plan to re-engineer their country’s economy isn’t going to work
Three articles on the rapidly increased US shale production undercutting the OPEC production cut
3/12/17 – PJ Media – The Problem of Success– Article raises the unsettling idea that nobody has figured out the impact of dramatically increased production in the US.
Neither the previous US administration, the current US administration, leadership in Saudi Arabia, leadership elsewhere in the Middle East, nor even pundits for that matter, have figured out how geopolitics will change as Saudi Arabia loses its role as dominant oil producer and the decentralized American drillers gain the swing producer role.
It stretches my brain even to understand there is an issue.
American frackers used the dramatic run up in oil prices to $100 as an opportunity to figure out how to frack oil where it could never have been touched before. They then used the collapse in prices as an opportunity to figure out how to frack far more efficiently, far more effectively, with far higher production output from every well. As a result, the break-even price for U.S. shale has shrunk.
The vast network of independent producers are responding to price changes far faster than OPEC could handle or the majors could ever dream of. Prices go up somewhat and in about three months US production is surging.
Several intriguing articles on military forces using technology:
ISIS using larger drones with larger payloads
Marine Corps wants to experiment with giving an entire battalion suppressors for all their weapons
Pakistan developing second strike capability by putting nuke loaded cruise missiles on diesel subs
Lots of jobs in the US military will be replaced by robots
2/21 – Washington Post – Use of weaponized drones by ISIS spurs terrorism fears– In Iraq, Islamic State is working with drones above the quadcopter size. With wingspans of about 6 feet, the drone can carry a mortar round at about three pounds instead of a hand grenade.
IS has posted videos of multiple uses of the drones to drop explosives. The frequency of offensive use of the drones is high enough that Iraqi troops must scan the scansky for drones and take cover when one is spotted.
Captured documents indicate IS is doing research to develop new drones and modify off-the-shelf versions.
This is a significant step up from my previous discussion of ISIS’ drone usage. On January 30, I mentioned:
Liftoff of CRS-10 mission. Nice view of Falcon 9, Dragon capsule, and location of solar arrays on third stage. Credit Flickr. Courtesy of SpaceX who has placed their photos in the public domain.
The wide open frontier of space exploration fascinates me:
An asteroid 124 miles in diameter is richer in minerals that what we have here on earth – picture the value of those resources for building space ships in space
Five teams from the private sector are in the race to get a team on the moon
ULA trimming work force – trying to gain price competitiveness?
The underlying substance is of interest. NASA has a 2023 launch scheduled for a probe that will check out asteroid Psyche, which is sitting in the asteroid belt between Mars and Jupiter. It is about 200 kilometers across, or about 124 miles in diameter.
Asteroid Psyche is rich in minerals. How rich? If it all could be brought back to earth and sold at current market prices, it might have something in the range of $10,000 quadrillion of minerals. This is compared to a world economy with $73.7 trillion of production.
Shipwreck standing on the beach with the sea in the background. Margarita Island. Venezuela. Photo courtesy of DollarPhotoClub.com
Still more indications the humanitarian crisis continues to deepen:
People killing wild animals just to get a little meat on the table
Government can’t even issue passports
Use the “Maduro diet”, lose 19 pounds in a year
2/10 – Fox News – Venezuelans killing flamingos and anteaters to stave off hunger amid mounting food crisis – Researchers for a university have found 20 flamingo carcasses, each with the breast meat and torso removed. Carcasses of dogs, cats, donkeys, and giant anteaters have been discovered at city dumps. That illustrates the desperation so many people experience in trying to find meet for their diet.
Experts point out those wild animals can carry lots of little nasties that can hurt humans.
Article explains the severity of inflation by providing some data points. Here is what you can buy for half of the minimum wage for an entire month:
Successful recovery of Falcon 9 booster during CRS-10 mission. Credit Flickr. Courtesy of SpaceX who has placed their photos in the public domain.
Just watched the recovery of a Falcon 9 booster. I missed the launch. Very cool video from the on-board camera as the booster descended through a cloud bank and landed dead center on the pad.
This mission, CRS-10, will deliver over 5,000 pounds of supplies to the International Space Station. Two really cool things. First, a private company providing supply runs to ISS is a thing. Second, it is almost routine to recover the first stage.
Liftoff of Falcon 9 and Dragon capsule on CRS-10 mission. Credit Flickr. Courtesy of SpaceX who has placed their photos in the public domain.
Concept drawing of vehicles SpaceX plans to use for trips to Mars. Tanker is sitting at left ready to be added to booster upon its return. Credit: Flickr, SpaceX has placed this in public domain.
SpaceX is planning to use the above equipment to get to Mars, while NASA is planning to recreate the early accomplishments of this equipment:
Apollo capsule. Image courtesy of Adobe Stock.
Consider the contrast between the following two reports.
In the private sector, scientists are working to figure out how to set up an infrastructure to support asteroid mining.
At NASA, scientists are working to repeat the mid-60s task of getting a crewed spaceship out far enough to loop around the moon; not land on the moon, just fly around it. In other words merely repeat part of what they did fifty years ago.
On the same day, four different courts around the country released identical rulings saying the signatures gathered for the recall were invalid. Four courts. Same day. Identical rulings.
The election board said the referendum was off because the signatures were invalid.
Many of the opposition concluded that means they are living in a complete dictatorship.
More on the ongoing human tragedy that is the result of intentional government policies in Venezuela:
Infant mortality is soaring
Government starts to let go a bit on the widespread price controls. Unexpectedly, food reappears on the shelves when priced at realistic prices
State owned oil company is losing ability to pump oil
Government suspends the recall effort, which leads to…
Lawmakers start impeachment effort
This is going to get far worse before the massive suffering ends.
10/17 – Wall Street Journal – Infant Mortality Soars in Venezuela – The infant mortality rate is soaring so far and so fast that doctors and hospitals are under pressure not to release any data because it reveals the depths of the human suffering in play.
Infant mortality is defined as the number of babies that die before their first birthday. Here is the infant morality rate, expressed in infant deaths per 1,000 live births:
