The Weimar Republic of Venezuela

147
Fri, Jun 3, 2016 - 7:24pm

“LOOK EVERYONE! GORILLA SHOOTING!” You may have seen the biggest story of the entire year, maybe the biggest story of modern times, play out over the last week when Harambe the Gorilla was shot and killed at the Cincinnati zoo after a child fell into its enclosure and the beast began dragging the boy around. Television, newspapers, and major media outlets from across the world descended as the story nearly broke the internet. Should they have shot it? What kind of savages shoot an innocent animal? What kind of savages care so little for a boy’s life? Who will be charged? Why are people being charged at all? Why aren’t the parents being prosecuted? Who should pay for this outrage? Is it an outrage? Why are you outraged? Why aren’t YOU outraged?

Meanwhile, in this same western hemisphere, a nation that just two generations ago was the wealthiest country per-capita in all of South America is now suffering a catastrophic economic collapse and hyperinflationary event, to a near mainstream media blackout punctuated by occasional, drive-by articles that are largely misleading. Virtually the only in-depth, ongoing coverage of this catastrophe has been on the internet, mostly in the alternative media.

In 1970, Venezuela was not only the richest country in Latin America, it was one of the twenty richest countries in the entire world, with a per capita GDP higher than Spain, Greece, and Israel and only 13% lower than that of the United Kingdom.

My wife’s Nicaraguan Godfather, an extremely well-traveled man, still speaks with awe of how when he was young, the ordinary Venezuelan middle class would fly to Miami several times a year for vacations as a standard way of living. It was nice, cheap to them given the exchange rate at the time, and the hotel staff spoke Spanish! Possessing astounding natural resources, Venezuela is not only the “Saudi Arabia of the Americas” as it sits upon famously vast oil reserves, it also has an exceptional growing season, fertile soils, and rich deposits of everything from gold to bauxite to aluminum. And yet this country, arguably blessed with the greatest concentration of natural wealth per square mile of any country in the Americas, is literally starving to death at this very moment. People are hunting and killing stray dogs and cats in the streets just to survive, and even pigeons are being hunted for food. Exactly as people did during the Weimar Republic hyperinflationary event of 1921-1923, shortages of food are now so endemic throughout the country that standing in long lines, waiting and hoping that food will be delivered to your store and that you can buy it quickly before the currency depreciates even more, has become a way of life.

For sound money advocates, precious metals investors, or the good folks at TFMR (most of whom have read the classic When Money Dies: The Nightmare of the Weimar Collapse ) what we are seeing in Venezuela right now is shockingly familiar. We know the story of unbacked printing of fiat currency and we know how badly it ends. We also know this should be huge news! We want to shout “Look!!! This is exactly what we’ve been talking about for years, yet you keep dismissing us as tinfoil hatted cranks!” So why is one of the biggest stories of the year, and probably the decade, being dribbled out in tiny, disingenuous soundbites? Why is a zoo gorilla shooting (or whatever random faux outrage of the day) given such outsized coverage relative to actual impact on current and future affairs? Why is the western media whistling past the graveyard of Venezuelan hyperinflation and brutal economic collapse?

I suspect it largely comes down to three things: (1) A reflexive instinct on the part of the Media to cocoon the progressive “narrative” of social justice redistributionism = good / any opposition to this = bad… especially during a Presidential election year, (2) outright embarrassment for previous support/praise for Chavez, or for vocal support of the exact types of policies Chavez enacted, and (3) deep-seated fear that people will connect the dots between redistributionist tax policies and entitlement spending, irresponsible money printing, and ultimate economic collapse. A fear, in other words, that people might realize, through this real-world example, that even resource rich, formerly wealthy countries are not immune to the laws of economics and a Weimar ending. In short, Venezuela brings out a whole host of giant skeletons from a closet that the Media, their easy-money policy dependent corporate masters, and the social justice peddling intelligentsia “thought leaders” of the academy would rather just stay hidden. So Venezuela is ignored, downplayed, and above all else, treated as a story about “bad luck” and corruption.

Matt O’Brien has been one of the few mainstream reporters to write about Venezuela in the national press, for the Washington Post, every few months during 2016. Yet as an intelligentsia wannabe (a former writer for Wonkblog and The Atlantic), despite his knowledge of what is happening, despite being one of the only mainstream reporters giving this story attention, old Matty cannot bring himself to truly name the beast that killed Venezuela. Look at this recent article purporting to identify the causes of the collapse. The author contorts, distorts, and bends over backwards to shield Socialism and money printing as the root cause of the disaster, instead working hard to place the blame on corruption, the deliberately vague euphemism “economic illiteracy” (which could mean anything), and even drug smuggling. Now these were certainly facets of the Chavez and Maduro governments, as far as they go, but they are hardly causative by themselves. He even lamely tries to say “Look at Alaska, they have ‘socialized’ oil revenues and that’s been just fine”, but his argument ignores two massive realities. One, the human failings and shortcomings he mentions are present in EVERY Latin American government (and, I would argue, pretty much every government, period) so like all central planners he seems unaware that the implication of his defense is that for his favored system to work as he apparently envisions, he will have to await the arrival of some mythical perfect angels to run his socialist paradise. Second, in his rush to blame mere corruption and malfeasance, he studiously ignores the long, extensive list of highly socialist actions enacted through the years that Ricardo Hausmann, former Venezuelan Minister of Planning and someone far better placed to know and understand the true causal factors in this case, writes are the primary causes of the present misery:

“In Venezuela, the Law of Just Costs and Prices is one reason why farmers do not plant. For that reason, agro-processing firms shut down. More generally, price controls create incentives to flip goods into the black market. As a result, the country with the world’s most extensive system of price controls also has the highest inflation – as well as an ever-expanding police effort that jails retail managers for holding inventories and even closes the borders to prevent smuggling. Fixing prices is a short dead-end street.

…After former President Hugo Chávez was reelected in 2006, he expropriated farms, supermarkets, banks, telecoms, power companies, oil production and service firms, and manufacturing companies producing steel, cement, coffee, yogurt, detergent, and even glass bottles. Productivity collapsed in all of them.”

All that (price controls, freebies for the poor, mandated wage hikes, government take-overs of the means of production, etc) is textbook Socialism, paid for through unbacked money printing, and is a far cry from the mere “corruption, drugs, and stupidity” story being peddled by O’Brien to protect Socialism from the stink of Venezuela, isn’t it? Chavez ran the middle class out of the country for nearly two decades, making it impossible for people with the education and skills to manage businesses, bring products to market, garner a living or even earn profits without most of them being “redistributed” through confiscatory tax rates to the poor, to buy the votes of the “Chavistas”. The smart ones got out. Without a middle class left - without working farms, distribution networks, factories, and the people to make them run - what is left? A shell of a country that is collapsing before our very eyes, and there is nothing anyone can do about it.

The story is a ruinous embarrassment for leftist academics, progressives, and writers who have at one time or another either directly praised Chavez for taking these actions in the past or who themselves have advocated for many of these same “solutions” as part of their political ideology or platform.

This Huffington Post article fawning over Hugo Chavez at the time of his death in 2013 is a good example, and while it’s a bit overwrought it is not at all out of the mainstream of the “thought-makers”. The author likens Chavez to Simon Bolivar and describes him as a man of the people, bringing social justice and fighting against corruption (hilarious, given that his no-talent thirty-something daughter is now believed to have a net worth of 4 billion dollars, much of it presently in offshore accounts). The Huffington Post, using standard tactics of the New Left in linking racial equality with Socialism (thereby dishonestly marginalizing anyone who disagrees with their economic agenda as inherently racist) wrote that Chavez “represents the socialist ideal: that the poor, the coloured, the illiterate, the segregated and the oppressed citizens deserve a fair shot at the basic constructs of society: education, healthcare and employment.” The author went on to rave that “Chávez offered light where there was once darkness, supplied doctors to the sick, afforded free schooling”.

If you have the stomach for it, review the recent pictures from this Daily Mail article on the current state of hospitals and health care throughout the country, to witness the endpoint of this amazing healthcare system that Chavez was so widely praised for by the redistributionists at HuffPo. I’ll bet, given current events, that this is one article they might want back. I’ll also bet that this, and many other similarly embarrassing (in hindsight) articles and opinion pieces, has a lot to do with why we aren’t hearing about Venezuela much in the mainstream press these days. Why further embarrass yourself, your colleagues, or at the very least, your side?

Salon provides us with another fine example from just three years ago. In 2013 they published this astounding, and frankly quite revealing, praise for Chavez:

His full-throated advocacy of socialism and redistributionism at once represented a fundamental critique of neoliberal economics, and also delivered some indisputably positive results. Indeed, as shown by some of the most significant indicators, Chavez racked up an economic record that a legacy-obsessed American president could only dream of achieving. …In a United States that has become more unequal than many Latin American nations, are there any constructive lessons to be learned from Chavez’s grand experiment with more aggressive redistribution?

This… THIS is exactly why the media is prevaricating or ignoring Venezuela. Because, to quote Salon’s eminent business writer David Sirota above, there are indeed “lessons to be learned from Chavez’s grand experiment in aggressive redistribution”, but they are not the ones our media, academic, or corporate betters would like us to learn. As people search for dogs in the streets to kill for food, fight for toilet paper, watch children starve, try to smuggle baby formula into the country, wait in lines for days in the vain hope that their depreciating Bolivars will buy something (anything) that might randomly show up at the store that day from the failed supply chain, watch the murder rate skyrocket until Caracas becomes the most dangerous place on earth… the lessons are plain, all right. So LOOK OVER THERE!!! THEY SHOT A GORILLA!!!

. . .

The aftermath of hyperinflation in the Weimar Republic was unforeseeable and devastating, a shattered generation whose anger and helplessness gave rise to Adolph Hitler, National Socialism, and ultimately the horror of World War II and 70-90 million military and civilian deaths. Nobody could have foreseen such things at the time, obviously, but from utter devastation often comes unexpected and dangerous outcomes. I will be watching the Venezuelan hyperinflationary event and economic collapse very carefully in the months and years to come, and will be very mindful that its aftermath will also likely be both unpredictable and dangerous. Will dominoes fall, with Venezuela’s 2016 collapse causing refugee flows possibly taking down Columbia, perhaps as early as 2017? Would this be enough to destabilize Ecuador, and will all this on the northern border of a huge and powerful, but increasingly fragile Brazil suddenly mean that we may find ourselves on the verge of an economic crisis the length and breadth of South America circa 2018 or 2020? Would that roil the entire world economy? I have no idea. I DO know that a black swan event is one that few people see coming, and at this point I think it is safe to say that few people realize the extent of the damage, or the possibility for far-reaching consequences, of the Weimar event taking place in Venezuela. I also know that folks there would have been very wise to have bought and stacked real money while they could. In their case, it just might have made all the difference:

Just in case... Keep stacking.

About the Author

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J Sieferttyberious
Jun 5, 2016 - 4:19pm

Re. culture synonymous with race

I would say 'no' not synonymous, but culture is an important constituent of what makes up the glue of an ethnic group... as are several other constituents.

tyberious
Jun 5, 2016 - 4:04pm

J. Siefert

Is culture synonymous with race!

J Siefert
Jun 5, 2016 - 3:15pm

I am a Racist

Here Paul Weston in the UK explains this well...

Video unavailable

Edit: I think defending one's own race and promoting healthy values among them is something to aspire to. All healthy peoples with a future will be inherently "racist."

infometron
Jun 5, 2016 - 3:00pm

@OOOBuck Re: Cal

"That was your best post ever (since I joined a mere 6 weeks ago)"

There, as AE would say, fixed it for ya!

OOOBuck
Jun 5, 2016 - 2:23pm

Cal Lawyer

Impressed the hell out of me. That was your best post ever!!!

OOOBuck
Jun 5, 2016 - 2:19pm

If Tyberious were a Democrat

Clinton's success to date is in no small part due to the oligarch controlled DNC and major media who insist on omitting the whole story and almost gag when they they have no choice but to report anything negative about Hitlery.

Californians have been told for weeks now that the Sanders campaign is done, no chance, nada. Given that kind of reportage, it comes as no surprise that voters might decide to swing their votes to the apparent winner (or not vote at all) and consolidate their efforts in defeating the GOP candidate.

But it's not true; this race is still way too close to call!

The Super Delegates won't be casting their votes until July and unless Hitlery scores major wins in the remaining primaries, it will be THEY who hold the deciding votes.

Hitlery should be indicted but it won't happen.... unless she loses California badly and does poorly in the remaining primaries. If so, her pledged Super Delegates will go byebye.

I also agree with North in that Trump, despite his weaknesses, could really give Hitlery a pounding. Dems better wake up and smell the coffee.

Jun 5, 2016 - 1:58pm

@Pining

Another excellent article, stunning in its brilliance. Thank you for such a compelling analysis.

My key takeaway, from events such as the collapse of Venezuela, as you have so eloquently analyzed it, is simple: the absence of western media coverage of any major event proves the seriousness of it. And by seriousness, I mean the implications and ramifications of the effects of the event upon the western elites' ability to spin their narrative is impaired if not outright destroyed.

We have now, for years, been talking of the western elite cabal, the fact that the narrative is being run by relatively few media outlets, to the point that media, and popular culture in the west, has become pure propaganda, designed to manage perception. We call it MOPE, management of perception economics. We have talked about the WHY, as well, that is, perception = reality. There is zero desire of the western elites to share power, or the horror they must feel at the though of actually losing power.

Hence, everything, and I mean everything spewing from media sources has to be vetted through a filter, before being consumed.

Your article has inspired my thinking, and at last I have devised a 100% guaranteed filter, that will instantly resolve the question about the veracity of factual underpinnings of any story about a world event. The corollary is true as well, that is, the filter works both ways to prove both truth and non-truth about western media reported events.

The filter is simple. If the western media covers it, it is an event worthy of paying attention to, not because they cover it, but because the fact they cover it means they want to spin it to slant it in a particular direction --in favor of perpetuating the current western fiat currency scheme--designed to manage perception. If they do not cover it at all, then that fact alone guarantees the seriousness of the event, meaning, the elites cannot cover it because they will draw attention to it and have no ready spin or response they can offer that will diffuse it, or spin it, or blame someone else for it.

Let me point out one example. Benghazi, and the killing of the US "ambassador." This was such a sensational event, arising on a sensitive date for US citizens, that because it occurred it drew worldwide media attention. Thus, the western media could not ignore it. Thus, the western media was forced to give it some attention, and they did, with what we know now was an amateurishly fake cover story about a nobody filmmaker supposedly stirring up such discontent from his movie, that the radicals decided to attack a US embassy.

We all knew that was such immediate bullshit as to be laughable, but, did that stop the western media from spewing forth that nonsense from that lying Obama spokeswoman Rice? And, what consequences befell her for such lies? Who has ever been held accountable?

See?

The western media had to spin the story, they could not ignore it, and they spun it into such a comedic web of pure bullshit as to be amazingly amateurish and clearly a false story. But, the spin had the desired effect of taking the scrutiny off the real story, for awhile, sufficient to get to the next Kardashian ass picture and story of how she is dating a new boy toy.

But remember how the western media really did not have a narrative at all right away? See how they had to craft up some spin, and it took awhile?

Now look at the total lack of coverage of any media stories regarding the legal battle in the courts in California regarding concealed carry permits and the government's overreaching. Silence. Crickets. Nothing.

But, let there be a two bit hoodlum carjacking in a bad neighborhood and that story gets non-stop news coverage. Why?

See the pattern?

This Venezuela lack of coverage was puzzling me, but I just did not have the time to dig in and try to figure it out. You did, and amazingly so, in a concise manner.

You have now allowed me to reach the conclusions that I have reached, and to express the simple truth filter solution!

The absence of western media coverage of a major event proves the seriousness of it.

So, going forward, the method of analysis is also simple:

(1) Evaluate HOW the information of a major event was transmitted or communicated. [Major media, or alternative media];

(2) Evaluate WHEN the information was transmitted or communicated relative to WHEN the event occurred. [reality of the actual events is far more likely truthful the closer in time to the occurrence of the event, as the lies take time to craft, spin and vet];

(3) Evaluate whether western media ignores the event. [if it is being ignored altogether, it is SERIOUS];

(4) Evaluate whether there is a pattern of western media ignoring the event, and if there is a pattern, understand the the truth is exactly the opposite of what the western media eventually spews out.

(5) Keep connecting the dots of the absence of media coverage about events, and discern the underlying truth from the ABSENCE of western media coverage!

Examples:

(1) Missing Malaysian airplane;

(2) Missing pages of 911 report;

(3) Failure to audit Fort Knox gold repository for nearly 50 years;

(4) Failure to deliver Germany's gold;

(5) Chinese purchase of JPM Chase building in New York, with vaulting directly next to US Fed vault;

(6) 90% of world supply of heroin coming from Afghanistan;

(7) Manipulated US labor data showing low unemployment rate, but skyrocketing rise in numbers of persons not counted in the labor pool;

(8) I could go on and on, but you get the point . . .

Thanks again my friend, I am indebted to your brilliance.

Give me a holler when you get out to So Cal. Golf's on me at my course!

Swineflogger
Jun 5, 2016 - 1:57pm

For you Pining: My favorite pirate drinking song

The Captain’s Wife’s Lament

The ship sailed into harbor

After fifteen months at sea

The captain hit the tavern

With his crew of fifty-three

After drinking up their pay

They staggered through the town

But all the inns and public houses

Turned the sailors down

The captain said “Fear not, me lads

You all can come with me

I live just ‘round the corner

And you all can stay for free”

But when the captain’s wife awoke

Upon the break of day

They say that you could hear her wailin’

Clear to Bot’ny Bay…

She said there’s

Seamen all around the bed

And seamen on the floor

Seamen in the bathroom

And behind the closet door

There’s seamen in the fireplace

And seamen in the hall

The living room is carpeted

With seamen, wall to wall

There’s seamen in the entryway

And seamen on the stair

And worst of all, there’s even seamen

In me underwear

There’s some behind the larder

And beneath the table, too

I do believe your seamen

Got into me Irish stew

There’s seamen here in front of me

And seamen in the rear

My God—there’s even seamen

Hanging from the chandelier

There’s seamen on the windowsill

And seamen in the yard

The seamen even left a stain

Upon the Saint Bernard

Although I am a patient wife

‘Tis more than I can bear

To wake up in the morning

With your seamen in my hair

I ne’er again do wish to see thee

Darken up my door

So clean up all your seamen and

Come round my way no more

So clean up all your seamen and

Come round my way no more!

Read more at https://www.songlyrics.com/paul-and-storm/the-captain-s-wife-s-lament-ly...

tyberious
Jun 5, 2016 - 1:47pm

If I Were a

If I Were a Democrat

garynorth.com / Gary North / June 04, 2016

It is not easy for me to get inside the mind of a Democrat, but I will try.

First, I would be ready to stick it hard to the big New York banks for what they did leading up to 2008-10.

Everyone is ready to do this. Why should Democrats not be on this bandwagon?

Hillary Clinton is obviously on the take. Nobody gets $675,000 from Goldman Sachs for three speeches because of the content of the speeches. Nobody who is as charisma-challenged as Hillary Clinton gets as much as $2,500.

She and Bill have pulled in $153 million in speaking fees. “It’s just one of those things . . . just one of those crazy things.”

Second, the woman may be indicted by the justice department for her unguarded emails. Maybe she won’t go to prison, but she will spend her Presidency dealing with subpoenas and legal responses. What kind of agenda is this?

Third, she may get indicted after the nomination but before the election. Is it wise to have the party’s standard bearer under indictment? Will Donald Trump mention this from time to time in his own inimitable way?

READ MORE

Heart's Yours
Jun 5, 2016 - 1:07pm

secret US deal with Saudi Arabia regarding Treasuries

This is a fascinating story from Bloomberg about a secret deal made in 1974 regarding getting the Saudi's to invest their petrodollars back into US Treasuries and the US covering up/hiding/lying about those purchases and Saudi holdings for the last 40 plus years. https://www.msn.com/en-us/money/markets/the-untold-story-behind-saudi-ar...

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