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And the predictable slide begins
Posted by: McQ on Thursday, January 05, 2006

Funny how some people can't learn from the experience of others, but seem to have to learn the lessons of reality the hard way. We visit our good friend Hugo Chavez's Venezuela for the third time in a week:
Coffee is vanishing from Venezuelan stores as producers protest price controls they say are strangling profits — no laughing matter in a country where drinking the bitter brew is not simply a habit but a culture.

Troops and inspectors have begun raiding inventories held by private companies in an effort to ease the scarcity, authorities said on Wednesday.

The dispute over the bitter beans can be traced back to early 2003, when coffee fell under price controls for staple foods imposed by President Hugo Chavez's government as a way to counter inflation and protect the poor. But prices set in early December outraged coffee producers, prompting protests in downtown Caracas and paralyzing deliveries.

National Guard troops have so far seized about 330 tons of coffee stored by wholesalers in Yaguara and Guacara, near the capital of Caracas, and more raids were planned, said Gen. Marcos Rojas Figueroa of the National Guard.

"That coffee is going to be sold ... at the established price," he said.
Well that may very well be true. But will the coffee then be produced for sale in the future? That becomes the question.
"We don't understand by what whim they expect us to sell coffee below the cost of production," Gaetano Minuta, director of a coffee producers union in western Merida state, said on Wednesday.

Minuta said coffee producers were buying unprocessed beans at a regulated price of $1.31 a pound. Roasting and other processes to ready the beans for market raised the cost to $1.58 a pound — above the price of $1.57 per pound that the government has set for consumers.

"The country has to understand that we're at peak harvest ... and we don't have anywhere to sell it," Minuta said.
Graduates of Econ 101 know that it won't continue to be produced unless producers are allowed to make a fair profit. Dry up Venezuelan coffee production and what happens?

It must be imported. And Chavez can't control what another country charges can he? Of course if he tries to maintain national price controls below the price of imported coffee, well again grads of Econ 101 can tell you the result.

Wonder how popular tea is in Venezuela?
 
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The real question here is how will Chavez find a way to blame the Jews (or ZIONISTS for those like Orlando) for this.

Maybe he’ll castigate the Jews for not drinking enough coffee?
 
Written By: shark
URL: http://
Time for the Caracas Coffee Party.

I volunteer to help send lawyers, guns, and money.

Yours, TDP, ml, msl, & pfpp
 
Written By: Tom Perkins
URL: http://
My guess is Chavez thinks that outside countries will enter into subsidized trade pacts with Venezuela.

It appears he has executed a two-pronged inducement to this end: the carrot of subsidized oil exports, and the stick of regional political destabilization.

An indication of his tactics comes, too, from his radical opposition to CAFTA. You can smell the fear he has for free trade. A fluid, free market is anthema to an economy reliant on his bureaucratic favors - and Chavez knows it.

Incidently, so do America’s Democrats.
-Steve

 
Written By: Steve
URL: http://
It appears he has executed a two-pronged inducement to this end: the carrot of subsidized oil exports, and the stick of regional political destabilization.


Excellent point.


You can smell the fear he has for free trade. A fluid, free market is anthema to an economy reliant on his bureaucratic favors - and Chavez knows it.


Exactly. Such a free market would work directly against his ability to "spread the wealth selectively" as noted in the article about Chavez by Javier Corrales in this month’s Foreign Policy and highlighted here.

 
Written By: McQ
URL: http://www.qando.net/
Time for the Caracas Coffee Party.

Exactly my thinking. It would be poetic justice if this sparked an outright revolt against Chavez.

Of course, this will probably just give him an excuse to nationalize the coffee industry.
 
Written By: Brian Martinez
URL: http://cluebyfour.livejournal.com
The real question here is how will Chavez find a way to blame the Jews (or ZIONISTS for those like Orlando) for this.
Not the Joos shark... it those damn CAPITALISTS!!!!!!!

Waiting with baited breath for Orlando’s response.
 
Written By: meagain
URL: http://
They will now drink premium Bolivian coffee, bartered in exchange for crappy Venezuelan oil.

The future of Venezuela is grim, combining economic doom with a plentiful supply of drugs of abuse. HIV will spike among the people like in Haiti, and Hillary will pledge billions in aid for Hugo.

This is how business is done.
 
Written By: Ron
URL: http://
Yup, nationalized Venezuelan coffee is coming, before the next harvest. I hope that the Venezuelan coffee producers have the sense that the Cuban cigar makers did and get out now.
 
Written By: Phelps
URL: http://donotremove.net
What a shame. Venezuela, along with Chile, used to be one of Latin America’s success stories. Now only Chile has a functioning, free economy and the political stability that goes with it... let’s hope that at least Chile can stay that way.
 
Written By: Edward (UK)
URL: http://

 
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