Chavez To Gobble Up More Industries

Hugo Chavez, apparently not content to nationalize the oil industry alone, has now threatened to take over the banking and steel industries in Venezuela as well. Unhappy with the investment policies and outsourcing, the dictator sent envoys to the leaders in both industries to demand lower prices and total cooperation with his economic plans:

President Hugo Chavez on Thursday threatened to nationalize the country’s banks and largest steel producer, accusing them of unscrupulous practices.
“Private banks have to give priority to financing the industrial sectors of Venezuela at low cost,” Chavez said. “If banks don’t agree with this, it’s better that they go, that they turn over the banks to me, that we nationalize them and get all the banks to work for the development of the country and not to speculate and produce huge profits.” …
Chavez also warned that the government could take over steel producer Sidor, which is controlled by Luxembourg-based Ternium. Shares of Ternium fell 3.9 percent to $26.15 in U.S. trading after Chavez’s comments.
Sidor “has created a monopoly” and sold most of its production overseas, forcing local producers to import tubes and other products from China and elsewhere, Ch?vez said.
If Sidor “does not immediately agree to change this process, they will obligate me to nationalize it,” Chavez said. “I prefer not to.”

It seems obvious that Chavez wants to nationalize all industry in Venezuela. He has demanded and received dictatorial powers from the Venezuelan rubber-stamp parliament in order to bring the country out of its economic “crisis”, which gave Chavez the authority he needed to nationalize the oil industry. Despite doubts that Chavez can produce under those conditions, now he wants to get total control of investment capital and the steel necessary for an industrial nation.
Earlier this year, Chavez took over the phone system. He also nationalized the electrical providers, and has threatened to eliminate the last of the independent television broadcasters at the end of this month. He wants total control of Venezuela in order to ensure that no one else can wrest him from power. He wants to create a new Cuba on the South American continent.
How long will it be before we start hearing about the superior Venezuelan health-care system from American Leftists?

12 thoughts on “Chavez To Gobble Up More Industries”

  1. Too late. Art Rascon, a reporter for the local Houston ABC affiliate filed a report on Tuesday from Venezuela. He interviewed a poor family with a son who had multiple operations on his legs, all at Gov’t expense. He was gushing over the health care and the benevolence of el Jefe. To be fair, he did interview a business owner who said that he thought Chavez was forcing the middle and upper classes out of the country.
    The locals say that all the wealth in Venezuela is in banks in Miami, or in secret Swiss bank accounts.

  2. Re: Capt.
    You might want to google the implication of Chavez’s current crazy action (withdraw from IMF). That alone will trigger technical default (since sovereign debt contract have written in it that the underlining sovereign entity is member of IMF). Can you say $4.5 billion of accelerated payment that the bond holder can and will demand? And with that default, you can kiss Venezuela’s credit rating goodbye, which no amount of petro-dollar can buy back.
    Chavez will have to relied on non-open market to continue to finance his ever expanding social program.

  3. Sounds like an opportunity for Putin’s Russia to come to the rescue of a bankrupt Venezuela. That’s all we need is another Cuba in the region.
    One can almost hear the sound of a toilet flushing.

  4. Cap’n Ed wrote:
    It seems obvious that Chavez wants to nationalize all industry in Venezuela. He has demanded and received dictatorial powers from the Venezuelan rubber-stamp parliament in order to bring the country out of its economic “crisis”, which gave Chavez the authority he needed to nationalize the oil industry. Despite doubts that Chavez can produce under those conditions, now he wants to get total control of investment capital and the steel necessary for an industrial nation.
    It’s ironic that many of the people who yap about “King” George Bush and hysterically cry that he’s trying to build a fascist-ultra-right-wing Christian theocracy in the United States absolutely LOOOOVE Chavez who actually IS a dictator. No surprise, though: the left has had an ongoing love affair with lefty tyrants since the days of Lenin. Chavez represents everything they aspire to be.

  5. The main difference between Chavez-uela and Cuba is that Cuba is an island, which makes it difficult for unhappy citizens to vamoose. Venezuela, by contrast, has long land borders. If it gets bad enough, Chavez will suffer a huge brain drain as his most talented subjects flee to better places.

  6. The Venezuelans are getting the government they elected. I hope they like it.
    Bigfire,
    You underestimate the willingness of the Chinese to suborn what are in essence Western financial institutions. That they can do so in Venezuela is fiat accompli — Chavez needs allies, and he’s got them lined up. The Chinese seem to have no compunctions about striking deals with dictators when the prize is oil; they are our mirror image in that regard.

  7. The Death Spiral in Venzuela Continues

    Chavez has railed against the rising cost of health care and set up free clinics. Combined with other factors this has resulted in Health care getting far more expensive. His threats to seize the health care sector completely won’t stop this spir…

  8. I live part time in Panama and we are seeing an increasing number of Venezuelans coming into the country. Venevision, one of the largest and prestigious producers of soap operas in Latin America is moving its headquarters & production facilities from Venezuela to Panama. If you have any money in Venezuela, its not too soon to get it out…

  9. Chavez: a big thief. Nationalizing industry is theft.
    He’s basically achieved fascism, on his way towards full socialism.

  10. i stand by my prediction–chavez will end up hanging in a town square.

  11. patrick is probably right.
    What is sad is how much the Venezuelans will suffer before a noose stretches his neck.

  12. Bigfire:
    “…can and will demand…”
    I know little about finance, but this guy says that “…the chances of acceleration are slim”:
    http://www.portfolio.com/views/blogs/market-movers/2007/05/04/will-venezuela-really-default-on-its-bonds
    In general, I think all the drama surrounding this default issue is contrived because Chavez is helping to bring about the end of the IMF and the World Bank, and a lot of people are not too happy about it.
    Venezuela is not the only one. Ecuador just kicked their World Bank representative out of the country.
    unclesmrgol:
    “The Venezuelans are getting the government they elected. I hope they like it.”
    They love it. Most Venezuelans still remember the Caracazo, and it is very satisfying for them to see Chavez flush the IMF down the toilet. Chavez popularity rating is currently at 65%. What is Bushes? 28%?
    SunSetSam:
    “If you have any money in Venezuela, its not too soon to get it out…”
    Really. Venezuela’s stock market was up 150% last year. Foreign investment in Venezuela is at an all time high as well. In contrast, I just read a NY Times article last week about foreign investment in the SU being “surprisingly low”.

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