Posted by Karol at 02:36 PM
Technorati Tags: Venezuela Exxon Conoco
This is terrible news for Venezuela. It takes a great deal of technical knowledge to extract oil from a well without losing pressure. Lose well pressure and the oil is gone forever.
Since Chavez took office, he has chased off all the skilled labor and the companies that are experts in extracting oil. Consequently, Venezuela’s oil output is dropping like a rock. It also means he won’t have the cash to buy votes to keep him in office.
Thus he has become much more ruthless in recent months in an attempt to remain in office. So ruthless-the man has become Jimmy Carter’s favorite dictator.
Chavez has a time-honored method of stretching out his money, which also creates a scapegoat: inflation. As his government creates more money, he can keep up his social programs and pay government employees. And as inflation ramps up, he can blame that evil capitalism. That inflation would not the same as Venezuela’s present inflation, which is a *natural* reaction of prices when the money supply increases from prosperity.
Morales next door is just as bad. They’re following in Castro’s footsteps to an extent, but more so following in the footsteps of African dictators who, one way or another, have driven out or discouraged foreign investment for decades.