IKN

This corner of cyberspace might whack at Bloomberg Venezuela sometimes but that doesn’t mean for a second that the competition is any good. In fact, it’s crappo. Follow the bouncing ball, people:

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First we have Reuters stoking the rumours and heresay that shot the Bolivar Fuerte (VEF) up to as much as 6.6o to the dollar yesterday before it closed at 6.10.

Reuters, March 19th 5:29pm EST: “Chavez promises to this week unveil a set of economic measures that are the government’s response to lower oil income. The measures could include moving the official bolivar peg……..”

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Cut to today, and notice the timestamp on Bloomberg’s factual report:

Bloomberg, March 21st, 7:22pm EST: “Venezuelan President Hugo Chavez said he won’t devalue the country’s currency.”

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Then 27 minutes later, Reuters plays the revisionist card.

Reuters, March 21st, 7:49pm EST: “Some analysts believe Chavez is preparing a devaluation of the fixed-rate bolivar currency, although the president said in February he would not devalue in the short term.”

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Moral of the story: Do not listen to these fools. The measures announced by His Hugoness today include (so far) a 3% upping of VAT/sales tax from 9% to 12% and making the obvious public debt overrun official by bumping up the 2009 budgeted debt to VEF34Bn..not exactly world-shatteringly surprising, bar perhaps the fact that the Chávez admin has come clean about its deficit.

As for the seemingly chimeric deval, it’s only people that follow the MSM like sheep that thought Hugo would actually drop the currency this time around, cos for the smart folk (such as BBO, who called it perfectly) the whole thing was just a great way of making money by selling your dollars at over VEF6 this week, buying them back next week and pocketing the difference. As mentioned before on IKN, you can expect a VEF deval in the second half of this year if and only if crude oil doesn’t pick up. My tipping point price is $65/bbl, but that might change. BTW, don’t ask me for a forecast on whether that price will happen because I’m a total zero at picking oil. Vamos a verrrr…….