Chavez Threatens to Nationalize Banks

[Demeter]

Chavez Threatens to Nationalize Banks

Venezuelan President Hugo Chavez is at it again. After nationalizing, in January, the country's largest telephone company CANTV and the electricity sector, and oil companies on Tuesday, Chavez is eyeing the bank industry.

"Private banks have to give priority to financing the industrial sectors of Venezuela at low cost. 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 said ,
according to AP.

Well, at least he will keep the private equity guys out of the country. The problem is that he will end up keeping all capital from looking at Venezuela as a placed to invest.

We fully expect this Rambo of Latin American finance to make the next move that all financial dictators do, and that's to start printing money by the truckloads. You've heard of "suicide by cop"? Holding Venezuelan bolivars or investing in Venezuela is going to become the financial equivalent, "financial death by Chavez."
Labels: Venezuela

posted by Raymond Weber @ 5:09 PM

http://www.economicpolicymonitor.com/


THE BLOGGER SHOWS HIS PREJUDICE--BUT WITH THE LARGEST OIL RESERVES IN THE WORLD, DOES CHAVEZ NEED OUTSIDE CAPITAL? I THINK THAT PROPERLY MANAGED, A STATE BANK IS SUPERIOR TO THE KIND OF SCREWING WE IN THE US HAVE PERIODICALLY ENDURED FROM OUR "PRIVATE" BANKS. TIME WILL TELL. WATCH THIS CHANNEL FOR UPDATES!

[paulk]

1. it's a valid point, "prejudice" or no

Chavez is running the very real risk of running, not just foreign investment capital out of the country, but a lot of Venezuelans also. It wouldn't surprise me to see him close his borders to stop domestic capital flight.

Betting your country's future on one industry and it's continued success is a risky strategy, especially considering that oil prices have to stay above $40 a barrel to make extracting VZ's tar profitable.

[AX10]

2. Chavez is a jackass. He's a left wing extremist.

If you want to see a real leader who is working to bring peace and stability in South America, look no further than Brazil's Lulu!

[Judi Lynn]

3. Checking the latest Time Magazine's article on Chavez can only help:

Chavez's Not-So-Radical Oil Move
Tuesday, May. 01, 2007 By TIM PADGETT/MIAMI

Venezuelan President Hugo Chavez has a garish knack for making the world think he's the most radical of radicals. So when the left-wing, anti-U.S. leader ascended a raucous stage in front of a petrochemical plant in eastern Venezuela today — May Day, the leftiest day of the year — and announced his government's takeover of the nation's lucrative heavy oil industry, it sent the usual panic through Washington and the international media. "It's national power!" shouted Chavez, who controls the hemisphere's largest crude reserves. "We can't have socialism if the state doesn't have control over its resources!"

But the truth — one that both Chavez and his archfoe, the Bush Administration, would prefer you not know — is that when it comes to oil nationalization, Hugo is hardly the most radical of his global peers. In fact, even after today's petro-theatrics, Chavez is just catching up with the rest of the pack.

From Mexico to China, more than 75% of the world's oil reserves are controlled by national oil companies today. Of the world's top 20 oil-producing firms, 14 are state-run. And even though Chavez has now stripped foreign oil companies like Exxon Mobil of any majority stakes they had in Venezuelan oil production projects — mandating that his state-run company, Petroleos de Venezuela (PDVSA), have at least 60% ownership from here on out — he's at least allowing those private multinationals to continue taking part in the drilling. Not so, for example, in Mexico or the world's largest oil producer, Saudi Arabia. Washington touts those two countries as model energy allies, despite the fact that for more than half a century their national oil companies have barred U.S. and other foreign oil businesses from production ventures.
(snip)

Apart from his fiery rhetoric, what makes Chavez's move seem more jarring is the fact that, until he came to power in 1999, Venezuela had been a trend-bucking oasis for Big Oil. Venezuela did nationalize its oil industry in 1976, but in the 1990s it had steadily reopened its fields to foreign investment — in some cases handing the multinationals deals that even conservative Venezuelans considered too sweet. Chavez has just as steadily, and stridently, reversed that policy, paring down the multinationals' ownership while ratcheting up their taxes and royalties. And because Venezuela is America's fourth-largest foreign crude supplier — providing the U.S. with almost 15% of its oil imports — each turn of his nationalization screw tends to provoke outsized alarm.

http://www.time.com/time/world/article/0,8599,1616644,00.html

[bemildred]

4. Sacrilege!

:rofl::rofl:

[upi402]

Blasphemer!

:evilgrin:

[upi402]

5. double post