WEBVTT - 41: Venezuela Is at a Breaking Point 0:00:00.000 --> 0:00:01.880 And I just remember I was in Miami a couple 0:00:01.880 --> 0:00:03.880 of months and in the drug store and coming back, 0:00:03.920 --> 0:00:06.920 and you kind of ask yourself, am I really doing this? Like? 0:00:06.960 --> 0:00:11.080 Am I really filling an entire suitcase of toiletries and 0:00:11.520 --> 0:00:14.800 laundry detergent and and and then yes, Yes, I'm doing it. 0:00:14.920 --> 0:00:24.880 I have to go back. Wow. Hello, and welcome back 0:00:24.880 --> 0:00:28.400 to Bloomberg Benchmark, a show about the global economy, Amakido, 0:00:28.440 --> 0:00:32.280 Bloomberg News in San Francisco. Today, Tori is still traveling 0:00:32.280 --> 0:00:36.960 with Treasury Secretary Jack lou but I'm joined by Bloomberg 0:00:37.040 --> 0:00:43.200 Data editor Katerina Suriva in d C. Hey, Katerina HIJACKI, Hey, 0:00:43.280 --> 0:00:45.760 do you want to tell everyone why your voice sounds 0:00:45.800 --> 0:00:50.080 so familiar? Well, as you can recall, I was the 0:00:50.200 --> 0:00:56.080 star of Benchmark podcast episode six, in which I talked 0:00:56.120 --> 0:01:00.920 about how I use the low euro dollar exchange right 0:01:00.960 --> 0:01:05.200 to my advantage when planning my wedding in Europe. Amazing. Well, 0:01:05.200 --> 0:01:07.679 my mom has asked me over and over again the 0:01:07.720 --> 0:01:09.160 next time we're going to have you on the show. 0:01:09.200 --> 0:01:11.119 I think she really likes the sound of your voice, 0:01:11.560 --> 0:01:14.880 said she. You have like a real radio voice. Oh, 0:01:15.080 --> 0:01:20.119 thank you, Mrs Eto. Well, Karina, welcome back. Today. We're 0:01:20.120 --> 0:01:23.520 going to be talking all about Venezuela, which has been 0:01:23.560 --> 0:01:26.800 in a terrible economic crisis that only seems to be 0:01:26.840 --> 0:01:30.839 getting worse by the day, everything from a deep, deep recession, 0:01:30.959 --> 0:01:35.399 to hyper inflation, to a complete plunge in its currency, 0:01:36.080 --> 0:01:39.480 and even the possibility of a sovereign default. And that's 0:01:39.480 --> 0:01:43.840 how huge and tragic and and very real consequences for 0:01:43.880 --> 0:01:48.360 everyone living there. So I have a few incredible stats here, 0:01:48.360 --> 0:01:52.400 based on quarterly surveys that I do on Venezuela. The 0:01:52.520 --> 0:01:57.040 economists survey, these are private sector economists, expect consumer prices 0:01:57.080 --> 0:02:00.240 to rise by more than two hundred and fifty this year. 0:02:00.640 --> 0:02:04.320 That's more than triple, and they expect the economy itself 0:02:04.360 --> 0:02:08.600 to contract seven point eight percent this year. Um. I mean, 0:02:08.639 --> 0:02:12.800 these are numbers so bad you rarely see them in 0:02:12.840 --> 0:02:15.520 a modern economy. And I mean, I've been an economics 0:02:15.600 --> 0:02:18.880 journalist for seven years, and even for me, I see 0:02:18.880 --> 0:02:22.919 these numbers and my eyes just completely pop out. For context, 0:02:23.080 --> 0:02:26.480 in the US banking crash, the worst annual contraction we 0:02:26.520 --> 0:02:30.520 saw then was two point eight percent. And you know, Katerina, 0:02:30.560 --> 0:02:35.360 would you say the situation Venezuela's worse than maybe Greece 0:02:35.480 --> 0:02:38.720 in the recent years. Yeah, I would think so. I 0:02:38.760 --> 0:02:41.920 mean Greece even during the worst of it when it 0:02:42.000 --> 0:02:46.520 did have a pretty significant economic contraction. I mean, it 0:02:46.600 --> 0:02:49.240 was still a developed country and you didn't see inflation 0:02:49.360 --> 0:02:52.680 like this. I mean, this is just really scary, scary 0:02:52.840 --> 0:02:57.960 price inflation. Yeah, definitely. So what people might not remember 0:02:58.360 --> 0:03:01.440 was that the Venezuela Ina enemy did pretty well in 0:03:01.520 --> 0:03:04.520 the two thousand's. You had the price of oil really 0:03:04.560 --> 0:03:07.440 skyrocketing up until two thousand and eight when it hit 0:03:07.520 --> 0:03:11.920 about a barrel, and Venezuela has the world's largest reserve 0:03:11.960 --> 0:03:15.240 of oil, so it really should be doing pretty well. 0:03:15.760 --> 0:03:18.280 But after two thousand eight, we saw the price of 0:03:18.320 --> 0:03:22.080 oil come down, and the Venezuelan economy just kind of 0:03:22.120 --> 0:03:25.800 came down with it. Wow. Well, you know, I really 0:03:25.840 --> 0:03:29.919 think it's a fascinating story. Uh, not just about an 0:03:29.919 --> 0:03:33.440 economy and complete crisis, but how a country kind of 0:03:33.440 --> 0:03:37.600 squandered its opportunity with this incredible wealth and natural resources. 0:03:38.160 --> 0:03:40.760 So to help us get a better understanding of what's 0:03:40.800 --> 0:03:44.200 actually going on behind the scenes in Venezuela, we have 0:03:44.440 --> 0:03:48.960 our Caracas Beer Chief Nathan Crux joining us. Hi Nathan. Hey, 0:03:49.000 --> 0:03:52.440 how's it going? Hi Nathan. So we wanted to get 0:03:52.440 --> 0:03:55.040 a look into how all of this started and what's 0:03:55.120 --> 0:03:58.320 next for Venezuela. But first, would you tell us just 0:03:58.360 --> 0:04:02.560 a little bit about you. Um, Are you from Venezuela originally? Oh? No, 0:04:02.680 --> 0:04:07.560 I'm from the US. I'm from Pennsylvania. I studied here 0:04:07.560 --> 0:04:11.920 in Venezuela as an exchange student after high school back 0:04:12.000 --> 0:04:14.440 in two thousand one and two thousand two. And that's 0:04:14.480 --> 0:04:17.240 a year when there was a lot of protests and 0:04:17.279 --> 0:04:19.240 there was a coup and a counter coup that year. 0:04:19.279 --> 0:04:21.400 So I was here as as a high school student 0:04:21.520 --> 0:04:25.600 and saw a lot of of crazy action. Uh. And 0:04:26.000 --> 0:04:28.040 you know, then I went to I went to university 0:04:28.080 --> 0:04:31.640 in Canada, and and then my first job out of college, 0:04:31.680 --> 0:04:34.960 I was in in Chile and Santiago and was there 0:04:35.000 --> 0:04:38.000 five years. And and then yeah, I end up back 0:04:38.040 --> 0:04:40.960 in Venezuela. And I've been back here now just about 0:04:41.000 --> 0:04:44.280 five years. Wow, five years. So you've you've seen this 0:04:44.320 --> 0:04:49.200 whole thing, this whole crisis, from pretty much the very beginning. Yeah, 0:04:49.240 --> 0:04:52.359 and when I got here. Uh. And it's kind of 0:04:52.400 --> 0:04:54.880 interesting if you think about because at least in the 0:04:54.880 --> 0:04:57.160 past decade. You know, Venezuela has not been viewed as 0:04:57.320 --> 0:05:00.080 as an easy place. Even before the economy start it 0:05:00.160 --> 0:05:03.600 to tank there there were serious problems with really really 0:05:03.720 --> 0:05:07.040 high crime rates. Uh and and it's never been kind 0:05:07.040 --> 0:05:10.440 of an easy place to live. But I got here 0:05:10.839 --> 0:05:14.240 the second time around right in two thousand and eleven, 0:05:14.320 --> 0:05:16.520 and that was right after it had been announced that 0:05:17.640 --> 0:05:21.720 chavez As cancer had returned. And and so my coverage 0:05:21.760 --> 0:05:24.880 here started kind of just with the end of Chat 0:05:24.920 --> 0:05:28.040 the air of Hugo Chavez and his death, the and 0:05:28.160 --> 0:05:31.920 the election of the current president, Nicolas Maduro, and and 0:05:31.920 --> 0:05:36.280 and kind of economic decline. Since when you moved to Venezuela, 0:05:36.360 --> 0:05:38.600 do you think you'd be covering this, you know, kind 0:05:38.600 --> 0:05:43.160 of once in a generation economic crisis. I don't think 0:05:43.680 --> 0:05:47.000 I ever thought it would get so bad. I knew 0:05:47.040 --> 0:05:49.320 that it was a tough country, you know, I've been 0:05:49.360 --> 0:05:52.719 here before and had a kind of a crazy here 0:05:52.880 --> 0:05:56.640 in terms of the political situation then, so I knew 0:05:56.720 --> 0:05:59.320 that I was kind of coming to a volatile environment. 0:05:59.360 --> 0:06:03.080 But I don't inc I ever expected to just find 0:06:03.120 --> 0:06:06.839 myself one worrying about my personal personal security so much, 0:06:07.320 --> 0:06:11.000 and to not being able to to find just really 0:06:11.480 --> 0:06:16.560 basic things. So uh, deoda in shampoo, you name it. 0:06:16.200 --> 0:06:19.440 It's it's really hard to find. And uh, you know, now, 0:06:19.480 --> 0:06:22.960 whenever I go back to the US, to Miami or 0:06:23.000 --> 0:06:25.720 Pennsylvania or New York or wherever, I always stop at 0:06:25.720 --> 0:06:28.320 the pharmacy the night before I fly back, and I 0:06:28.360 --> 0:06:31.800 literally fill an entire suitcase of of goods. And I 0:06:31.880 --> 0:06:33.760 just remember I was in Miami a couple of months 0:06:33.760 --> 0:06:36.400 and in the drug store and coming back, and you know, 0:06:36.520 --> 0:06:38.919 you kind of ask yourself, am I really doing this? Like? 0:06:39.000 --> 0:06:44.120 Am I really filling an entire suitcase of of toiletries 0:06:44.360 --> 0:06:48.000 and laundry detergent and and and then yes, yes, I'm 0:06:48.040 --> 0:06:50.880 doing it. I have to go back. Wow. So even 0:06:50.920 --> 0:06:53.839 for someone like you, kind of like an urban professional, 0:06:54.200 --> 0:06:57.120 it is very difficult to find a lot of these basics. 0:06:58.520 --> 0:07:01.240 Oh It's it's near impossible here, except you know, I'm 0:07:01.400 --> 0:07:03.559 one of the lucky few. I I mean, I I'm 0:07:03.600 --> 0:07:06.000 I can travel, I can get out, I can buy 0:07:06.040 --> 0:07:08.120 these things. I have the hard currency to kind of 0:07:08.160 --> 0:07:12.120 acquire these things abroad. I mean, most Venezuelans can't do that. 0:07:12.280 --> 0:07:15.600 So I mean, as as kind of annoying as it 0:07:15.680 --> 0:07:19.960 is for me, it's it's not impossible. Most Venezuelans simply 0:07:20.080 --> 0:07:24.280 cannot find this stuff. And what's it like day to day, 0:07:24.440 --> 0:07:28.200 like buying groceries. I mean, have things been changing in 0:07:28.240 --> 0:07:31.040 the past couple of months. Well, I'd say things have 0:07:31.120 --> 0:07:36.320 been changing progressively over the past couple of years. You know, 0:07:36.360 --> 0:07:40.040 when I first got here, I would shop at a grocery, 0:07:40.160 --> 0:07:43.000 just at a regular grocery store in my neighborhood. You know, 0:07:43.200 --> 0:07:45.480 it was more convenient to go to the grocery stores. 0:07:45.480 --> 0:07:49.120 And and I guess it's maybe been now about two 0:07:49.160 --> 0:07:52.400 years when the grocery stores have have started to distribute 0:07:53.240 --> 0:07:56.480 these regulated goods. And I think if you look at Venezuelan, 0:07:56.560 --> 0:07:59.840 if you ask yourself, what is the the one kind 0:07:59.880 --> 0:08:03.280 of fundamental problem that is at the root of all 0:08:03.320 --> 0:08:06.320 of this wacky stuff going on, And it's the exchange 0:08:06.400 --> 0:08:10.240 rate system. You have three different exchange rates right now. Uh, 0:08:10.280 --> 0:08:12.760 the official rate of ten bull of ours per dollar. 0:08:12.920 --> 0:08:15.440 It's that's been devalued. When I first got here, it 0:08:15.480 --> 0:08:17.520 was four point three, then it was six point three, 0:08:17.520 --> 0:08:19.520 and now it's ten. Then we have kind of a 0:08:19.600 --> 0:08:23.240 secondary exchange rate which has also been devalued since I 0:08:23.280 --> 0:08:25.800 was here. First it was twelve, and then it was 0:08:25.920 --> 0:08:28.720 something like fifty, and and then it went to two hundred, 0:08:28.760 --> 0:08:30.920 and now it's at about five hundred and fifty. And 0:08:30.960 --> 0:08:34.000 then we have a black market rate, which in Venezuela 0:08:34.000 --> 0:08:37.080 it's it's illegal to give out that information, but you 0:08:37.120 --> 0:08:39.640 can look it up there in New York and San 0:08:39.640 --> 0:08:42.800 Francisco and Washington and uh and see that for yourself. 0:08:42.880 --> 0:08:46.360 But um, so you have. What that's done is it's 0:08:46.400 --> 0:08:50.079 made it It's made it cheaper for Venezuela to import 0:08:50.160 --> 0:08:53.160 goods because companies try to get these preferential dollars at 0:08:53.160 --> 0:08:55.760 the official rate of ten bull of ours per dollar 0:08:56.400 --> 0:08:59.439 versus kind of the media the middle rate of five 0:08:59.760 --> 0:09:02.360 and five people of ours per dollar, and so it's 0:09:02.440 --> 0:09:05.000 much cheaper to import goods than it is to produce locally. 0:09:05.360 --> 0:09:08.319 And but then all of a sudden, Venezuela ran out 0:09:08.320 --> 0:09:10.040 of money and they couldn't import the goods and their 0:09:10.040 --> 0:09:13.520 local economy had been kind of decimated. So there's these 0:09:13.559 --> 0:09:20.080 regulated goods staples, corn, flour, milk, sugar, kind of the 0:09:20.120 --> 0:09:24.360 basic items of of the Venezuelan diet. And then personal 0:09:24.920 --> 0:09:27.640 hygiene items are are sold at these preferential rates, and 0:09:27.679 --> 0:09:30.520 they were distributed in grocery stores, and they started to 0:09:30.600 --> 0:09:34.160 run out of them because they're artificially cheap, and you've 0:09:34.200 --> 0:09:38.000 got a whole black market for them. And and so 0:09:38.040 --> 0:09:42.360 then what happened is, uh, they tried to restrict first 0:09:42.440 --> 0:09:44.560 the number of items you could buy at the grocery store, 0:09:44.559 --> 0:09:48.560 and then they restricted the days that you could shop 0:09:48.600 --> 0:09:52.160 in the grocery stores by by your I D number. 0:09:52.280 --> 0:09:55.040 And and so now it's to the point these grocery 0:09:55.080 --> 0:09:58.920 stores have just become kind of centers where where these 0:09:59.000 --> 0:10:01.240 cheap goods are being just ttributed because that's all most 0:10:01.280 --> 0:10:04.600 Venezuelans can afford. So now if you walk around Caracas, 0:10:04.600 --> 0:10:07.680 you will just see lines everywhere. And and so, you know, 0:10:07.720 --> 0:10:09.720 you asked me how my my life has changed. I 0:10:09.800 --> 0:10:12.400 don't really, you know, I don't shop at at the 0:10:12.400 --> 0:10:15.600 grocery stores anymore, just because it's it takes too long. 0:10:15.800 --> 0:10:18.319 I you know, I don't have time to to wait 0:10:18.520 --> 0:10:21.280 six hours in the line. And that's what you have 0:10:21.320 --> 0:10:23.800 to do if you go there. Six hours? Is that? 0:10:23.880 --> 0:10:26.360 How long? Is that? How long? The lines are? Oh 0:10:26.400 --> 0:10:28.560 they're huge, I mean people are in line all day long. 0:10:28.800 --> 0:10:31.440 Some people we did a story a couple of weeks 0:10:31.440 --> 0:10:34.480 ago on they call them bats and those are the 0:10:34.520 --> 0:10:38.560 people who buy goods by the regulated goods and then 0:10:38.600 --> 0:10:41.840 resell them. So and and some of the people in 0:10:41.880 --> 0:10:44.200 the lines are the batri caros, and some are just 0:10:44.440 --> 0:10:47.800 normal Venezuelans. But the point is, now, you know, I 0:10:47.840 --> 0:10:51.199 find most of my goods and kind of just local 0:10:51.240 --> 0:10:55.959 neighborhood shops or there's other stores kind of that focus 0:10:56.000 --> 0:10:59.760 on specialty imported items, and uh, you know, that's not 0:10:59.800 --> 0:11:03.360 some thing that your average Venezuelan can necessarily afford. But 0:11:03.440 --> 0:11:07.200 there there is food here if you have if you 0:11:07.200 --> 0:11:10.360 can afford it, but most people can't afford it because 0:11:10.400 --> 0:11:13.000 they've seen there. Uh you know, we talk about currency 0:11:13.440 --> 0:11:15.920 being at the center of all the issues. The minimum 0:11:15.960 --> 0:11:18.800 wage right now is about thirty thousand boulevards a month. 0:11:18.880 --> 0:11:21.760 So if you look at the official rate, it's that 0:11:21.920 --> 0:11:23.920 sounds like three thousand dollars a month. That sounds like 0:11:23.960 --> 0:11:27.679 pretty high for a minimum wage, but when you look 0:11:27.720 --> 0:11:32.000 at the medium rate, it's about sixty dollars a month 0:11:32.200 --> 0:11:35.360 and much less at the black market rate. So and 0:11:35.559 --> 0:11:38.000 you go to one of these non regulated stores, and 0:11:38.800 --> 0:11:43.200 kilogram of like two pounds of chicken will cost about 0:11:43.200 --> 0:11:46.960 a third of a monthly salary, So people can't afford 0:11:47.120 --> 0:11:49.840 to shop in in the stores where there are the 0:11:49.840 --> 0:11:52.240 products that there are only choices to kind of wait 0:11:53.280 --> 0:11:56.160 for our listeners. I was going to say that that 0:11:56.600 --> 0:11:59.880 black market exchange rate that Nathan keeps mentioning but can't 0:12:00.080 --> 0:12:03.920 legally say what it is, that's a thousand bowl of 0:12:04.000 --> 0:12:08.320 oars to the dollar. Amazing. You know, Nathan, clearly all 0:12:08.360 --> 0:12:12.400 of this has had very real human consequences. Is there 0:12:12.520 --> 0:12:14.800 like one thing that you can think of that has 0:12:15.679 --> 0:12:19.880 maybe made you the angriest or maybe has been the 0:12:19.920 --> 0:12:24.280 most heartbreaking for you? You know, there's there's a couple, 0:12:24.720 --> 0:12:27.120 uh you know, I remember, right when I moved here, 0:12:27.200 --> 0:12:31.439 kind of before the current economic crisis started, my my 0:12:31.640 --> 0:12:35.720 landlord's husband was was murdered. Uh and they have four 0:12:35.800 --> 0:12:39.240 young kids. So, you know, I think everyone who who 0:12:39.280 --> 0:12:41.840 spends a certain amount of time here you hear all 0:12:41.840 --> 0:12:44.880 these stories and you think, oh, well, that's happening to 0:12:44.920 --> 0:12:47.559 someone else. But the more time you start to spend here, 0:12:47.679 --> 0:12:52.200 you will you start meeting people that get end up 0:12:52.240 --> 0:12:54.720 being killed or kidnapped. You start to hear really horror 0:12:54.760 --> 0:12:58.360 stories and kind of the current environment. I think you 0:12:58.440 --> 0:13:04.880 hear tons of really big problems at the hospitals, people 0:13:04.880 --> 0:13:07.600 that cannot get the medicine they need, people who are 0:13:07.760 --> 0:13:11.000 are dying of cancer because they just are not getting 0:13:11.160 --> 0:13:15.120 the right treatment. Here there's there's no medicine. So you 0:13:15.120 --> 0:13:16.960 hear all these stories. But I think kind of another 0:13:17.520 --> 0:13:20.360 another theme that I think about a lot is is 0:13:20.480 --> 0:13:24.880 just the loss of of potential. Uh, you know, I 0:13:25.200 --> 0:13:27.360 think one one of the whole interesting things of this 0:13:27.480 --> 0:13:30.120 Venezuelan crisis. And and you look at the stats and 0:13:30.160 --> 0:13:32.480 you think, why isn't it worse, you know, why aren't 0:13:32.480 --> 0:13:36.000 people starving on the streets. And for me, it's most 0:13:36.080 --> 0:13:41.600 Venezuelans uh own their residents, or they live with their parents, 0:13:41.720 --> 0:13:44.440 or they're in some kind of government housing. So most 0:13:44.440 --> 0:13:47.280 people are not worrying about paying rent or a mortgage. 0:13:47.480 --> 0:13:50.280 So all the money they get they're spending on food, 0:13:50.360 --> 0:13:54.079 but they're not facing kind of that that imminent risk 0:13:54.240 --> 0:13:56.200 of you know, losing their home that you see in 0:13:56.240 --> 0:13:59.320 other countries. But at the same time, if you're kind 0:13:59.320 --> 0:14:02.439 of a recent college grad or or maybe you graduated 0:14:02.480 --> 0:14:04.760 five years ago and are looking to start your career. 0:14:04.800 --> 0:14:08.240 There's not a whole lot of opportunities. Uh, you're gonna 0:14:08.280 --> 0:14:12.480 get a job that's probably gonna pay maybe two minimum wages, 0:14:12.520 --> 0:14:14.280 you know, if you're lucky. So you're looking at like 0:14:14.280 --> 0:14:17.720 a hundred dollars a month, and that that's not anywhere 0:14:17.760 --> 0:14:22.800 near enough to kind of start your life. New apartments 0:14:22.920 --> 0:14:24.680 kind of in the nice part of town, they're all 0:14:24.680 --> 0:14:26.760 being rented in dollars. If you want to buy something, 0:14:26.800 --> 0:14:28.440 it's all dollars. If you want to buy a car, 0:14:28.520 --> 0:14:31.480 it's all dollars. And you know, things kind of are 0:14:31.520 --> 0:14:34.760 all being bought and sold in dollars. But the people 0:14:34.760 --> 0:14:37.240 are making boulevards. So there's just not a lot of 0:14:37.240 --> 0:14:39.760 opportunity here. I was at the you know, I went 0:14:39.760 --> 0:14:42.160 to the gym the other day, and the lady behind 0:14:42.160 --> 0:14:45.000 the counter, you know, said goodbye. I'm I'm getting ready 0:14:45.040 --> 0:14:47.520 to leave the country. And I said, oh, that's too bad, 0:14:47.640 --> 0:14:50.440 and and she she broke down crying. She goes, I'm 0:14:50.480 --> 0:14:52.400 twenty seven years old. What am I supposed to do? 0:14:52.560 --> 0:14:55.920 There's nothing for me here? And and so I think 0:14:55.960 --> 0:14:59.320 that's Uh, you know, the longer time you spend here, 0:15:00.040 --> 0:15:02.760 the more people you see go and you know you can. 0:15:02.840 --> 0:15:06.080 You can you live in kind of the expat bubble 0:15:06.160 --> 0:15:08.800 here if you want, and and it's you know, it 0:15:08.840 --> 0:15:12.000 can be very fancy. There's fancy parties, there's fancy restaurants, 0:15:12.040 --> 0:15:14.760 there's stuff to do here, and you can kind of 0:15:14.800 --> 0:15:17.440 get lost in that bubble. But the more you get 0:15:17.440 --> 0:15:21.240 out of it and really start asking, you know, Venezuelans, 0:15:21.240 --> 0:15:23.880 how they're doing it, They're they're really struggling. I've seen, 0:15:24.200 --> 0:15:26.480 especially in this past two years. And this once again 0:15:26.480 --> 0:15:28.840 all goes back to the currency. You've just seen real 0:15:28.880 --> 0:15:31.800 wages declined so much, and and you've seen kind of 0:15:31.800 --> 0:15:35.440 white collar professionals who two years had what they thought 0:15:35.480 --> 0:15:38.040 were good jobs. They were making money, they could travel, 0:15:38.120 --> 0:15:41.200 they they could buy goods on Amazon and have it 0:15:41.280 --> 0:15:42.800 shipped here, and you know, it was kind of a 0:15:42.920 --> 0:15:47.720 very standard middle class life to vacations a year, they'd 0:15:47.720 --> 0:15:50.360 go to Miami and shopping trips. But now they're they're 0:15:50.400 --> 0:15:54.920 finding themselves entering poverty. And you're seeing people like this 0:15:55.040 --> 0:15:58.560 who you kind of identify with, and and they're they're worried, 0:15:58.680 --> 0:16:01.920 worried about where they're gonna get their their next meal from. 0:16:01.920 --> 0:16:05.560 It's kind of a staggering shift. So Nathan, Um, could 0:16:05.600 --> 0:16:07.800 you take us back a little bit to how all 0:16:07.880 --> 0:16:10.200 of this started. Um, take us back to the years 0:16:10.200 --> 0:16:13.880 of Javis. Sure, well, you first saw Jovis come to power, 0:16:14.640 --> 0:16:18.000 first elected in ninety eight and came to power. It 0:16:18.080 --> 0:16:21.720 was complicated, He was controversial. I think he really became 0:16:21.840 --> 0:16:25.240 radicalized in two thousand two and afterwards when there was 0:16:25.280 --> 0:16:27.880 a brief coup that that removed him from from power, 0:16:27.920 --> 0:16:30.560 and then he came back. There was a big strike. 0:16:31.160 --> 0:16:33.840 But then oil the price of oil rose and there 0:16:33.880 --> 0:16:37.640 was money everywhere. So so they had these currency controls 0:16:37.640 --> 0:16:42.760 and these policies that that privileged imports versus domestic production, 0:16:42.880 --> 0:16:45.880 and they nationalized things, and there was a lot of rhetoric, 0:16:46.640 --> 0:16:48.840 but they had they had the money. So so the 0:16:49.080 --> 0:16:53.240 these high oil prices really covered up a lot of things. 0:16:53.520 --> 0:16:56.600 Like if you look at everything now, nothing that's going 0:16:56.600 --> 0:16:59.760 on is really new. I mean, this is policies that 0:16:59.840 --> 0:17:01.960 the country has been doing for the past a decade. 0:17:02.280 --> 0:17:05.080 They've doubled down on some of them and and things 0:17:05.080 --> 0:17:08.120 have gotten worse. But this, you know, everything that's going 0:17:08.119 --> 0:17:10.440 on now was started with Chaves. The only difference between 0:17:10.520 --> 0:17:13.600 Chaves and Moduto was well one. Chaves was a little 0:17:13.680 --> 0:17:16.080 better liked by his supporters and maybe had a little 0:17:16.119 --> 0:17:21.080 more personality. But the current president, Nicolas Madutro, just doesn't 0:17:21.080 --> 0:17:24.920 have the money to cover up the problems that Chaves had, Right, Nathan, 0:17:24.960 --> 0:17:27.280 I wonder if you think, you know, in some ways 0:17:27.359 --> 0:17:30.440 Venezuela kind of squandered this opportunity when it had all 0:17:30.480 --> 0:17:33.960 these rich natural resources. You know, could have saved it 0:17:34.040 --> 0:17:36.600 up the way that maybe like a country like Norway does, 0:17:37.040 --> 0:17:40.560 but instead it ended up, uh you know, creating these 0:17:41.000 --> 0:17:44.480 big subsidies, ended up spending all that money instead of 0:17:44.480 --> 0:17:48.120 storing it for rainier days. Yeah. I think that's one 0:17:48.160 --> 0:17:51.200 of the thing why people and anyone who spent any 0:17:51.200 --> 0:17:54.719 time in Venezuela or covered Venezuela, you you really get 0:17:55.240 --> 0:17:57.520 almost addicted to the place. And I think one of 0:17:57.520 --> 0:18:00.000 the reasons for that is everywhere you look, you see 0:18:00.560 --> 0:18:04.240 just potential that you don't see anywhere else. I mean, 0:18:04.280 --> 0:18:07.160 besides the largest oil reserves in the world, this place. 0:18:07.720 --> 0:18:12.639 They have big mining resources, diamonds, gold minerals. It has 0:18:12.680 --> 0:18:16.959 the biggest Caribbean coastline in the world. You know, famous 0:18:17.040 --> 0:18:20.960 tourist destinations like case in the Caribbean and Angel Falls, 0:18:20.960 --> 0:18:23.520 the highest waterfall in the world, and and it's beautiful. 0:18:23.520 --> 0:18:26.159 And Caracas is a really pretty city. And you know, 0:18:26.240 --> 0:18:28.480 every day of the year the weather is about the same. 0:18:28.560 --> 0:18:31.000 It's high of seventy five and a low of sixty five. 0:18:31.080 --> 0:18:34.040 The weather is perfect. It's I mean, this place could 0:18:34.119 --> 0:18:37.880 could really be paradise, but it's obviously not. And it's 0:18:37.960 --> 0:18:41.800 kind of maddening to just look around and just see them. 0:18:42.040 --> 0:18:45.280 And it's only three hour flight from Miami. Geopolitically, it's 0:18:45.680 --> 0:18:49.119 in a very interesting place. So uh, you know, you 0:18:49.160 --> 0:18:52.920 really see just all this potential everywhere and and then 0:18:52.920 --> 0:18:55.720 you look at what's happening and it's kind of maddening. 0:18:56.480 --> 0:19:01.720 So Chavas died from his cancer and Mahuto, who was 0:19:01.800 --> 0:19:05.240 kind of his seen as his successor for a while, right, 0:19:05.400 --> 0:19:08.520 he came to power, and of course we've had the 0:19:08.560 --> 0:19:11.560 problems with the oil price which have exposed all of 0:19:11.600 --> 0:19:16.680 these issues. Now with the government policies, what is the future? 0:19:16.840 --> 0:19:21.320 I mean in December, the opposition one a majority in Congress, 0:19:21.359 --> 0:19:25.640 but they haven't been able to do too much with that, right, Yeah, 0:19:25.640 --> 0:19:28.800 we've seen after they won, Uh, they even got a 0:19:28.840 --> 0:19:31.680 two thirds majority, which they did better than they were expected, 0:19:31.720 --> 0:19:35.240 but they saw their majority kind of reduced by the 0:19:35.320 --> 0:19:38.720 Supreme Court. Right right after that election, Maduro put some 0:19:38.760 --> 0:19:41.240 more justices on the Supreme Court, they stacked it in 0:19:41.280 --> 0:19:44.960 his favor, and and and so one the Supreme Court, 0:19:45.040 --> 0:19:48.720 the National Assembly had its majority reduced. And then we've 0:19:48.720 --> 0:19:51.120 seen every initiative that they have passed has just been 0:19:51.160 --> 0:19:54.840 overturned by the Supreme Court. So they've really had their 0:19:54.920 --> 0:19:57.920 their hands tied. And in fact, recently the government has 0:19:58.200 --> 0:20:01.280 has said they're suing the Supreme Court or the National 0:20:01.280 --> 0:20:06.520 Assembly president for for trying to do too much, and 0:20:06.200 --> 0:20:09.479 and so they've really been under attack. We were starting 0:20:09.520 --> 0:20:13.440 to see the opposition demand a recall referendum on Maduro. 0:20:13.560 --> 0:20:17.000 That's kind of been the current focal point of activity. Uh. 0:20:17.040 --> 0:20:19.480 You know, right now, for instance, in Karakas, they're they're 0:20:19.480 --> 0:20:23.639 holding a big march and they're the government is shooting 0:20:23.640 --> 0:20:26.800 tear gas at the protesters. So um. But but that's 0:20:26.800 --> 0:20:30.480 what the opposition is calling for, is a recall referendum. 0:20:30.600 --> 0:20:33.679 Do you think there's going to be a coup? Um? 0:20:33.760 --> 0:20:36.800 You know, I don't think that's for me to to 0:20:36.960 --> 0:20:41.000 say um, you know, I think that that certainly is 0:20:41.040 --> 0:20:43.520 a heated word that that you see thrown around in 0:20:43.600 --> 0:20:47.760 Venezuela a lot that Maduro always accuses his his opponents 0:20:47.800 --> 0:20:50.560 of of plotting coups. I mean, the number of times 0:20:50.600 --> 0:20:53.000 I've seen Maduro on TV say there's a coup plot 0:20:53.040 --> 0:20:56.399 against me, I mean, it's it's it's in you know, 0:20:56.760 --> 0:20:59.639 many many hands to count that number. But you know, 0:20:59.680 --> 0:21:02.440 I think if you look at what a coup is, 0:21:02.880 --> 0:21:05.639 I mean, normally a coup comes from the military, and 0:21:05.640 --> 0:21:10.520 in Venezuela, the government is pretty much controls the military, 0:21:10.560 --> 0:21:12.840 and we've we've not seen a whole lot of signs 0:21:12.840 --> 0:21:16.560 that the military wasn't completely with the government. There's there's rumors, 0:21:16.600 --> 0:21:19.280 and there's some ex generals who come out and and 0:21:19.320 --> 0:21:22.040 say things, but overall it still looks like the military 0:21:22.119 --> 0:21:25.880 supports the government for now. But you know, that said, 0:21:25.880 --> 0:21:28.080 there have been lots of coups here in the past, 0:21:28.160 --> 0:21:32.800 so I don't think it would surprise anyone. But we 0:21:32.440 --> 0:21:34.840 we've seen the opposition come out and say that they 0:21:34.880 --> 0:21:38.240 don't want a coup, that that they want this recall referendum. 0:21:38.280 --> 0:21:41.399 They want they want the people to have a chance 0:21:41.520 --> 0:21:45.439 to express their will through democracy. So no one at 0:21:45.480 --> 0:21:48.280 least publicly in the opposition that you see, is advocating 0:21:48.280 --> 0:21:51.800 for a coup. But we will see what happens, right, 0:21:51.920 --> 0:21:54.880 And you know, Nathan, on top of all this, Venezuela 0:21:55.119 --> 0:21:57.720 is quite a bit of money to foreign countries, and 0:21:58.040 --> 0:22:02.480 there's been some nervousness about possibility of Venezuela defaulting on 0:22:02.560 --> 0:22:06.600 that debt. What's that situation looking like? Now, well, that's 0:22:06.800 --> 0:22:10.320 another really interesting question. And and you know, one it 0:22:10.359 --> 0:22:12.480 all goes back, I think to another reason why there's 0:22:12.920 --> 0:22:15.679 there's so much interest in Venezuela, and it's because of 0:22:15.720 --> 0:22:17.920 the debt. It's because of these bonds, and a lot 0:22:18.000 --> 0:22:20.920 of them are are traded on Wall Street so and 0:22:20.920 --> 0:22:23.879 and owned by by US funds. And and if you 0:22:23.920 --> 0:22:26.240 look at at the bonds, I mean by Petavisa, which 0:22:26.240 --> 0:22:29.199 is the state oil company or the sovereign these are 0:22:29.240 --> 0:22:32.440 bonds kind of backed in a way by the country's 0:22:33.000 --> 0:22:35.040 oil reserves at one point, which are the largest in 0:22:35.040 --> 0:22:37.399