Socialism's Utopian Dream: The End Product Coming To EU/US

We know why the U.S. and EU are being led down this destructive path. It isn't necessarily the current administration, but those who continue to vote for socialism and the MSM for its worship of progressivism socialism.  Facts can be 'inconvenient' and difficult to deal with - but facts are still facts after all and completely unavoidable. It's too bad we can't learn from history:

Venezuela On The Edge Of Collapse

Have the people of Venezuela finally tired of Chavismo now that Hugo Chavez is no longer around to front it? Frustrated by the collapse of their economy, Venezuelans have poured into the streets of Caracas to protest — and an armed gang of motorcycle vigilantes shot up the crowd:

Armed vigilantes on motorcycles attacked anti-government demonstrators in Venezuela on Wednesday, setting off a stampede by firing into crowds as the biggest protest against President Nicolas Maduro’s year-old administration turned violent. Three people were killed.

Chaos erupted in downtown Caracas when the gang roared up and began shooting at more than 100 protesters who had been sparring with security forces at the tail end of heated but otherwise peaceful protests organized by hard-line members of the opposition. Most of the roughly 10,000 participants in the demonstrations had already gone home.

As people fled in panic, one demonstrator fell to the ground with a bullet wound in his head. Onlookers screamed “assassins” as they rushed the 24-year-old marketing student to a police vehicle. He was later identified by family members as Bassil Da Costa.

Also killed was the leader of a pro-government 23rd of January collective, as militant supporters of Venezuela’s socialist administration call themselves. National Assembly President Diosdado Cabello said the “revolutionary” known by his nickname Juancho was “vilely assassinated by the fascists” but he didn’t provide details.

The troubles moved eastward to the wealthier neighborhood of Chacao after nightfall, leaving another unidentified demonstrator dead from a bullet wound, district Mayor Ramon Muchacho said via Twitter. Calm returned as midnight approached, leaving smoldering trash cans strewn along several blocks where demonstrators threw rocks at government buildings.

There hasn’t been much coverage of these events by the US media of these protests, or of Venezuela’s economic collapse. CNN’s coverage of the shootings in Caracas notes that Maduro alleged that the protests were a “coup,” but otherwise mention little about the economic conditions in the country.  Neither does the Associated Press report at the Post, other than to note the “inflation-plagued economy [and] worsening crime,” which makes it sound like the Jimmy Carter administration.

The truth is much worse than that, as Stephanie Nolen reports for The Globe and Mail in Canada:

In the serene private clubs of Caracas, there is no milk, and the hiss of the cappuccino machine has fallen silent. In the slums, the lights go out every few days, or the water stops running. In the grocery stores, both state-run shops and expensive delicatessens, customers barter information: I saw soap here, that store has rice today. The oil engineers have immigrated to Calgary, the soap opera stars fled to Mexico and Colombia. And in the beauty parlours of this nation obsessed with elaborate grooming, women both rich and poor have cut back to just one blow-dry or manicure each week.

Venezuela, the world’s fifth-largest oil producer, is a leading candidate for next collapsed state. …

Inflation is running at over 50 per cent, a raging black market buys dollars at more than 10 times the official rate, domestic industry has all but shut down; there are critical shortages of many consumer staples, including corn flour for arepas, the national breakfast. TV stations – now all state-controlled – are full of ads that alternately denounce capitalism or show square-shouldered actors talking about how they don’t hoard and buy only what they need. Billboards boast of how socialist Venezuela has never been stronger; yet almost no one has toilet paper in their bathrooms.

The apocalypse hasn’t come yet. “The crash never comes because Venezuela has an insurance other countries don’t have – one of the largest oil reserves in the world,” said Jorge Roig, president of the Federation of Chambers of Commerce. Venezuela’s economic indicators defy logic, he said, but the international thirst for oil has postponed the day of reckoning.

Except that, as Nolen reported earlier in the week, the oil industry in Venezuela is slowly collapsing, too:

When Venezuelan oil minister Rafael Ramirez recently announced an ambitious new target of six million barrels per day by 2019, the state-run press heralded the imminent expansion of an industry vital to the country’s health.

But people here heard the news and rolled their eyes. After all, the last five-year plan had a goal of 5.8 million barrels a day by 2012, only to finish last year at just 2.9 million. That’s down from 3.2 million back in 2005.

In fact, the last time Venezuela’s oil industry productivity per employee was this low was 1940.

There is open speculation about how long Petroleos de Venezuela SA (PDVSA) can carry on, even at its current depressed level. There is little faith in the official data put out by the firm – whose senior managers are now mostly political appointees. And rumours are circulating about accidents, breakdowns and critical shortages of even the most basic supplies needed to run the business.

Before Chavez, Venezuela was a successful petro-state with a significant middle class and stable economics. Then Chavez created a command economy, expropriated private property, and ruled by whim for most of his term as president/dictator. He managed that through brute force and a cult of personality, but his successor only has brute force to use.

This could get ugly quickly. Perhaps the American media might get interested in this story sometime soon, enough to report not just when the bullets fly, but why Venezuelans are marching in the streets and their government is at least tacitly allowing violence to drive them off. At least Canadians know what’s going on in Venezuela.

Update: Fausta Wertz sees a little more interest in the American media today, but not much. She’s not optimistic about Venezuela’s future, either:

An arrest warrant has been issued for opposition leader Leopoldo López.

Unless a sizable fraction of the military actively backs the opposition, I expect a new era of repression in Venezuela, so I’m not optimistic.

Keep Fausta on your reading list for her focus on Latin America, too.

And more information is coming out regarding the EU's pending confiscation of private money, brought to us by the EU socialists:






Europe Considers Wholesale Savings Confiscation, Enforced Redistribution

At first we thought Reuters had been punk'd in its article titled "EU executive sees personal savings used to plug long-term financing gap" which disclosed the latest leaked proposal by the European Commission, but after several hours without a retraction, we realized that the story is sadly true. Sadly, because everything that we warned about in "There May Be Only Painful Ways Out Of The Crisis" back in September of 2011, and everything that the depositors and citizens of Cyprus had to live through, seems on the verge of going continental. In a nutshell, and in Reuters' own words, "the savings of the European Union's 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis, an EU document says." 

What is left unsaid is that the "usage" will be on a purely involuntary basis, at the discretion of the "union", and can thus best be described as confiscation.

The source of this stunner is a document seen be Reuters, which describes how the EU is looking for ways to "wean" the 28-country bloc from its heavy reliance on bank financing and find other means of funding small companies, infrastructure projects and other investment. So as Europe finally admits that the ECB has failed to unclog its broken monetary pipelines for the past five years - something we highlight every month (most recently in No Waking From Draghi's Monetary Nightmare: Eurozone Credit Creation Tumbles To New All Time Low), the commissions report finally admits that "the economic and financial crisis has impaired the ability of the financial sector to channel funds to the real economy, in particular long-term investment."

The solution? "The Commission will ask the bloc's insurance watchdog in the second half of this year for advice on a possible draft law "to mobilize more personal pension savings for long-term financing", the document said."

Mobilize, once again, is a more palatable word than, say,confiscate.

And yet this is precisely what Europe is contemplating:

Banks have complained they are hindered from lending to the economy by post-crisis rules forcing them to hold much larger safety cushions of capital and liquidity.

The document said the "appropriateness" of the EU capital and liquidity rules for long-term financing will be reviewed over the next two years, a process likely to be scrutinized in the United States and elsewhere to head off any risk of EU banks gaining an unfair advantage.

But wait: there's more!

Inspired by the recently introduced "no risk, guaranteed return" collectivized savings instrument in the US better known as MyRA, Europe will also complete a study by the end of this year on thefeasibility of introducing an EU savings account, open to individuals whose funds could be pooled and invested in small companies.

Because when corporations refuse to invest money in Capex, who will invest? Why you, dear Europeans. Whether you like it or not.

But wait, there is still more!

Additionally, Europe is seeking to restore the primary reason why Europe's banks are as insolvent as they are: securitizations, which the persuasive salesmen and sexy saleswomen of Goldman et al sold to idiot European bankers, who in turn invested the money or widows and orphans only to see all of it disappear.

So, aside from all this, Europe is "fixed."

The only remaining question is: why leak this now? Perhaps it's simply because the reallocation of "cash on the savings account sidelines" in the aftermath of the Cyprus deposit confiscation, into risk assets was not foreceful enough? What better way to give it a much needed boost than to leak that everyone's cash savings are suddenly fair game in Europe's next great wealth redistribution strategy.