Definition of Capitalism: An inefficient and outdated way of getting rich

The politics sucked, the artwork was magical

It's a very cool time to be a middle-class Venezuelan dude. A little list as to why:

1) You can walk into the local Mercal store* and pay 30% less just like them proles do
2) There's the world's greatest selection of 18 year old single malt scotch whiskies on offer for your discerning palate.
3) You can spend your dollar salary on a brand new 4x4 and then pay about a squillionth of a dollar for the fuel to keep it running.
4) You get The Simpsons on cable TV at any time you want (and your favourite Fox News, too....I mean...that Cisneros channel just isn't the same these days, and you never really watched RCTV anyway, did you?).
5) Your standard of living is higher and inflation lower than it was under the previous administration**.
6) But the big bonus is you get to bitterly complain about your President at cocktail parties*** and everyone agrees with you!

But your caring "Fatherland, Socialism or Death" government still thinks you're being hard done by, so this week it has arranged to GIVE YOU FREE MONEY! In the latest cool deal, it is emitting U$3Bn in dollar bonds that you can buy with your funny little VEFs (strong Bolivar currency) and then do what you want with them. Here's a link in English.

And here's how the deal breaks down:

1) You sign up for the minimum buy of U$4,000 dollars' worth of bonds (or more if you're "friends" with the bank manager).

2) The offer price is at 115%, meaning you pay U$115 for every U$100 worth of paper.

3) You pay for the bonds with VEFs at the official exchange rate of 2.15 = U$1

4) So for U$4,000 of bonds, you pay 2.15 X 4,000 X 1.15 = VEF9,890

Then when you get your bonds, you can sell them next day at the parallel exchange rate, currently standing at 3.40 = U$1

U$4,000 X 3.4 = VEF13,600

Or in other words, you make VEF3,710. That's a 37.5% profit on U$4k.....handy, no? So we can expect this latest bonds issue to be oversubscribed about a thousandfold, the banks will make their normal killing, and once it's over the VEF parallel rate will spring back a bit...maybe to 3.6 or so. Here's a chart that shows what the parallel rate has done so far this year....

click to enlarge

....now that's an impressive recovery, and all thanks to a caring government handing over the oil revenues to the middle class and their bankers, rather than storing them into the state reserves.

But however this bonds thing finally goes down, the result will be that people with money make more money. And remember, if poor little rich guy on the street can make a good profit on U$4,000 of starting collateral, just think what the guys who organize the bonds emissions make.

What? Did you really think 21st Century Socialism was the same as that boring, grey, poverty stricken, drudgy, 20th century Soviet version? Who told you that?


*Well, what I really mean is "get your housemaid to walk into the ............"
**Undisputed facts that are rarely mentioned by the opposition. I wonder why.
***My mojito is better than your mojito