More Instability In Venezuela

Hugo Chavez Rally

Bank Tries to Allay Fears of Instability in Venezuela -- New York Times

CARACAS, Venezuela — The central bank sought on Friday to calm fears of faltering banks a day after President Hugo Chávez unexpectedly announced the nationalization of a large Spanish-owned bank, his latest effort to intensify state control over the economy through takeovers of private companies.

The nationalization of the bank would extend to the financial sector a series of takeovers, which Mr. Chávez initiated last year, in industries including oil, telecommunications, electricity and steel-making.

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Iranian missiles in Venezuela a reality? -- Fausta's Blog

The Iranian Revolutionary Guard are actively

collaborating extensively and secretly in the field of missile technology transfer to Venezuela

The National Council of Resistance of Iran Foreign Affairs Committee explains (emphasis added),

During the past 5 years, the Iranian regime has established extensive military and political relations with Venezuela, with its investments in that country totaling roughly 10 billion dollar [sic). Mullahs’ former president, Mohammad Khatami, and their current president Mahmoud Ahmadinejad, have each traveled to Venezuela twice, while the Venezuelan president, Hugo Chavez, has also reciprocated with his own trips to Tehran on a number of occasions. In addition to the political and economic relations, in February 2008, a security pact was signed between the Iranian regime and Venezuela, which has thus far remained unannounced.

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My Comment: Both stories are revealing the levels to what Hugo Chavez wants on the domestic and international scene. Domestically, he wants to completely control Venezuela's banking and financial markets. Through their equivalent of the Federal Reserve he already controls the money supply, nationalizing banks will result with him controlling the retail end of money. The idea that governments are better managers of money than bankers flies in the face of what is most people's experience with this type of government intervention in Latin America .... I strongly suspect that Venezuela will suffer the same dreadful financial fate. Expect people to start emptying out their bank accounts in the next few weeks, as well as their safety deposit boxes.

On the international scene the situation is far more dicey. The installation of Iranian missiles on Venezuelan soil opens a can of worms that will create a real international crisis. Iranian sponsored terrorist groups have already targeted and killed scores of Americans, and there is no reason to believe this will change in the foreseeable future. Everyone agrees that Iran's development and (probable) future successful testing of its nuclear weapons will raise the stakes even higher. In the event that their missiles are placed in Venezuela .... with a nuclear arsenal to boot .... this will make this environment a clear and present danger to the safety of the United States.

Will Hugo Chavez do this? I do not know. But considering that his term in office will be expiring in a few short years, I will not be surprise that he will try his best to generate an international emergency that will justify his staying in power indefinitely. The Castros of Cuba, Robert Mugabe in Zimbabwe, the mullahs in Tehran .... it is all about power and keeping it till they die. We should not be surprised if Hugo Chavez and his backers will be trying the same thing.