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Venezuela Economics 101: When supply is high, raise prices

Venezuela’s President Maduro wants to raise oil prices to $70 – and fast. His plan, announced on Venezuelan television this week, is to somehow stabilize oil prices despite weak demand and near record production from Saudi Arabia, Russia, and Iran over the past several months. Maduro has a phone and he is using it (when the electricity works) to call every OPEC oil minister and some non-OPEC oil ministers to talk about cutting production. Not only is this strategy going to fail (the most important producing countries are not incentivized to freeze or cut production now), but Venezuela’s oil problems run much deeper.

I’m amazed that the people of Venezuela, many of whom are on the brink of starvation, haven’t stormed Miraflores Palace and torn Maduro and the rest of his administration apart.

Saudi Aramco has also invested billions of dollars [of US money] in infrastructure, technology, and personnel to make its operations as efficient as possible.

There’s a reason Venezuela can’t feed it’s people, but a few wealthy families can make millions off their oil. They could make billions, but those pesky “dictators” want things like money for the whole country, and they won’t play ball with the US billionaires.

Wall Street Economics 101: when you hand out mortgages to prospective homeowners who can’t afford them, and then things crap out and you’re about to go out of business as is the Rule in a capitalist system, work a back room deal with the Legislators you own and get bailed out with socialist public money.