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Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Your word for the day, Mister Chavez, is ‘Fungible’

Fungible: Etymology: New Latin fungibilis, from Latin fungi to perform
: being something (as money or a commodity) one part or quantity of which can be substituted for another of equal value in paying a debt or settling an account – oil, wheat, and lumber are fungible commodities.

Hugo Chavez, the paleo-socialist who is working tirelessly to turn Caracas into Pyongyang, has threatened to cut off oil sales to the United States due to actions brought against the Venezuelan government in British, Dutch and US courts by ExxonMobil. Following the freezing of $12 billion in assets by a British court, Chavez said:

“If you end up freezing (Venezuelan assets) and it harms us, we’re going to harm you,” Chavez said during his weekly radio and television program, “Hello, President.” “Do you know how? We aren’t going to send oil to the United States. Take note, Mr. Bush, Mr. Danger.”

Chavez has repeatedly threatened to cut off oil shipments to the United States, which is Venezuela’s No. 1 client, if Washington tries to oust him. Chavez’s warnings on Sunday appeared to extend that threat to attempts by oil companies to challenge his government’s nationalization drive through lawsuits.

And your word for the day, Mister Chavez, is ‘fungible’.

If his intention is to sell Venezuelan oil to no one, he will push up the price to everyone, that much is true. And of course that also means he is cutting off the cash flow being used to finance the Glorious Bolivarian Revolution. Your call, El Presidente.

If on the other hand he intends to sell Venezuelan oil to anyone except the USA (and presumably the UK and Netherlands as well as they have also been crossed off his Christmas Card list), then… who cares? As oil is fungible, it just goes into a big global market and what does it matter if Venezuelan oil goes to China instead of the USA when all it means is that someone else’s oil will take its place?

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15 comments to Your word for the day, Mister Chavez, is ‘Fungible’

  • I thought it had something to do with mushrooms. Maybe it does…

  • Nick M

    Is Chavez Putin’s MiniMe?

  • CountingCats

    Is Chavez Putin’s MiniMe?

    Well, exactly.

    He is speaking to his local audience, big noting himself to his constituency while not actually doing anything that matters to anyone else.

    The man isn’t truly a buffoon, but he figures bluster appeals to those that matter to him.

  • squawkbox

    Unfortunately for Mr Chavez and fungibility, Venezuelan crude is particularly heavy and tarry, and most of the refineries capable of processing it are in the US. The US will have less difficulty buying crude from elsewhere than Chavez’ will have more difficulty selling it elsewhere.

  • David B. Wildgoose

    Squawkbox has already made the point I was going to.

    With enemies as stupid as this you know you are onto a good thing.

  • Ditto squawkbox on fungibility. The main effect of stopping the venezuelan tar shipments would be to reduce national income. This is big-noting for the benefit of the locals.

  • I thought you meant he is a fungus

  • I thought you meant he is a fungus

    Well, that too!

  • Frederick Davies

    Trying to explain economics to a Socialist is a bit of a waste of time, don’t you think?

  • Jacob

    The problem is not Chavez’ threat not to sell oil to the US, this is meaningless.
    But Chavez can do many things (like, say, nationalize some oil companies) that will have the unintended consequence that the oil (or part of it) will stay in the ground and not reach the markets at all.
    Other producers might decide that they have enough income, and intentionally reduce production to make their oil last longer.
    Others still, like Putin, might make some political demands on their customers in West Europe, and those customers will have to comply.
    A nasty world….

  • My wife is Venezuelan and over the years I’ve got to meet many of her countrymen – there’s a mini-diaspora in London, Madrid and throughout Italy of middle-class young people, usually with their parents blessing and their savings $$$ tucked into their suitcases.

    One of the most interesting chaps I have met was an ex-employee of PDVSA – ex because he was one of several thousand workers who went on strike and was subsequently sacked. He now works for a company in Germany that makes some sort of widgets involved in oil extraction – pneumatics or something or other. I’m no expert.

    Anyway, as he tells it, since PDVSA sacked half the workforce who actually knew what was going on, supplier companies have twigged that the new boys, Chavistas to a man, don’t have a clue. So the suppliers have raised margins – especially on maintenance contracts – helped by inside info from the sacked ones like the bloke I met.

    Apparently it’s bonanza time for companies like his.

    I pass this info on solely as I heard it. I make no comment as to the truth, or indeed the morality, of it. But it does show, I feel, that in the struggle between revolutionary socialism and capitalism, the rule of unintended consequences always comes to the fore.

    Venezuala, BTW, roxxors. If they ever get rid of Chavez I highly recommend a visit.

  • RRS

    I was going to stay out of this, but I am more concerned about an IMPORT that this kook may undertake (as I wrote to Mary Anastasia O’Grady some while ago):

    That is the import from Iran of mid-range ballistic missiles.
    If you draw the mid-range circle from, say, Carracas, North, see how far up into the U.S. and into what vital areas it reaches. The presently produced, and available for export weaponry of Iran (and N. Korea) is in the Mid-Range.

    If you think Cuba was a problem, remember, the Soviets kept control of the stations. The Iranians would be delighted if the conditions were “out of their control>.”

    Maybe NS is on top of this, but we sure don’t read much about it.

  • R C Dean

    That is the import from Iran of mid-range ballistic missiles.

    Meh. Let him waste more of his money.

    We’d put a few new firing solutions and maybe a couple of new mission plans in a drawer somewhere. No way Chavez could defend them. We just saw the Israelis make a laughingstock of the best air defense systems the Russians can put on the market, after all.

  • He might be assuming that the U.S. is run by nervous ninnies who will back down when confronted by anything that resembles a threat whether or not it is.

    He may even be right.

  • Paul Marks

    A good posting.

    Venezuela reminds me of some of the events in Ayn Rand “Atlas Shrugged” – as Jezb points out the thugs take over and find they can not make things work.

    They also find that waving their firearms about does not alter economic law – for example their price controls produce shortages.

    Sadly most people outside the country just see the swagger and hear the wild speeches – they do not understand that it is the principles that are wrong.

    For example, most people would laugh at the idea that Senator Obama and President Chevez are much the same.

    “Obama does not shout and enage in mad antics, he is so polite and well mannered, and he would never hurt anyone”.

    Quite so – but sadly his “understanding” of government and economics is on the same level as the “understanding” of Chevez.

    Government is there to provide nice things for the people – and economic law does not exist. To cite economic law is wicked “Social Darwinism”.