How to Buy a Million Gallons of Gas for a Dollar

POITOU, FRANCE – The delusional, rock ’em-sock ’em, baroque news just keeps coming.

We laugh readily; but even we are having a hard time keeping up.

American Grifters

Forbes claims that our Secretary of Commerce, Wilbur Ross, may be “one of the biggest grifters in American history.” He stands accused, by a long list of former associates, of having ripped them off… getting away with as much as $120 million in ill-gotten gains.

The man is innocent until proven guilty, of course.

But in our experience, a businessman who leaves a trail of embittered partners or employees behind him is probably a scoundrel.

Speaking of grifters…

Tesla CEO Elon Musk says he is taking the Silicon Valley carmaker private. It loses money on each car it makes and tries to make it up on volume.

Then, as it produces and sells more cars, it loses even more money. So far, it is $11 billion in the hole… with almost no chance to get out.

So who’s going to put up $60 billion to take the company private?

No one! Not with his own money… Instead, Tesla is going down when the whole shebang goes down. Its distinction is that it will be one of the ones that doesn’t get back up.

Red Wave

Meanwhile, Tuesday’s primary election results show how the U.S. has degenerated… from Republic to Empire… from mind to heart… from big ideas to big personalities.

What, exactly, Mr. Donald J. Trump stands for is still in dispute. But it’s bad ju-ju to stand against him… at least in the Republican primaries.

CNN reports that every one of the last 14 candidates endorsed by the president won or has been leading (as of this morning, some results are still undecided).

As for Mr. Trump himself, he takes full credit in his recent tweet:

As long as I campaign and/or support Senate and House candidates (within reason), they will win! I LOVE the people, & they certainly seem to like the job I’m doing. If I find the time, in between China, Iran, the Economy and much more, which I must, we will have a giant Red Wave!

If only there were more hours in the day! We are sure he would be able to improve crop yields.

As far as we know, no president has ever added a single dollar to the economy. And we see no reason to think the man in the White House now will do better…

But Mr. Trump is a new phenomenon… capable of quickly sorting out any problem put before him.

Maybe he should turn his attention to Venezuela… after China, Iran, and the economy, of course…

Connoisseurs of Disaster

What becomes of a political system dominated by Trumpismo? We don’t know… But we can look to Latin America for clues.

As long-time sufferers of the Diary know, we are connoisseurs of disaster. Not natural disasters, which are unpredictable, but man-made ones.

It’s like watching a horror movie, where the poor girl knows there is a monster in the basement… but goes down there anyway. And Venezuela 2018 is shaping up to be a classic.

The trouble began in 1999, when Hugo Chávez was elected. Chávez was a “strongman” president – a big personality.

He led the country through one dopey policy after another… spending, spending, spending… until he was spent-out and died in 2013. Chávez’s successor, Nicolás Maduro, has tried to continue his policies and hold onto his power…

But it’s proving hard to do. A few days ago, there was apparently an assassination attempt against Maduro – by drone, no less.

Fingers pointed in all directions. Was it an inside job by military patriots, eager to get him out of the way before the whole country goes to hell? Was it the political opposition?

Some said it was an attack on Venezuela launched by Colombia. Some said it was just an accident… or that a military drone went out of control.

Or, was it another bungled attempt at regime change by the world champions?

When it comes to meddling in the affairs of foreign countries, the USA is clearly number one. And it was about this time last year that Donald Trump proposed an invasion.

But who knows?

Ragged Occurrences

In any case, we take no policy positions here at the Diary. But as to an invasion of Venezuela, we are solidly, completely, and undilutedly against it.

An invasion might interrupt the delicate fermentation needed to produce a quality disaster. Things take time; Rome wasn’t built in a day… nor was she destroyed in one.

Besides, an invasion hardly seems necessary. If regime change is the goal, just sit back and let disaster do the work.

Reports tell of increasingly bizarre and ragged occurrences throughout the country.

Already, inflation and price controls have combined to produce one of the most lunatic pricing errors we’ve ever seen. A single U.S. dollar will buy you 925,000 gallons of gasoline. From The Drive:

Venezuela has maintained its famous fuel subsidies that have long made it the cheapest place to buy gas in the world. […] While the price of basic goods has skyrocketed – AFP points out a single egg costs 200,000 bolivars – gas prices are still as low as the Mariana Trench. A liter of 91-octane gasoline costs just a single bolivar, while 95-octane fuel costs six.

Since hyperinflation has made the bolivar essentially worthless, there’s a strong black market for U.S. currency; a single dollar is now trading for 3,500,000 bolivars. And that’s how you get to a place where it’s possible to buy almost a million gallons of premium gas for a buck.

All we can say – and we say this with deep insincerity – is that we are grateful to Maduro and the Venezuelan people, to Trump and his fans, to Musk and his investors, and to Ross and his cronies… for putting on such an entertaining show.

Maybe we can learn something.

Regards,

Bill Bonner's Signature

Bill

Category: Economics

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