Hugo Chavez of Venezuela has been a big calling card for anti-liberal and anti-american ideology of late but it seems like his political fortunes are directly correlated to the oil price. As it rose so did his spending on socialistic and ideology inspired projects and his influence. As it now declines it seems inevitable the relationship will hold on the other side of the curve.

Indeed, it looks like a classical oil boom and doom scenario. He’s wasted billions of dollars of oil wealth supporting a campaign based in military thought and disdain for the US, and taken little heed of economics or consideration of the wisdom of saving such a windfall as nordic oil-producing countries have done. Such behaviour was easy when the country was awash with liquidity and the citizens distracted by both that and social spending. Unfortunately it also perpetuates long term poverty since such windfalls delay reform and encourage this cycle of self-destruction.

I therefore doubt if the oil price goes to $30/barrel whether he can sustain both the current round of social spending and the latest round of his ‘Latin-American revolution’. His own people might not be so happy then, especially if he continues to focus on ‘exporting revolution’ and ignore brewing socio-economic trouble at home.

See you all at the next round of ‘Latin-American Revolution’ I guess.