Chavez Closes Banks- What's next?

On Monday, Chavez shut down four banks for “financial irregularities”. Two of the banks, Canarias, and ProVivienda have been closed permanently and their assets will be sold. Together the four banks formed 5.7 % of the banking sector when they were taken over on November 20^th by the Venezuelan government. Is this another step towards complete nationalization?

On Sunday during Chavez’s “Hello President” talk show he said that he would nationalize any banks, which will not lend to the poor or help Venezuela’s development.

In his usual rhetoric he warned: "I'm telling the private bankers, 'he who slips up loses', I'll take over the bank, whatever its size."

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In Times of Domestic Crisis Venezuela Buys Military Equipment

December 1^st – With the help of Russia, Venezuela will build a factory to manufacture Kalashnikov AK-103 assault riffles andalso purchase military helicopters. These military purchases are a part of an agreement signed this August 15^th.

Russia’s ambassador to Venezuela, Vladimir Zaemskiy has in addition stated that replacing military equipment was a “natural process of any country”, and that Venezuela is “guided by a new concept of national defense” most likely referring to Venezuela’s and Colombia’s tense relations over the U.S military bases in Colombia which will allow for military and spy operations across South America.

Russia and Venezuela also have companies working together to exploit oil and explore natural gas but their military agreements are increasing and since 2005 Venezuela has bought $4.4 billion of military equipment from Russia as well as a $1 billion loan that Russia has given to Venezuela all for military equipment.

The question is, why isn’t Chavez trying to improve Venezuela’s domestic problems at a time when his popularity is decreasing? Perhaps it is because this way he is distracting the world and Venezuelans from the real problems.

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