Vigilant Investor

Venezuelan President Hugo Chavez is making a move to nationalize the nation’s idle precious metals and diamond mines. Of course, many of these fields include those awaiting permits from the government, so it is not as if all were unwanted.

This won’t bode well for those companies doing business in Venezuela, nor encourage future private investment into the increasingly collectivized economy. Already Chavez’s policies on oil are leaving the nationalized oil infrastructure failing as he sells the product below market prices in an attempt to win support. That difference in price means nothing is left over to update and upkeep the aging infrastructure.

While it may be popular for those more interested in pandering to popular socialism, such policies are a recipe for economic disaster. Yet politicians in the U.S. are pimping policies that, while not formally nationalizing the industry, would exact retribution on oil companies and consumers simply because the economic environment is demanding a higher price for oil related products. Yet the very policies of Congress - directly and indirectly - are a large cause for why the prices continue to go up. But that does not stop some in Congress from wanting to further confiscate revenue from oil related sales so that Congress can redistribute the booty to their own constituencies as a way to earn votes.

That’s not so different from Chavez, and vigilant investors are taking note.

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