SPECIAL REPORT: Is The US About To Invade Venezuela? | Mario Braga, RANE
Summary
Venezuela Opportunity: Discussion of a potential $1.7T, 15-year rebuild with a pro-business transition plan focused on restoring rule of law and investor confidence.
Oil & Gas: Venezuela’s 303B barrels of proven oil reserves (17% of global) and large gas endowment make energy the core prize if regime change unlocks access.
Chevron (CVX): The Chevron license saga was detailed, including suspension and selective reinstatement under strict terms, with potential further tightening highlighted as a policy lever.
Venezuela Bonds: Bond dynamics were covered (2017 default, ~$160B to restructure, prices moving from ~10–15 to ~30 cents), signaling rising investor optimism on change.
Extractive Sectors: Beyond oil and gas, mining (gold, diamonds, rare earths) was flagged as a major component of the plan, though dependent on security and institutional rebuilding.
Geopolitical Path: The U.S. buildup suggests escalated strikes on cartel-linked assets to pressure regime change without an unpopular ground invasion.
Sanctions & Policy: Existing sanctions on oil, mining, and banking remain pivotal; Chevron’s license and broader Treasury actions were emphasized as key economic pressure tools.
Transcript
Venezuela has the largest proven oil reserves uh globally around 17% of the oil reserves are there about uh 303 billion barrels. So that's not something we can ignore. Of course it has also the eighth largest natural gas reserves in addition to mineral riches. So from gold to diamonds and including now to rare earths. The US views the western hemisphere as an area, a natural area of influence of the United States. So it's important to the Trump administration that China, Russia, Iran do not have like a free pass to be present in the continent. Welcome to Thoughtful Money. I'm its founder and your host, Adam Tagert. At the time of this recording, tensions are high between the US and Venezuela. American warships have been deployed off Venezuela's coast. Speculation of a US-driven regime change to oust Venezuelan President Nicholas Maduro is all over the headlines. And just a few days ago, US officials told Reuters that the United States is quote poised to launch a new phase of Venezuelan related operations in the coming days. So, how did we get to this boiling point? What's most likely to happen from here? And what would the geopolitical and economic implications of regime change in Venezuela be? For perspective in this thoughtful money special report, we're fortunate to be joined today by Mario Braa, Latin American geopolitical analyst for RAIN. Mario, thanks so much for joining us today. >> Thank you, Adam. It's my pleasure to be here. >> All right. Well, look, I very much appreciate you doing this. We've done this uh in the past with some of your colleagues to give us kind of real-time insights for other uh conflicts that have gone around the world, most notably in the Middle East. Very much appreciating you coming here um upon request to do this for us uh in Venezuela here. Um so Mario, if you can um let let's start just kind of by leaning back for a second here. Um set the table for us like what is the history of the bad blood between the US and the Maduro regime? Sure. I think when we think about Venezuela, uh the thing that comes to many people's minds is Chaveis Maduro, this socialist autocracy that came to be. But it's important to take a step back and understand uh how they came to power and then how the dynamics between Venezuela and uh the US changed over the past decades because basically Venezuela uh after gaining independence and I promise I'll not make this into a Venezuelan history class but that's okay until the 1950s uh and then in 1958 there is the Punto FIHO pact. main three political parties agree to respect election results and then Venezuela has a democratic period starting in 1958 but of course with these political arrangements they they become fragile at some point they stop working and with Venezuela of course oil prices had a lot to do with that so when we come to the late 80s and early 90s that's already crumbling down crumbling down and that's basically when Ugo Chaveis who then was a career military officer who had already founded a Bolivarian militia within the army. In 1992, he tries to stage a coup to get to power. He does not succeed. He's arrested and then one can think, well, that's the end. He's in jail. He's not coming back. But that's not what happens because a couple of years later he's pardoned and he became this voice for the dissatisfaction that there was within Venezuelan society with the existing uh political establishment. So in 1998 he gets to power via democratic norms. He's elected and he comes to power with a very ideological approach to to governing. So he he declared himself Marxist. So he sees the US and labels the US as a imperialist uh regime. Uh and then he starts to turn Venezuela uh from what used to be kind of a regular Latin American democracy of course with corruption with many issues but he makes a lot of constitutional changes and he grows increasingly auto autocratic over the years by relying on the large oil reserves that he had. So cash handout, social program, social benefits to have this popular support. At the same time when he's deteriorating the country's institutions, uh the kind of electoral rules, he he managed to uh kind of hold sham elections to remain in power. And that works especially uh in the 2000s on the back of the uh commodities boom that was mostly driven by China. uh and because of high oil prices, Venezuela has uh high uh revenues and he manages to to establish this uh very well uh structured apparatus. The thing is that when we turn to the 2010s, the economy is not doing so well. The oil prices are not that high. The revenues start to decline and then uh Chavez passes away in 2013. So he had appointed by then Maduru to be um like his successor. So when Maduro comes to power the situation is different and then he he struggles to to keep the uh regime going as it was before. Uh you start to see protests against the sham elections. Because of that there is more repression. There is uh the exodus from the country. The it's the kind of the most severe humanitarian crisis uh in the western hemisphere. uh 8 million Venezuelans have left the country and and then I think from there we get to the point where we are now that we had in the first Trump administration the US step up in pressure against Maduro trying to house him uh after that during the pandemic the Biden administration trying to re-engage trying to see a diplomatic way out and now during the Trump second uh Trump second term you have an even kind of increased pressure resorting to the milit military buildup that we are seeing off the coast of Venezuela. >> Okay. So, um I I'm no expert on this, so I'm so glad you're here. um from a uh administration viewpoint from from what I can tell from you know the headlines is um they don't like the Maduro regime because um you know you can make a human's rights case right which is hey we just you know don't think you're you mentioned a big humanitarian crisis there that's been going on for a long time um but it's hey um you know a lot of the illegal immigrants that came in uh especially during the Biden administration. A lot worse from Venezuela. Um totally understandable seeking a better life here than than what they were able to get there under Maduro. Um but uh President Trump accurately or not, curious if you have a thought on this, um has said, "Hey, you know, Venezuela is actually kind of pushing people on us and in particular, it's it's clearing out its prisons and it's insane asylums and it's kind of sending us kind of the dregs of the c their country and dumping it on the US." So there's that claim. There's the other claim that that Venezuela has become sort of a narco terrorist state and uh is um you know pushing drugs into America that are killing Americans. And obviously one of the things that the administration has dialed up recently is is you know hey we're just going to start blowing up you know watercraft that we see starting to leave Venezuela to hopefully you know make them think twice about doing that. Um, so there all those are the negatives that a that a regular person like me is hearing kind of against Venezuela from our current administration. I've got to assume too that that beyond just out of the goodness of its heart and trying to improve the situation there for Venezuelans uh Venezuela's suffering citizens that the the administration is also and this isn't I don't think unique to to Trump but the America government is also really hoping for regime change in Venezuela to get somebody who's a lot more America friendly and can unlock the ability of of America and other western countries ries to tap the vast riches in in Venezuela, oil being a huge one, um, and having everybody make a lot more money than they're making right now. Is that a pretty accurate summation of the pros and the cons, or is there more to the story than what a regular guy like me gets? >> Yeah, definitely. As you laid out, uh, Venezuela, I think, ticks a lot of the boxes when you think about US foreign policy priorities, especially for the Western Hemisphere, and what the Trump administration has put out as its kind of even from the during the campaign as its priority. So, you're right. When you talk about migration, drug trafficking, democracy in the in the hemisphere as well. But when we look at the Venezuelan case, I think we need to also take a step back and see um why it's so strategic and why it's so relevant in that regard, especially to the Trump administration. Because when we think about the drug trafficking angle, for example, Venezuela is not a country that produces drugs. The main cocaine producer is Colombia. and the fact that Venezuela has a very poorous border with Colombia and that Venezuela has a large Caribbean coast that uh what happens is that it has become a transit country and what happens is because of increased oversight in Colombia over the past decades including Plan Colombia or the US partnership what drug traffickers started to do is that it's easier for them to carry the drugs to the Venezuelan side of the border and then from Venezuela traffic the drugs either by plane uh the vast majority of the drug that is trafficked via aerial routes come from Venezuela. So they go to uh kind of these clandestine air strips in the middle of the jungle or even some military bases that we can dive into a bit later on on the role of that military from Venezuela plays into drug trafficking and then they take to Central America to southern Mexico and then that cocaine is is smuggled into uh the US. So there is that drug trafficking uh angle. >> All right. Sorry. So just to make sure I'm clear. So it's really more Colombia is the producer but Venezuela is the distributor. >> Yeah. Venezuela works as this so to speak logistic hub, right? So from Venezuela because uh we can we can see uh when we think about just the like this uh November 24th the US designated the cartel de los Solis as a terrorist organization a foreign terrorist organization. But we need to understand what is the cartel de loles the loss like cartel of the suns and that was one of the badges that the generals in Venezuela use in their uniforms. So that was the informal way in which Venezuelans referred to corrupt uh army generals or military officials those that were involved in illegal activities including drug trafficking. They were like informally referred to as the cartel de loses. So it's not a a an organization as we have for example tendagua which is uh uh a cartel from from Venezuela or even the Nalua cartel or or al-Qaeda for example if you're trying to think about terrorist groups more broadly in which there is a clear structure. What happens in Venezuela is that Maduru runs an autocracy and he needs the support of the military to remain in power. Right? he cannot rely on the votes. We saw the July 2024 election that uh the evidence shows that he lost by 3 to1. Uh there have been increasing protests. So if he cannot rely on popular support or on democratic norms, he needs to rely on the uh armed forces and the security apparatus to retain that support. What he has done is he has appointed between 2,00 and 2500 army generals which is a incredibly high number for any standard especially in a country like Venezuela uh that doesn't have such a well-developed armed forces for example and the reason why he has done that is that beyond the or the prestige or the salary that they could benefit many of these generals are involved in the legal activities ities inside Venezuela including drug trafficking. So when you look at some of the uh our air bases or some other military assets or even ports, they are what we call as dual use. So they can be a front that is from the Venezuelan armed forces, but they are also used by drug traffickers as I said uh because there is uh the kind of the agreement or the the kind of consent from the government in Venezuela to allow these drug trafficking activities. So that's why Venezuela has become this uh important hub for drug distribution that is produced not only in Colombia but also Peru, Ecuador uh and of course there are other routes that go through Brazil, they go through Gana but Venezuela is a major hub in that regard. So from the drug trafficking perspective of course that is a connection. Then as you said when we think about the economy uh Venezuela has the largest proven oil reserves uh globally around 17% of the oil reserves are there about uh 303 billion barrels. So that's not something we can ignore. Of course it has also the eighth largest natural gas reserves in addition to mineral riches. So from gold to diamonds and including now to rare earths and that's important as well. And I think something that you did not mention, but we also need to take into account is the geopolitical alliance and the alignment of Venezuela and why that is so important not only to the US but specifically to the Trump administration because during the 2000s when Ugavis was in power and I said that uh he was leveraging the large oil reserves and he had a very anti-western anti-US rhetoric. he became a very close ally with Russia for example. So back then Chavez built one of the most sophisticated air defense systems in Latin America purchasing Russian weaponry. Uh then of course uh all the commodities trading close ally to China. Uh China at some point uh loaned uh provided a lot of funds to Venezuela as well. So Venezuela became a hub for interests that not only uh were not aligned to those of the US but to some extent oppose those those of the US. So Russia, China and also Iran. And that's something that when you have an administration that is reassessing the role of the US internationally in other uh parts of the world to the Middle East, Southeast Asia, the role with China, even uh the willingness and capacity to cooperate with Europe and Ukraine. The Trump administration is shifting that focus back to the Western Hemisphere. And this is what has been called the Monroe Doctrine 2.0 which is basically the western hemisphere is like the US views the western hemisphere as an area a natural area of influence of the United States. So it's important to the Trump administration that China, Russia, Iran do not have like a free path to be present in the continent. And then of course when we think that the secretary of state is Marco Rubio who is of Cuban descent who has a very strong position against leftist autotocracies in Latin America. Of course we're talking about uh Cuba. Uh we're also talking about Nicaragua. But then Venezuela also becomes an important player because Cuba and Venezuela help each other out. Uh so a way to bring down the Cuban regime is also uh is directly linked to uh bringing down uh the Venezuelan regime. So so all of these uh different drivers, they play a role in making Venezuela so important specifically to the Trump administration. >> Okay. Okay. Thank you. And thanks for adding the piece of the puzzle in terms of the geopolitical alliances with sort of America's, you know, enemies. Um the folks that aren't on team America. Um, I'd meant to ask you about that and just didn't. So, I'm so glad you brought that up here. Um, okay. So, let me ask you this. Um, so if if Maduro were to be removed and and we'll talk in a moment about the ways in which that might happen. But let's just let's just assume for a moment that the US somehow successfully affects regime change here with Maduro. um what's what's likely to happen from a governance standpoint like who is likely to step in are are we are we likely to get an opposition leader come to come in who's much more west friendly and I think we all learned one of their names I can't remember her what her name is but but because she won the Nobel Peace Prize last month >> Machado she's the most prominent figure from the opposition indeed >> okay so you know is the country just sort of looking for Maduro to get out of the way so they can put somebody like her in or if Maduro to be would be removed, would we likely just get a Maduro 2.0, you know, the the the next successor in the Chevz line? Um what's more likely there, do you think? Yeah, that's the the big thing is the first part of your question that it really depends on how this process evolves and if we get uh a decapitation of the regime or even some sort of agreement that includes an asylum either not only to Maduru but to the kind of his inner circle and then we would have room for the opposition uh to take office. uh but if not there are some people who claim that a way out and uh that could be peaceful would be what they are calling Madurismo without Maduro. So Madur is out he goes to asylum he leaves Venezuela but the structure remains in place and then we could have one of his four closest allies taking office. I think this is unlikely but just to have in mind who this people might be. talking about Dio Caveo which is the interior and justice minister. We're talking about Vladimir Padrino Lopez who is the defense minister. We're talking about Dulce Rodriguez who is the vice president and oil minister and her brother Jorge Lopez who is the president of the National Assembly and some sort of a power broker uh in uh in Venezuela. So this is his inner circle. If we see some sort of um kind of agreement or deal that includes Maduro leaving the country but the structure remaining in place, these would be among uh probably the people that would retain part of the power. But even in that scenario, I think we can anticipate some sort of struggle, internal disputes, other generals perhaps parts of the military trying to take over. So I think any scenario when we talk about uh removing Maduru is uncertain. If we are talking about a scenario in which Madur is removed but also the higher uh rankings of both the government and the military because we need to have in mind that for decades now uh Chavez and Maduro they have purged the military to an extent that uh the regime can be called like coupe proof in this sense that they really have only loyalists uh >> it's all their buddies. Yeah. at this point. Yeah. >> Exactly. And and and then of course we're, as I said before, you have generals running uh like drug trafficking, but you also have generals appointed to keep positions in the country's um state-owned oil company, for example, PD Visa. So, and across of course the government and across other institutions. So uh in a scenario in which you you have the opposition coming to power and trying to govern they would really need to do a very comprehensive work of reinstitutionalizing the country. But in that scenario, I think the most likely we could have the results of the July 2024 presidential election being uh respected, so to speak, because in July 2024, Venezuela voted for president and Maduro claimed he won without showing any proof. But what happened was that the opposition was very well prepared for what they expected to be a sham election. And as you mentioned, Maria Korina Machado, who is this leader, she was barred from running, but she had a candidate uh kind of stepping in for her who is Edmundo Gonzalez Orutia and he won. and they were able to show the tallies of the ballots showing that he won nearly with like more than 70% of the vote and he was uh acknowledged and recognized as president-elect even though he did not take office. So we could have him returning to Venezuela. He's now uh in exile in Spain. He would probably be uh the head of of government. uh he would be like the the president in but the power the de facto power I think would most likely rely with Maria Machado because not only she has the charisma and the popularity but she has been already engaging with the international community with investors with the private sector she's doing what we could call even as road shows she has uh laid out and we can uh get into detail later but uh like what would a transition position period look like? What would a 15-year investment plan for Venezuela look like? So, she's trying to really come up with a case that there could be an orderly transition and she would probably be the one calling the shots regardless of her position, say interior minister, vice president or or anything in those lines. So, I think these are the main names uh to watch when we think about the transition in Venezuela. >> Okay. So, how how do you see that latter option being affected where the the current power structure in Venezuela agrees to say, "All right, you know what? We're going to let those those election results stand and we're going to leave and we're going to let Machado and her whole team come on in." do you see any way that that could happen diplomatically or is that something that's going to need like military intervention on behalf uh of of America? >> Yeah, that scenario for us is one of the most uh unlikely ones and there are some reasons for that. uh as I said before we are not just talking about Maduru and say five close uh allies or advisors that run the the whole regime. Now we talking about hundreds of people both from the kind of the political side within the government but also within the armed forces that are involved in uh illegal activities from as I said drug trafficking but also human rights abuses uh and other sort of violations that if the regime collapses, if Madur is out, they would highly likely face charges either in Venezuela or in the United States or both or face prison time. So there is a lot of pressure within the government uh to avoid a negotiated solution because the number of people that would not be contemplated with some sort of benefit some uh asylum somewhere and go live uh in Russia or Cuba but would instead go to jail is very large. So this is one of the constraints that we see uh for why a peaceful and orderly transition is unlikely and even if like working on the hypothesis that that happens. As I said before, you still have a large number of people that have been appointed uh by Maduro by Chavis over the past decades that are loyalists including within the armed forces that they could resort to some sort of uh internal armed conflict. They could hide in the country's uh jungles, the mountain regions, or even within karakas, the large cities, and resort to sabotage campaigns or try to assassinate new officials. they can really make it hard for the new government not only to uh exert power but even to instill confidence because when we talk about what we can expect for a transition and for what investments may look like. It will be very critical that the new administration is able to convince investors that not only it is committed to change to rule of law to welcoming the private sector again but also that it has the ability and the control to to rule over the country to to govern properly. So, I think that that's why it's so uh unlikely and so hard to to see a scenario in which you have um the opposition coming in and we just have uh like kind of a so-called velvet revolution as we saw in the Czech Republic for example. >> Yeah. Okay. So, let's talk about what's going on right now. So, I've mentioned a couple of times that the US has um, you know, sent a lot of warships near and around Venezuela and we're doing these, you know, targeted missile strikes to suspected drug crafts they're leaving. What exactly is going on there? And, um, I I guess from a um, do you do you see the US as trying to drive aggressively regime change there? And if so, how is it doing it? You know, if the military is the stick, hey, you know, you better do something because we've got all this firepower here. Is there is there also a carrot going on here? Are there are they are they having diplomatic discussions? Like what what is actually happening right now as best you understand? >> Yeah. So, we need to have in mind that this naval buildup in the Caribbean is the largest in decades. it's uh uh larger than what we saw at least since the invasion of Panama in 1989. Uh but even then uh when we think about yes the US invaded Panama, it ousted uh General Noriega, but the US already had bases in Panama. It got to a point where it deployed 28,000 uh troops and now uh it just has around 15,000 which is still a lot but Venezuela is much much larger than Panama for example. >> Okay. And sorry where are those troops? Are they all on ships or are they actually on the ground somewhere? >> No, they're all on uh mostly the ships but also some in Puerto Rico for example uh in the in the bases. But I think that when there are nearly a dozen warships in the region, which is a lot, uh earlier this month, earlier in November, the USS Gerald Ford, which is the largest warship uh in the US and the world basically arrived with additional troops. So that's how we got to these uh 15 uh,000. uh and of course the the firepower that we have there is is unprecedented and Venezuela would uh does not compare the military capacity of Venezuela has to to fight that. But at the same time and that's the the tricky question and how to assess what the objectives of the Trump administration uh really is because that's a lot of firepower to fight drug trafficking, right? You don't need a warship or even when talk about a dozen warships to fight through. But at the same time, >> 15,000 troops is not enough to carry out a ground invasion and take over a country, especially a country the size of Venezuela with the geography as I said before, part of the country's jungle, part of the country's mountains. It has u uh it has a kind of armed forces that are not only uh the military but there are all the militias. What Maduro has done over the past months is handing out uh rifles and arms to the population, training the population for some sort of like guerilla tactics to to kind of create at least some sort of friction or create even if you're talking about the kind of casualties, civilian casualties, that creates a cost to the US uh in assessing uh if it's going to decide to invade or not. Um so the way we see this is there is at this stage a show of force. Of course the attacks on the drug trafficking boats are part of these uh broader narrative of fighting drug trafficking in the region. But we see the US seeking to to create the conditions for regime change or regime collapse within um Venezuela without necessarily being the main actor doing that. So just to to sorry I can explain more more clearly our baseline scenario with like a 40% likelihood is that the US will escalate its current operations. So now, as you said, we have the US military attacking drug trafficking boats, allegedly drug trafficking boats in the Caribbean and Eastern Pacific. We see the US moving that to some kinetic attacks inside the Venezuelan territory, targeting mostly assets linked uh to drug trafficking. So, as I said before, these can be air strips, these can be assets linked to the military because they are dual use. They also used for drug trafficking. Of course, they would seek to to kind of undermine Venezuela's air defense capabilities. But we don't see at least in the first couple of months the US targeting for example political targets in Karakas the presidential palace or seeking to target Madur in a direct attack for example because we think that the political costs for the Trump administration would be too high to have its fingerprints in a regime change uh action in Venezuela. So, it's better for them to to have this uh military deployment to to wait a bit because now in the past few weeks, Trump just said that uh they would engage in negotiations again. Just this week, he said he may talk to Maduro face to face. So, so there is this suspense in the air that there may be room for negotiations. But at the same time, Maduru uh what has been reported that Maduru offered was yes, I promise to step down in two, three years or uh I I can give American companies preferential access to oil and uh mineral contracts and the White House reportedly turned down these these offers because they want kind of regime change now, right? Him stepping down now. So that's why it's also unlikely to to be this kind of negotiations and why we'll likely see an escalation to to attacks in land now. >> Okay. And is there any hope here on the on the White House as best you can tell of Maduro just changing his tune and saying, "Whoa, okay, US, sorry, you know, I didn't mean to be so off the page. I'm now going to get on the page with you and sure I'll open up to you and we'll start I'll I'll start doing some of more of the things you want." Is there any probability of that or are they kind of more hoping for um I think you said it's it's unrealistic to expect that they'll just honor the the previous election results, but are they kind of hoping that maybe like one of Maduro's lieutenants maybe kind of knifes him in the back and then says, "Hey, America, I'm I'm willing to play ball." >> Yeah. when when we think that the US raised the bounty on Maduro to 50 million on information that can lead to his arrest. We we have seen reports for example not only Trump openly spoke about authorizing CIA operations covert operations but there have been reports that the CIA tried for example to co-opt the pilot of Madura's plane and they would probably be aiming to do what they did to the Mexican cartel leader Elmo that they put him in a plane and then he thinks he's flying somewhere and then they take him I don't know Puerto Rico or El Salvador or something like that. Um so I think that there is this uh they are creating the room or giving the time perhaps for uh some development in that regard to to happen which is not necessarily uh Maduro stepping down willingly but someone else some other actor inside Venezuela taking uh a decision that leads to the regime change as I said before without necessarily uh Washington having its fingerprints in that just saying well we were just fighting drugs in the western hemisphere which is a priority for the Trump administration and the regime change happened to occur against this backdrop that would likely be the kind of narrative also to reduce the responsibility that they would have in terms of if they did not push for regime change like concretely they would have less responsibilities in securing uh boots on the grounds for the new government to to securely govern. So, so something in those lines as well. >> Okay. Um, do you sense a mounting time pressure here? Um, only because, you know, having a dozen warships and 15,000 troops just stationed off. It's not cheap, right? It's not something you can do forever. So, do you get a sense that things are building up to some sort of flash point here or could this last longer than I'm imagining? Yeah, there is certainly that sort of constraint both uh in terms of financial resources but also in terms of uh the mobilization of these military assets, right? Uh as I said before the US as Gerald Ford coming before it was stationed uh in Asia in the Middle East where you have more often at least higher military priorities. Um and then when you think even domestically in the United States to the extent uh now that Congress uh returned from uh the shutdown you may see some mobilization uh in Congress trying to block these sort of actions in the region. So we do see some time pressure. Uh and one of the drivers that we had in mind uh in terms of uh time frame was the designation of Carta de los Solis as a foreign terrorist organization as an FTO. This was on November the 24th. Of course, now you have a Thanksgiving and it's highly unlikely that an attack would occur during uh the holiday, but perhaps right after that, we see an increased likelihood that this next stage of operations that would be uh aerial attacks in land would start to occur. Uh we are thinking that the our assessment is that this will become increasingly likely in the coming days and weeks. >> Okay. Increasingly likely. But you think it's it's more under the guise of we're targeting cartel related uh assets. It's not we're trying to drive overtly regime change. We're just trying to take out the bad drug guys. You're nodding as I'm saying this, but one of the reasons why I'm I'm kind of pressing on this, and I'd love to hear your thoughts, is as an American, a regular American, I I don't get the sense that that Trump has the approval yet of the just the American public to go invade Venezuela. I mean, I think a lot of people are probably sympathetic to what he's doing there in terms of trying to, you know, overtly, you know, curtail the drug trade, but I don't think any American feels like, hey, I'm I'm not ready to sign up for this yet. In fact, no one's actually made the case to me why we should do this. And obviously, in theory, the president can't even declare war in another country himself. That's something Congress has to do. you know, leading up to say like Iraq, you know, there was long uh hearings where the current administration back then was was sort of selling Congress on why it needed to do this. Like none of that's gone on here. So, um, to your point, like I I think the American public would swallow sort of targeted surgical strikes on cartels, but I don't think they'd be cool about US troops, you know, running a shore off of a Navy warship to go fight a jungle battle to depose a dictator. Yes, that's that's pretty much in line with our assessment as well, Adam, in the sense that the political costs for the Trump administration would be significantly high. Not only we're not just talking about the opposition, but even uh his own support base, right? So that's why this scenario that consists of a military invasion with a large deployment boots on the ground to force regime change is uh alongside the one that I spoke earlier about of a negotiated solution. These are the two least likely ones with just 5% likelihood. And we agree that that's the the notion that it would be uh very unpopular for Trump to as he tried even as he tried to frame himself as the peace president and how uh he has promised to get the US out of the so-called forever wars and this kind of thing to engage in a new one that uh he would start. That's why it's also highly unlikely to to occur. >> Okay. One thing I didn't mention earlier about steps that were being taken against Venezuela was sanctions, but Venezuela is pretty heavily sanctioned by the US. Is there more that sanctions could do or do we kind of have them on max? And yeah, that's tricky because I think there is uh always room to to do more. Uh, one of the things that's still on the table that uh, the Trump administration actually revoked and then reinstated was a license that allows Chevron to operate in the country. So in May uh, the Trump administration suspended all uh, Western companies their kind of US treasury licenses to operate in Venezuela despite the sanctions. Uh but then in August it allowed Chevron just Chevron to resume but a very strict license that it cannot make payments in kind to uh the Maduro administration to the Maduro regime that basically it can swap oil with Pedvisa and then Pedvisa then exports this oil and generates some revenue but that's still a very important uh source of revenue to to the Venezuelan government. So if they wanted to take another critical final step in that regard, this could be it. But I would say that bulk of the sanctions they came during the Trump first administration because in 2017 uh it blocked Venezuela's access to financial markets. In 2018, it expanded the sanctions to block the purchase of Venezuelan debt. And then in 2019, it also sanctioned other important sectors in the economy. So oil, mining and and banking. So these set of sanctions from from the first Trump administration, they are the ones that have done uh the big negative economic uh uh blow to to the Venezuelan economy and they are still in place. >> Okay. And u Mario, I'm working my way to the opportunities part of this discussion, but a few more questions here. Um okay, so we've been talking about US strategy versus Venezuela here. What do the other South American countries think? Are they are they rooting for one side here? Yeah, Maduro became increasingly isolated even within South America, Latin America after uh the July 2024 elections because since he did not provide proof that he was elected, even other leftist countries in the region such as uh Brazil under President Alula or Colombia under President Petro uh governments that would be sympathetic to Maduru, they refused to recognize him as president. In addition to that, you had other countries in the region. Uh so leftist countries in Chile under Boric but also Uruguay, Paraguay, Panama, they recognized uh the opposition leader Gonzalez as the winner. Venezuela broke diplomatic ties. So he became really really isolated. But despite that, you still have countries and I would point again to Brazil and Colombia under leftist governments that although they do not openly support Maduro, they oppose a US military intervention in the region. So they uh it seems just uh in recent days that President Lulov Brazil uh was trying to get uh a phone call with Trump trying to discuss the issue for a negotiated solution something those lines. So while they do not necessarily back Maduro, I think they oppose even more a US uh military invasion or uh the US kind of forcing a regime change um by the use of of military force. >> All right. Do they support the US? Are they rooting for the US to find a way to get rid of Maduro that's just not doesn't involve military action? I'd say most of the countries uh likely because they recognize the opposition leader. they they have this understanding that Maduro uh is an illegitimate president, that all the negative economic impacts not only create problems inside Venezuela, but basically when you think about all the migration that uh kind of has come from Venezuela over the past decades, this has pressured countries in the region. So, Colombia, Peru, Chile, all our countries that not only had to deal with immigrants and the social issues that this entails, but because organized crime, uh, leverage, human trafficking in this kind of exodus, there has been an spike in violent crime or, uh, targeted killing, turf wars in countries which were considered safe before, such as Chile for example. Mhm. >> So these other countries that have to do with the kind of the fallout of uh the Venezuelan economic and social economic collapse for them it would be interesting for for their own interests that Venezuela becomes a more stable country that attracts back part of these migrants and that helps uh stabilize the region rather than uh continue deterioration that can drive uh more migration again for example that would be bad for for everyone. Okay. Um, you know, I' I've seen a little bit of this firsthand myself. My sister lives in Colombia and the last time I was down there, uh, I I remember being in Cartahinia and just walking around and and it was very clear that the um homeless people that were on the street were, you know, begging oftentimes, you know, pretty aggressively out of desperation. They were like, "Oh, those are all the Venezuelans." Um, you know, Venezuelans just seem to be pouring out of Venezuela, uh, just desperate, right? And they're, um, you know, Colombia has its own sort of underemployment problems, but the the Venezuelans are at the bottom of that that ladder. Um, it was just really acute and heartbreaking to to see the plight of those people. And so, you know, I know the Colombians didn't want them there. I know the Venezuelans probably didn't even want to be there themselves. They just didn't have another any other choice. So, I can see a lot of people rooting for just Venezuela to start solving some of its own problems and and probably most of them have come to the conclusion, as you said, that that's it's going to require somebody different than Maduro to to be doing that. Let me ask you this. What do the average Venezuelans themselves rooting for here? Do we know? Well, it's it's hard to to say in terms of statistics or polls, but I think uh the election from July 2024 is a very good proxy because back then, despite the repression, despite the government uh resorting to its own kind of social programs and cash handouts trying to retain some sort of popularity, uh the vote tallies that the opposition gathered and that have been verified so they can be uh trusted to an extent they indicate that Gonzalez Oruchia got more than 70 to 75% of the vote. So I think that's very telling to the extent uh to which there is uh limited support for Maduro. Of course that uh it's not to say that he is highly unpopular and if the US would uh were to invade Venezuela there would not be popular opposition that there would not be armed militias perhaps trying to fight to defend his government. But that would certainly be a minority. Uh while I think that um even though not all of these 75% would support for example military intervention uh they are more likely to oppose Maduru uh than not. >> Okay. And this is I'm just asking you to wildly speculate here, but if the US did get to the point of military intervention there, do you think the average people would join the US side in in in you know trying to dislodge physically the Maduro regime or is that expecting too much? I think when you try to to think of people taking sides and taking up arms for example for either side I think that would be a minority um both parts of the radicalized opposition that perhaps would be willing to engage in arms and also those willing to to defend the administration. part of our scenarios uh in which we see uh a regime change and a new administration trying to govern. Uh one of the consequences is if we have an armed conflict for example uh is an increase another humanitarian crisis in a sense that many people be displaced like thousands hundreds of thousands of people displaced either internally or even going again to other countries as we were talking about before Colombia, Peru, Ecuador, Chile, Brazil to some extent. uh so I I I don't think that we can expect uh a wave of support and that there will be uh close to a unanimous uh position in either in either way. I think more realistically uh you have parts of the population that side with both to the extent they are willing to to engage and parts that would be caught in the crossfire would be scared would be worried about I don't know their family their family members their case the elderly uh and would perhaps um be more uh willing to to relocate and either leave Venezuela again. Uh so I think that's part of the the scenarios how we anticipate things unfolding beyond just the political and economic implications. >> Okay. All right. Well, look, let's in the remaining time we have left, let's let's get to the um perhaps the more hopeful part of this discussion. So let's assume for a moment that there is a material change in Venezuela and that unlocks the opportunity for Venezuela and the US and Venezuela and other of you know kind of team America's allies um to start let's say driving through a lot of the reforms that that Miss Machado uh has been uh you know advocating for and and these are things like you know reopening Venezuela's um economy to the rest of the world. Foreign parties can come in and help Venezuela um better tap into its vast natural resources. Um hopefully we rebuild the Venezuelan economy and it starts bringing people home and people want to be there and all that good stuff, right? From your perspective, what are what are some of the biggest components of of of that opportunity? you know what is the what do the people who have been focused on this what are they hoping for most out of it I is it all about just the oil and gas revenue is it about other things what's the size of this opportunity uh for the peace dividend that this could yield um what do you think >> yeah the good thing is that Machado has an an economic team working on this and they have been as I said before kind of road showing this in business forums worldwide she's she's in hiding she uh has been participating remotely from interviews and uh this kind of uh events and the plan that they have envisioned uh talks about 1.7 trillion uh kind of dollars in opportunities over 15 years and around 40% of that so 680 billion would be concentrated in the extractive sector. of both oil and gas and mining. But the understanding that they need to go beyond that uh as well to also uh work on infrastructure to work on improving education and health in this idea that they need to improve social economic conditions to attract part of not only the the broad uh kind of migration that happened but to reverse the brain drain that Venezuela suffered. And another pillar would of course have to be infrastructure, right? So from electricity to water provision to to roads and all these um kind of sectors that would need to be rebuilt as you said. Uh and this would likely entail uh to some extent a stable political environment. Also uh what they have demonstrated so far this more pro business approach. So openness to the private sector with uh regulatory stability with clear uh kind of reinstitutionalization of the country with rule of law uh but it would still be a challenge to instill that confidence in investors right I think it's not only a change in rhetoric and approach that would be required um for um for investors to decide to to return to Venezuela especially if in a scenario in which There is still rebels fighting against the government. There is uncertainty if the government will be able to remain in power. And beyond that, when we think about minor issues, there is uh a column on Bloomberg today flagging that for example, even the need to rebuild uh Venezuela's kind of statistics because uh you don't have credible data anymore for for many many years. So all of that it just shows the extent to which uh it will be kind of a a very hard work to rebuild the institutions, rebuild the infrastructure, rebuild uh the economic sectors to attract uh the private sector to to kind of unleash the potential. But the good news is the oil is there, right? So uh it's just uh a matter of operationalize and secure environment that is favorable to to conducting business. >> Okay. Um I mean it sounds huge for Venezuela. I mean these numbers are still pretty big too uh to even countries like the US. So obviously there's the opportunity to come in and get ongoing revenues from helping Venezuela rebuild itself and tapping into its vast natural resources, all that stuff. Um uh then presumably it would also come with sort of some I don't know if guarantees is the right word, but um it would pull Venezuela more towards team America than towards and away from China and Russia and Iran and whatnot. So, it would advance the sort of Monroe Doctrine 2.0 aspirations of of the current administration. You're you're nodding as I'm saying all this. Um, I guess my question is sort of like how big of a deal is all this, right? If if if Venezuela flips from becoming a thorn in America's side to a tailwind to its aspirations, how big of a deal is that in sort of unlocking the full potential of the Monroe Doctrine 2.0? Yeah, it's a big deal because as you're saying before, it's not uh just uh Venezuela alone. I think this speaks to the way the Trump administration uh views the Western Hemisphere more broadly. So even uh in Venezuela, we're talking about removing a leftist autocracy from power. So uh an ideological uh adversary so to speak. But when we think about what the Trump administration has done for Argentina for example, which is uh an ally uh like libertarian president Javier Mle, it's very unprecedented the level of financial support with a 20 billion uh currency swap line that the Trump administration has provided just weeks before an election. uh the promise to work with private sector uh banks for another 20 billion which now it seems to to be has put kind of sheld but still uh so I think it really uh speaks to the importance that the Trump administration is going to the western hemisphere and also that reflects a realignment of the US visa v other regions. So if the US is to focus on the western hemisphere, it will likely uh retreat to some extent its presence in Europe, in the Middle East, in Asia, uh and then there is this understanding that the way that Trump views uh international relations and the spheres of influence, the US would be happy uh kind of having this hgeimony in the Western Hemisphere and leaving China perhaps to dominate uh Asia and Russia to deal with European So this is just like the tip of the iceberg of what could become a much broader geopolitical realignment u that lasts for decades for example. >> Okay. And from your perspective um if we're looking at this as the the grand game of risk, you know, played out by the great powers over the world, do you like America's odds here with the strategy? I mean, I I I kind of I kind of get the the logic of, hey, we stay here in our own hemisphere, right? We're protected on either side by these massive oceans, right? Um, and we're much more resourcer rich in many ways than most of those other parts of the world that you mentioned. uh and we have a lot of untapped resources and um a lot of potential for you know growth especially in the southern part of the hemisphere uh as as the the Latin American economies get get elevated. Um uh so I mean there's a lot to like about it and there's you know there's the circularity of okay so we've got some cheap labor down there but access to good resources and they're excited because we can help you know grow their economies but we like it because we've got a great trading partner and obviously America's still going to trade with the rest of the world but it it it I can understand the appeal of the logic. I just don't understand the world chess board the as well as you guys at Rain do. So what do you think? Yeah, I agree that there is a case to be built for for the upside that this could provide. But then as we say every time, right, where there is risk, there is opportunity. So uh to take into consideration what could be a potential risk, for example, this would be undoing a world order uh post the second world war, the Breton Woods and everything that followed that was built uh on top of US interests, right? So the institutions that we have uh governing uh from world finance toward international relations to US military presence by NATO in Europe by alliances uh >> in America has been transatlantically aligned since its formation. >> So be a change to that. Yeah. >> And it has expanded that right to have key allies in the Middle East in Southeast Asia. Uh so if you think about retreating from that, of course, yes, you'd be less exposed to engaging in conflict in those regions. You'd be less exposed to uh either participating in wars or or things like that, but you would have less capacity to influence developments there that also affect you. So there is also a flip side, right? So uh it's hard to say to have a yes no answer in the terms of is it better or is it worse good or bad but there is the kind of this considerations to take from both a sides of the argument that each of them perhaps have both risks and opportunities. >> Okay. Well um in our last couple minutes here Mario um I understand that you are a geopolitical analyst. You're you're not an e economist or um you know a a professional investor, but um what you know are there are there investment opportunities that you think are likely to present themselves as the situation unfolds? Um, I I guess I'll end it at that, but I'm I'm guessing maybe there are different investment opportunities whether they successfully transition Madura out of there to this great new future we're talking about. Um, or not. And if it doesn't work out well, there's probably ways to to trade that, too. But, but do you have any general thoughts on on any investment opportunities that that a a non-maduro future uh would would create for the average investor? Yeah, I think that we can refer to what we are seeing for example in uh Venezuela's uh bonds movements recently and that shows perhaps the appetite of uh investors and uh the way that they see uh the situation evolving. So um Venezuela has I think 160 billion uh in debt uh to restructure. it has defaulted uh 2017 and their bonds like traded as low as 10 cents of the dollar and they were just at 15 a couple of months ago. Now they're up to 30. Uh so there is this indication from financial markets themselves and of course we're talking about bond holders and this would be the kind of side uh of things but they are seeing a growing uh upside there. So uh in terms of depending on how the scenario evolves to which extent it's stable and it instills market uh markets and investors confidence there will likely be opportunities and there will likely be companies willing to to operate there. Just as I said like in as far as May we had more oil companies still operating in Venezuela until the US uh Treasury revokes their licenses. So uh there is uh different ways in which risk appetite works for the private sector and depending on the returns uh and the conditions on the ground there will certainly be room um for investments to to materialize. >> All right. Um Mario, thank you so much. Uh we're here at the end of the hour. Um this has been super educational. Um, I I very much hope that um if we have you back on in the future, it's for good reasons like some of the things that we hope happen are happening and you can make sense of it for that versus, you know, things ramp up militarily or or or god forbid, you know, continue to devolve from here. Um, but uh but thank you. When I do these, I usually try to do these as a live stream so the audience can ask their questions as well. Um, obviously I had enough questions to fill the hour here. Um, but we we we couldn't do a live stream this week anyways just because of of the Thanksgiving holiday and folks's travel and stuff like that. But when we have you on next, >> um, I will try to do it live so that the audience can ask their questions here as well. Um, last question for you, Mario. For people that have really found this discussion very enlightening and they would like to follow you and your work from here, where should they go? >> Yeah, thanks for having me, Adam. It was really a pleasure and glad to to be back in the future. And uh to reach us, just feel free to write to info@rainetwork.com. So info@ranetwork.com. Thanks. >> Great. And Mario, when I edit this, I'll put up the link there to that uh that email address so folks know exactly where to go if they want to contact you. Um >> really appreciate that. >> Yeah, this has been fantastic. So folks, um please thank Mario for coming on here and educating us about this very important issue. um join me in doing that doing so by hitting the like button and then clicking on the uh subscribe button below as well as that little bell icon right next to it. Um uh you know there are investment implications from this. If you'd like to get help from a professional financial adviser to think through how you might want to take advantage of them, feel free to schedule a free consultation with one of the financial adviserss that thoughtful money endorses. These are the firms you see with me on this channel week in and week out. To do that, just fill out the very short form at thoughtfulmoney.com. And as a reminder, these conversations are totally free. There's no expectation to work with these firms. It's just a service they offer to be helpful to investors. Um, Mario have really appreciated this. Um, I know you're down there in Brazil, so you guys don't necessarily have Thanksgiving there the way that Americans do, at least on the day that we do, but I still wish you a happy Thanksgiving. And, uh, like I said, I very much appreciate you sharing your deep expertise with us on this. And uh I I I would like to have you on the program again. And again, I hope it's for good reasons, not for bad. >> Yeah. Thank you. And happy Thanksgiving over there. >> All right. Thanks so much. And everybody else, thanks so much for watching.
SPECIAL REPORT: Is The US About To Invade Venezuela? | Mario Braga, RANE
Summary
Transcript
Venezuela has the largest proven oil reserves uh globally around 17% of the oil reserves are there about uh 303 billion barrels. So that's not something we can ignore. Of course it has also the eighth largest natural gas reserves in addition to mineral riches. So from gold to diamonds and including now to rare earths. The US views the western hemisphere as an area, a natural area of influence of the United States. So it's important to the Trump administration that China, Russia, Iran do not have like a free pass to be present in the continent. Welcome to Thoughtful Money. I'm its founder and your host, Adam Tagert. At the time of this recording, tensions are high between the US and Venezuela. American warships have been deployed off Venezuela's coast. Speculation of a US-driven regime change to oust Venezuelan President Nicholas Maduro is all over the headlines. And just a few days ago, US officials told Reuters that the United States is quote poised to launch a new phase of Venezuelan related operations in the coming days. So, how did we get to this boiling point? What's most likely to happen from here? And what would the geopolitical and economic implications of regime change in Venezuela be? For perspective in this thoughtful money special report, we're fortunate to be joined today by Mario Braa, Latin American geopolitical analyst for RAIN. Mario, thanks so much for joining us today. >> Thank you, Adam. It's my pleasure to be here. >> All right. Well, look, I very much appreciate you doing this. We've done this uh in the past with some of your colleagues to give us kind of real-time insights for other uh conflicts that have gone around the world, most notably in the Middle East. Very much appreciating you coming here um upon request to do this for us uh in Venezuela here. Um so Mario, if you can um let let's start just kind of by leaning back for a second here. Um set the table for us like what is the history of the bad blood between the US and the Maduro regime? Sure. I think when we think about Venezuela, uh the thing that comes to many people's minds is Chaveis Maduro, this socialist autocracy that came to be. But it's important to take a step back and understand uh how they came to power and then how the dynamics between Venezuela and uh the US changed over the past decades because basically Venezuela uh after gaining independence and I promise I'll not make this into a Venezuelan history class but that's okay until the 1950s uh and then in 1958 there is the Punto FIHO pact. main three political parties agree to respect election results and then Venezuela has a democratic period starting in 1958 but of course with these political arrangements they they become fragile at some point they stop working and with Venezuela of course oil prices had a lot to do with that so when we come to the late 80s and early 90s that's already crumbling down crumbling down and that's basically when Ugo Chaveis who then was a career military officer who had already founded a Bolivarian militia within the army. In 1992, he tries to stage a coup to get to power. He does not succeed. He's arrested and then one can think, well, that's the end. He's in jail. He's not coming back. But that's not what happens because a couple of years later he's pardoned and he became this voice for the dissatisfaction that there was within Venezuelan society with the existing uh political establishment. So in 1998 he gets to power via democratic norms. He's elected and he comes to power with a very ideological approach to to governing. So he he declared himself Marxist. So he sees the US and labels the US as a imperialist uh regime. Uh and then he starts to turn Venezuela uh from what used to be kind of a regular Latin American democracy of course with corruption with many issues but he makes a lot of constitutional changes and he grows increasingly auto autocratic over the years by relying on the large oil reserves that he had. So cash handout, social program, social benefits to have this popular support. At the same time when he's deteriorating the country's institutions, uh the kind of electoral rules, he he managed to uh kind of hold sham elections to remain in power. And that works especially uh in the 2000s on the back of the uh commodities boom that was mostly driven by China. uh and because of high oil prices, Venezuela has uh high uh revenues and he manages to to establish this uh very well uh structured apparatus. The thing is that when we turn to the 2010s, the economy is not doing so well. The oil prices are not that high. The revenues start to decline and then uh Chavez passes away in 2013. So he had appointed by then Maduru to be um like his successor. So when Maduro comes to power the situation is different and then he he struggles to to keep the uh regime going as it was before. Uh you start to see protests against the sham elections. Because of that there is more repression. There is uh the exodus from the country. The it's the kind of the most severe humanitarian crisis uh in the western hemisphere. uh 8 million Venezuelans have left the country and and then I think from there we get to the point where we are now that we had in the first Trump administration the US step up in pressure against Maduro trying to house him uh after that during the pandemic the Biden administration trying to re-engage trying to see a diplomatic way out and now during the Trump second uh Trump second term you have an even kind of increased pressure resorting to the milit military buildup that we are seeing off the coast of Venezuela. >> Okay. So, um I I'm no expert on this, so I'm so glad you're here. um from a uh administration viewpoint from from what I can tell from you know the headlines is um they don't like the Maduro regime because um you know you can make a human's rights case right which is hey we just you know don't think you're you mentioned a big humanitarian crisis there that's been going on for a long time um but it's hey um you know a lot of the illegal immigrants that came in uh especially during the Biden administration. A lot worse from Venezuela. Um totally understandable seeking a better life here than than what they were able to get there under Maduro. Um but uh President Trump accurately or not, curious if you have a thought on this, um has said, "Hey, you know, Venezuela is actually kind of pushing people on us and in particular, it's it's clearing out its prisons and it's insane asylums and it's kind of sending us kind of the dregs of the c their country and dumping it on the US." So there's that claim. There's the other claim that that Venezuela has become sort of a narco terrorist state and uh is um you know pushing drugs into America that are killing Americans. And obviously one of the things that the administration has dialed up recently is is you know hey we're just going to start blowing up you know watercraft that we see starting to leave Venezuela to hopefully you know make them think twice about doing that. Um, so there all those are the negatives that a that a regular person like me is hearing kind of against Venezuela from our current administration. I've got to assume too that that beyond just out of the goodness of its heart and trying to improve the situation there for Venezuelans uh Venezuela's suffering citizens that the the administration is also and this isn't I don't think unique to to Trump but the America government is also really hoping for regime change in Venezuela to get somebody who's a lot more America friendly and can unlock the ability of of America and other western countries ries to tap the vast riches in in Venezuela, oil being a huge one, um, and having everybody make a lot more money than they're making right now. Is that a pretty accurate summation of the pros and the cons, or is there more to the story than what a regular guy like me gets? >> Yeah, definitely. As you laid out, uh, Venezuela, I think, ticks a lot of the boxes when you think about US foreign policy priorities, especially for the Western Hemisphere, and what the Trump administration has put out as its kind of even from the during the campaign as its priority. So, you're right. When you talk about migration, drug trafficking, democracy in the in the hemisphere as well. But when we look at the Venezuelan case, I think we need to also take a step back and see um why it's so strategic and why it's so relevant in that regard, especially to the Trump administration. Because when we think about the drug trafficking angle, for example, Venezuela is not a country that produces drugs. The main cocaine producer is Colombia. and the fact that Venezuela has a very poorous border with Colombia and that Venezuela has a large Caribbean coast that uh what happens is that it has become a transit country and what happens is because of increased oversight in Colombia over the past decades including Plan Colombia or the US partnership what drug traffickers started to do is that it's easier for them to carry the drugs to the Venezuelan side of the border and then from Venezuela traffic the drugs either by plane uh the vast majority of the drug that is trafficked via aerial routes come from Venezuela. So they go to uh kind of these clandestine air strips in the middle of the jungle or even some military bases that we can dive into a bit later on on the role of that military from Venezuela plays into drug trafficking and then they take to Central America to southern Mexico and then that cocaine is is smuggled into uh the US. So there is that drug trafficking uh angle. >> All right. Sorry. So just to make sure I'm clear. So it's really more Colombia is the producer but Venezuela is the distributor. >> Yeah. Venezuela works as this so to speak logistic hub, right? So from Venezuela because uh we can we can see uh when we think about just the like this uh November 24th the US designated the cartel de los Solis as a terrorist organization a foreign terrorist organization. But we need to understand what is the cartel de loles the loss like cartel of the suns and that was one of the badges that the generals in Venezuela use in their uniforms. So that was the informal way in which Venezuelans referred to corrupt uh army generals or military officials those that were involved in illegal activities including drug trafficking. They were like informally referred to as the cartel de loses. So it's not a a an organization as we have for example tendagua which is uh uh a cartel from from Venezuela or even the Nalua cartel or or al-Qaeda for example if you're trying to think about terrorist groups more broadly in which there is a clear structure. What happens in Venezuela is that Maduru runs an autocracy and he needs the support of the military to remain in power. Right? he cannot rely on the votes. We saw the July 2024 election that uh the evidence shows that he lost by 3 to1. Uh there have been increasing protests. So if he cannot rely on popular support or on democratic norms, he needs to rely on the uh armed forces and the security apparatus to retain that support. What he has done is he has appointed between 2,00 and 2500 army generals which is a incredibly high number for any standard especially in a country like Venezuela uh that doesn't have such a well-developed armed forces for example and the reason why he has done that is that beyond the or the prestige or the salary that they could benefit many of these generals are involved in the legal activities ities inside Venezuela including drug trafficking. So when you look at some of the uh our air bases or some other military assets or even ports, they are what we call as dual use. So they can be a front that is from the Venezuelan armed forces, but they are also used by drug traffickers as I said uh because there is uh the kind of the agreement or the the kind of consent from the government in Venezuela to allow these drug trafficking activities. So that's why Venezuela has become this uh important hub for drug distribution that is produced not only in Colombia but also Peru, Ecuador uh and of course there are other routes that go through Brazil, they go through Gana but Venezuela is a major hub in that regard. So from the drug trafficking perspective of course that is a connection. Then as you said when we think about the economy uh Venezuela has the largest proven oil reserves uh globally around 17% of the oil reserves are there about uh 303 billion barrels. So that's not something we can ignore. Of course it has also the eighth largest natural gas reserves in addition to mineral riches. So from gold to diamonds and including now to rare earths and that's important as well. And I think something that you did not mention, but we also need to take into account is the geopolitical alliance and the alignment of Venezuela and why that is so important not only to the US but specifically to the Trump administration because during the 2000s when Ugavis was in power and I said that uh he was leveraging the large oil reserves and he had a very anti-western anti-US rhetoric. he became a very close ally with Russia for example. So back then Chavez built one of the most sophisticated air defense systems in Latin America purchasing Russian weaponry. Uh then of course uh all the commodities trading close ally to China. Uh China at some point uh loaned uh provided a lot of funds to Venezuela as well. So Venezuela became a hub for interests that not only uh were not aligned to those of the US but to some extent oppose those those of the US. So Russia, China and also Iran. And that's something that when you have an administration that is reassessing the role of the US internationally in other uh parts of the world to the Middle East, Southeast Asia, the role with China, even uh the willingness and capacity to cooperate with Europe and Ukraine. The Trump administration is shifting that focus back to the Western Hemisphere. And this is what has been called the Monroe Doctrine 2.0 which is basically the western hemisphere is like the US views the western hemisphere as an area a natural area of influence of the United States. So it's important to the Trump administration that China, Russia, Iran do not have like a free path to be present in the continent. And then of course when we think that the secretary of state is Marco Rubio who is of Cuban descent who has a very strong position against leftist autotocracies in Latin America. Of course we're talking about uh Cuba. Uh we're also talking about Nicaragua. But then Venezuela also becomes an important player because Cuba and Venezuela help each other out. Uh so a way to bring down the Cuban regime is also uh is directly linked to uh bringing down uh the Venezuelan regime. So so all of these uh different drivers, they play a role in making Venezuela so important specifically to the Trump administration. >> Okay. Okay. Thank you. And thanks for adding the piece of the puzzle in terms of the geopolitical alliances with sort of America's, you know, enemies. Um the folks that aren't on team America. Um, I'd meant to ask you about that and just didn't. So, I'm so glad you brought that up here. Um, okay. So, let me ask you this. Um, so if if Maduro were to be removed and and we'll talk in a moment about the ways in which that might happen. But let's just let's just assume for a moment that the US somehow successfully affects regime change here with Maduro. um what's what's likely to happen from a governance standpoint like who is likely to step in are are we are we likely to get an opposition leader come to come in who's much more west friendly and I think we all learned one of their names I can't remember her what her name is but but because she won the Nobel Peace Prize last month >> Machado she's the most prominent figure from the opposition indeed >> okay so you know is the country just sort of looking for Maduro to get out of the way so they can put somebody like her in or if Maduro to be would be removed, would we likely just get a Maduro 2.0, you know, the the the next successor in the Chevz line? Um what's more likely there, do you think? Yeah, that's the the big thing is the first part of your question that it really depends on how this process evolves and if we get uh a decapitation of the regime or even some sort of agreement that includes an asylum either not only to Maduru but to the kind of his inner circle and then we would have room for the opposition uh to take office. uh but if not there are some people who claim that a way out and uh that could be peaceful would be what they are calling Madurismo without Maduro. So Madur is out he goes to asylum he leaves Venezuela but the structure remains in place and then we could have one of his four closest allies taking office. I think this is unlikely but just to have in mind who this people might be. talking about Dio Caveo which is the interior and justice minister. We're talking about Vladimir Padrino Lopez who is the defense minister. We're talking about Dulce Rodriguez who is the vice president and oil minister and her brother Jorge Lopez who is the president of the National Assembly and some sort of a power broker uh in uh in Venezuela. So this is his inner circle. If we see some sort of um kind of agreement or deal that includes Maduro leaving the country but the structure remaining in place, these would be among uh probably the people that would retain part of the power. But even in that scenario, I think we can anticipate some sort of struggle, internal disputes, other generals perhaps parts of the military trying to take over. So I think any scenario when we talk about uh removing Maduru is uncertain. If we are talking about a scenario in which Madur is removed but also the higher uh rankings of both the government and the military because we need to have in mind that for decades now uh Chavez and Maduro they have purged the military to an extent that uh the regime can be called like coupe proof in this sense that they really have only loyalists uh >> it's all their buddies. Yeah. at this point. Yeah. >> Exactly. And and and then of course we're, as I said before, you have generals running uh like drug trafficking, but you also have generals appointed to keep positions in the country's um state-owned oil company, for example, PD Visa. So, and across of course the government and across other institutions. So uh in a scenario in which you you have the opposition coming to power and trying to govern they would really need to do a very comprehensive work of reinstitutionalizing the country. But in that scenario, I think the most likely we could have the results of the July 2024 presidential election being uh respected, so to speak, because in July 2024, Venezuela voted for president and Maduro claimed he won without showing any proof. But what happened was that the opposition was very well prepared for what they expected to be a sham election. And as you mentioned, Maria Korina Machado, who is this leader, she was barred from running, but she had a candidate uh kind of stepping in for her who is Edmundo Gonzalez Orutia and he won. and they were able to show the tallies of the ballots showing that he won nearly with like more than 70% of the vote and he was uh acknowledged and recognized as president-elect even though he did not take office. So we could have him returning to Venezuela. He's now uh in exile in Spain. He would probably be uh the head of of government. uh he would be like the the president in but the power the de facto power I think would most likely rely with Maria Machado because not only she has the charisma and the popularity but she has been already engaging with the international community with investors with the private sector she's doing what we could call even as road shows she has uh laid out and we can uh get into detail later but uh like what would a transition position period look like? What would a 15-year investment plan for Venezuela look like? So, she's trying to really come up with a case that there could be an orderly transition and she would probably be the one calling the shots regardless of her position, say interior minister, vice president or or anything in those lines. So, I think these are the main names uh to watch when we think about the transition in Venezuela. >> Okay. So, how how do you see that latter option being affected where the the current power structure in Venezuela agrees to say, "All right, you know what? We're going to let those those election results stand and we're going to leave and we're going to let Machado and her whole team come on in." do you see any way that that could happen diplomatically or is that something that's going to need like military intervention on behalf uh of of America? >> Yeah, that scenario for us is one of the most uh unlikely ones and there are some reasons for that. uh as I said before we are not just talking about Maduru and say five close uh allies or advisors that run the the whole regime. Now we talking about hundreds of people both from the kind of the political side within the government but also within the armed forces that are involved in uh illegal activities from as I said drug trafficking but also human rights abuses uh and other sort of violations that if the regime collapses, if Madur is out, they would highly likely face charges either in Venezuela or in the United States or both or face prison time. So there is a lot of pressure within the government uh to avoid a negotiated solution because the number of people that would not be contemplated with some sort of benefit some uh asylum somewhere and go live uh in Russia or Cuba but would instead go to jail is very large. So this is one of the constraints that we see uh for why a peaceful and orderly transition is unlikely and even if like working on the hypothesis that that happens. As I said before, you still have a large number of people that have been appointed uh by Maduro by Chavis over the past decades that are loyalists including within the armed forces that they could resort to some sort of uh internal armed conflict. They could hide in the country's uh jungles, the mountain regions, or even within karakas, the large cities, and resort to sabotage campaigns or try to assassinate new officials. they can really make it hard for the new government not only to uh exert power but even to instill confidence because when we talk about what we can expect for a transition and for what investments may look like. It will be very critical that the new administration is able to convince investors that not only it is committed to change to rule of law to welcoming the private sector again but also that it has the ability and the control to to rule over the country to to govern properly. So, I think that that's why it's so uh unlikely and so hard to to see a scenario in which you have um the opposition coming in and we just have uh like kind of a so-called velvet revolution as we saw in the Czech Republic for example. >> Yeah. Okay. So, let's talk about what's going on right now. So, I've mentioned a couple of times that the US has um, you know, sent a lot of warships near and around Venezuela and we're doing these, you know, targeted missile strikes to suspected drug crafts they're leaving. What exactly is going on there? And, um, I I guess from a um, do you do you see the US as trying to drive aggressively regime change there? And if so, how is it doing it? You know, if the military is the stick, hey, you know, you better do something because we've got all this firepower here. Is there is there also a carrot going on here? Are there are they are they having diplomatic discussions? Like what what is actually happening right now as best you understand? >> Yeah. So, we need to have in mind that this naval buildup in the Caribbean is the largest in decades. it's uh uh larger than what we saw at least since the invasion of Panama in 1989. Uh but even then uh when we think about yes the US invaded Panama, it ousted uh General Noriega, but the US already had bases in Panama. It got to a point where it deployed 28,000 uh troops and now uh it just has around 15,000 which is still a lot but Venezuela is much much larger than Panama for example. >> Okay. And sorry where are those troops? Are they all on ships or are they actually on the ground somewhere? >> No, they're all on uh mostly the ships but also some in Puerto Rico for example uh in the in the bases. But I think that when there are nearly a dozen warships in the region, which is a lot, uh earlier this month, earlier in November, the USS Gerald Ford, which is the largest warship uh in the US and the world basically arrived with additional troops. So that's how we got to these uh 15 uh,000. uh and of course the the firepower that we have there is is unprecedented and Venezuela would uh does not compare the military capacity of Venezuela has to to fight that. But at the same time and that's the the tricky question and how to assess what the objectives of the Trump administration uh really is because that's a lot of firepower to fight drug trafficking, right? You don't need a warship or even when talk about a dozen warships to fight through. But at the same time, >> 15,000 troops is not enough to carry out a ground invasion and take over a country, especially a country the size of Venezuela with the geography as I said before, part of the country's jungle, part of the country's mountains. It has u uh it has a kind of armed forces that are not only uh the military but there are all the militias. What Maduro has done over the past months is handing out uh rifles and arms to the population, training the population for some sort of like guerilla tactics to to kind of create at least some sort of friction or create even if you're talking about the kind of casualties, civilian casualties, that creates a cost to the US uh in assessing uh if it's going to decide to invade or not. Um so the way we see this is there is at this stage a show of force. Of course the attacks on the drug trafficking boats are part of these uh broader narrative of fighting drug trafficking in the region. But we see the US seeking to to create the conditions for regime change or regime collapse within um Venezuela without necessarily being the main actor doing that. So just to to sorry I can explain more more clearly our baseline scenario with like a 40% likelihood is that the US will escalate its current operations. So now, as you said, we have the US military attacking drug trafficking boats, allegedly drug trafficking boats in the Caribbean and Eastern Pacific. We see the US moving that to some kinetic attacks inside the Venezuelan territory, targeting mostly assets linked uh to drug trafficking. So, as I said before, these can be air strips, these can be assets linked to the military because they are dual use. They also used for drug trafficking. Of course, they would seek to to kind of undermine Venezuela's air defense capabilities. But we don't see at least in the first couple of months the US targeting for example political targets in Karakas the presidential palace or seeking to target Madur in a direct attack for example because we think that the political costs for the Trump administration would be too high to have its fingerprints in a regime change uh action in Venezuela. So, it's better for them to to have this uh military deployment to to wait a bit because now in the past few weeks, Trump just said that uh they would engage in negotiations again. Just this week, he said he may talk to Maduro face to face. So, so there is this suspense in the air that there may be room for negotiations. But at the same time, Maduru uh what has been reported that Maduru offered was yes, I promise to step down in two, three years or uh I I can give American companies preferential access to oil and uh mineral contracts and the White House reportedly turned down these these offers because they want kind of regime change now, right? Him stepping down now. So that's why it's also unlikely to to be this kind of negotiations and why we'll likely see an escalation to to attacks in land now. >> Okay. And is there any hope here on the on the White House as best you can tell of Maduro just changing his tune and saying, "Whoa, okay, US, sorry, you know, I didn't mean to be so off the page. I'm now going to get on the page with you and sure I'll open up to you and we'll start I'll I'll start doing some of more of the things you want." Is there any probability of that or are they kind of more hoping for um I think you said it's it's unrealistic to expect that they'll just honor the the previous election results, but are they kind of hoping that maybe like one of Maduro's lieutenants maybe kind of knifes him in the back and then says, "Hey, America, I'm I'm willing to play ball." >> Yeah. when when we think that the US raised the bounty on Maduro to 50 million on information that can lead to his arrest. We we have seen reports for example not only Trump openly spoke about authorizing CIA operations covert operations but there have been reports that the CIA tried for example to co-opt the pilot of Madura's plane and they would probably be aiming to do what they did to the Mexican cartel leader Elmo that they put him in a plane and then he thinks he's flying somewhere and then they take him I don't know Puerto Rico or El Salvador or something like that. Um so I think that there is this uh they are creating the room or giving the time perhaps for uh some development in that regard to to happen which is not necessarily uh Maduro stepping down willingly but someone else some other actor inside Venezuela taking uh a decision that leads to the regime change as I said before without necessarily uh Washington having its fingerprints in that just saying well we were just fighting drugs in the western hemisphere which is a priority for the Trump administration and the regime change happened to occur against this backdrop that would likely be the kind of narrative also to reduce the responsibility that they would have in terms of if they did not push for regime change like concretely they would have less responsibilities in securing uh boots on the grounds for the new government to to securely govern. So, so something in those lines as well. >> Okay. Um, do you sense a mounting time pressure here? Um, only because, you know, having a dozen warships and 15,000 troops just stationed off. It's not cheap, right? It's not something you can do forever. So, do you get a sense that things are building up to some sort of flash point here or could this last longer than I'm imagining? Yeah, there is certainly that sort of constraint both uh in terms of financial resources but also in terms of uh the mobilization of these military assets, right? Uh as I said before the US as Gerald Ford coming before it was stationed uh in Asia in the Middle East where you have more often at least higher military priorities. Um and then when you think even domestically in the United States to the extent uh now that Congress uh returned from uh the shutdown you may see some mobilization uh in Congress trying to block these sort of actions in the region. So we do see some time pressure. Uh and one of the drivers that we had in mind uh in terms of uh time frame was the designation of Carta de los Solis as a foreign terrorist organization as an FTO. This was on November the 24th. Of course, now you have a Thanksgiving and it's highly unlikely that an attack would occur during uh the holiday, but perhaps right after that, we see an increased likelihood that this next stage of operations that would be uh aerial attacks in land would start to occur. Uh we are thinking that the our assessment is that this will become increasingly likely in the coming days and weeks. >> Okay. Increasingly likely. But you think it's it's more under the guise of we're targeting cartel related uh assets. It's not we're trying to drive overtly regime change. We're just trying to take out the bad drug guys. You're nodding as I'm saying this, but one of the reasons why I'm I'm kind of pressing on this, and I'd love to hear your thoughts, is as an American, a regular American, I I don't get the sense that that Trump has the approval yet of the just the American public to go invade Venezuela. I mean, I think a lot of people are probably sympathetic to what he's doing there in terms of trying to, you know, overtly, you know, curtail the drug trade, but I don't think any American feels like, hey, I'm I'm not ready to sign up for this yet. In fact, no one's actually made the case to me why we should do this. And obviously, in theory, the president can't even declare war in another country himself. That's something Congress has to do. you know, leading up to say like Iraq, you know, there was long uh hearings where the current administration back then was was sort of selling Congress on why it needed to do this. Like none of that's gone on here. So, um, to your point, like I I think the American public would swallow sort of targeted surgical strikes on cartels, but I don't think they'd be cool about US troops, you know, running a shore off of a Navy warship to go fight a jungle battle to depose a dictator. Yes, that's that's pretty much in line with our assessment as well, Adam, in the sense that the political costs for the Trump administration would be significantly high. Not only we're not just talking about the opposition, but even uh his own support base, right? So that's why this scenario that consists of a military invasion with a large deployment boots on the ground to force regime change is uh alongside the one that I spoke earlier about of a negotiated solution. These are the two least likely ones with just 5% likelihood. And we agree that that's the the notion that it would be uh very unpopular for Trump to as he tried even as he tried to frame himself as the peace president and how uh he has promised to get the US out of the so-called forever wars and this kind of thing to engage in a new one that uh he would start. That's why it's also highly unlikely to to occur. >> Okay. One thing I didn't mention earlier about steps that were being taken against Venezuela was sanctions, but Venezuela is pretty heavily sanctioned by the US. Is there more that sanctions could do or do we kind of have them on max? And yeah, that's tricky because I think there is uh always room to to do more. Uh, one of the things that's still on the table that uh, the Trump administration actually revoked and then reinstated was a license that allows Chevron to operate in the country. So in May uh, the Trump administration suspended all uh, Western companies their kind of US treasury licenses to operate in Venezuela despite the sanctions. Uh but then in August it allowed Chevron just Chevron to resume but a very strict license that it cannot make payments in kind to uh the Maduro administration to the Maduro regime that basically it can swap oil with Pedvisa and then Pedvisa then exports this oil and generates some revenue but that's still a very important uh source of revenue to to the Venezuelan government. So if they wanted to take another critical final step in that regard, this could be it. But I would say that bulk of the sanctions they came during the Trump first administration because in 2017 uh it blocked Venezuela's access to financial markets. In 2018, it expanded the sanctions to block the purchase of Venezuelan debt. And then in 2019, it also sanctioned other important sectors in the economy. So oil, mining and and banking. So these set of sanctions from from the first Trump administration, they are the ones that have done uh the big negative economic uh uh blow to to the Venezuelan economy and they are still in place. >> Okay. And u Mario, I'm working my way to the opportunities part of this discussion, but a few more questions here. Um okay, so we've been talking about US strategy versus Venezuela here. What do the other South American countries think? Are they are they rooting for one side here? Yeah, Maduro became increasingly isolated even within South America, Latin America after uh the July 2024 elections because since he did not provide proof that he was elected, even other leftist countries in the region such as uh Brazil under President Alula or Colombia under President Petro uh governments that would be sympathetic to Maduru, they refused to recognize him as president. In addition to that, you had other countries in the region. Uh so leftist countries in Chile under Boric but also Uruguay, Paraguay, Panama, they recognized uh the opposition leader Gonzalez as the winner. Venezuela broke diplomatic ties. So he became really really isolated. But despite that, you still have countries and I would point again to Brazil and Colombia under leftist governments that although they do not openly support Maduro, they oppose a US military intervention in the region. So they uh it seems just uh in recent days that President Lulov Brazil uh was trying to get uh a phone call with Trump trying to discuss the issue for a negotiated solution something those lines. So while they do not necessarily back Maduro, I think they oppose even more a US uh military invasion or uh the US kind of forcing a regime change um by the use of of military force. >> All right. Do they support the US? Are they rooting for the US to find a way to get rid of Maduro that's just not doesn't involve military action? I'd say most of the countries uh likely because they recognize the opposition leader. they they have this understanding that Maduro uh is an illegitimate president, that all the negative economic impacts not only create problems inside Venezuela, but basically when you think about all the migration that uh kind of has come from Venezuela over the past decades, this has pressured countries in the region. So, Colombia, Peru, Chile, all our countries that not only had to deal with immigrants and the social issues that this entails, but because organized crime, uh, leverage, human trafficking in this kind of exodus, there has been an spike in violent crime or, uh, targeted killing, turf wars in countries which were considered safe before, such as Chile for example. Mhm. >> So these other countries that have to do with the kind of the fallout of uh the Venezuelan economic and social economic collapse for them it would be interesting for for their own interests that Venezuela becomes a more stable country that attracts back part of these migrants and that helps uh stabilize the region rather than uh continue deterioration that can drive uh more migration again for example that would be bad for for everyone. Okay. Um, you know, I' I've seen a little bit of this firsthand myself. My sister lives in Colombia and the last time I was down there, uh, I I remember being in Cartahinia and just walking around and and it was very clear that the um homeless people that were on the street were, you know, begging oftentimes, you know, pretty aggressively out of desperation. They were like, "Oh, those are all the Venezuelans." Um, you know, Venezuelans just seem to be pouring out of Venezuela, uh, just desperate, right? And they're, um, you know, Colombia has its own sort of underemployment problems, but the the Venezuelans are at the bottom of that that ladder. Um, it was just really acute and heartbreaking to to see the plight of those people. And so, you know, I know the Colombians didn't want them there. I know the Venezuelans probably didn't even want to be there themselves. They just didn't have another any other choice. So, I can see a lot of people rooting for just Venezuela to start solving some of its own problems and and probably most of them have come to the conclusion, as you said, that that's it's going to require somebody different than Maduro to to be doing that. Let me ask you this. What do the average Venezuelans themselves rooting for here? Do we know? Well, it's it's hard to to say in terms of statistics or polls, but I think uh the election from July 2024 is a very good proxy because back then, despite the repression, despite the government uh resorting to its own kind of social programs and cash handouts trying to retain some sort of popularity, uh the vote tallies that the opposition gathered and that have been verified so they can be uh trusted to an extent they indicate that Gonzalez Oruchia got more than 70 to 75% of the vote. So I think that's very telling to the extent uh to which there is uh limited support for Maduro. Of course that uh it's not to say that he is highly unpopular and if the US would uh were to invade Venezuela there would not be popular opposition that there would not be armed militias perhaps trying to fight to defend his government. But that would certainly be a minority. Uh while I think that um even though not all of these 75% would support for example military intervention uh they are more likely to oppose Maduru uh than not. >> Okay. And this is I'm just asking you to wildly speculate here, but if the US did get to the point of military intervention there, do you think the average people would join the US side in in in you know trying to dislodge physically the Maduro regime or is that expecting too much? I think when you try to to think of people taking sides and taking up arms for example for either side I think that would be a minority um both parts of the radicalized opposition that perhaps would be willing to engage in arms and also those willing to to defend the administration. part of our scenarios uh in which we see uh a regime change and a new administration trying to govern. Uh one of the consequences is if we have an armed conflict for example uh is an increase another humanitarian crisis in a sense that many people be displaced like thousands hundreds of thousands of people displaced either internally or even going again to other countries as we were talking about before Colombia, Peru, Ecuador, Chile, Brazil to some extent. uh so I I I don't think that we can expect uh a wave of support and that there will be uh close to a unanimous uh position in either in either way. I think more realistically uh you have parts of the population that side with both to the extent they are willing to to engage and parts that would be caught in the crossfire would be scared would be worried about I don't know their family their family members their case the elderly uh and would perhaps um be more uh willing to to relocate and either leave Venezuela again. Uh so I think that's part of the the scenarios how we anticipate things unfolding beyond just the political and economic implications. >> Okay. All right. Well, look, let's in the remaining time we have left, let's let's get to the um perhaps the more hopeful part of this discussion. So let's assume for a moment that there is a material change in Venezuela and that unlocks the opportunity for Venezuela and the US and Venezuela and other of you know kind of team America's allies um to start let's say driving through a lot of the reforms that that Miss Machado uh has been uh you know advocating for and and these are things like you know reopening Venezuela's um economy to the rest of the world. Foreign parties can come in and help Venezuela um better tap into its vast natural resources. Um hopefully we rebuild the Venezuelan economy and it starts bringing people home and people want to be there and all that good stuff, right? From your perspective, what are what are some of the biggest components of of of that opportunity? you know what is the what do the people who have been focused on this what are they hoping for most out of it I is it all about just the oil and gas revenue is it about other things what's the size of this opportunity uh for the peace dividend that this could yield um what do you think >> yeah the good thing is that Machado has an an economic team working on this and they have been as I said before kind of road showing this in business forums worldwide she's she's in hiding she uh has been participating remotely from interviews and uh this kind of uh events and the plan that they have envisioned uh talks about 1.7 trillion uh kind of dollars in opportunities over 15 years and around 40% of that so 680 billion would be concentrated in the extractive sector. of both oil and gas and mining. But the understanding that they need to go beyond that uh as well to also uh work on infrastructure to work on improving education and health in this idea that they need to improve social economic conditions to attract part of not only the the broad uh kind of migration that happened but to reverse the brain drain that Venezuela suffered. And another pillar would of course have to be infrastructure, right? So from electricity to water provision to to roads and all these um kind of sectors that would need to be rebuilt as you said. Uh and this would likely entail uh to some extent a stable political environment. Also uh what they have demonstrated so far this more pro business approach. So openness to the private sector with uh regulatory stability with clear uh kind of reinstitutionalization of the country with rule of law uh but it would still be a challenge to instill that confidence in investors right I think it's not only a change in rhetoric and approach that would be required um for um for investors to decide to to return to Venezuela especially if in a scenario in which There is still rebels fighting against the government. There is uncertainty if the government will be able to remain in power. And beyond that, when we think about minor issues, there is uh a column on Bloomberg today flagging that for example, even the need to rebuild uh Venezuela's kind of statistics because uh you don't have credible data anymore for for many many years. So all of that it just shows the extent to which uh it will be kind of a a very hard work to rebuild the institutions, rebuild the infrastructure, rebuild uh the economic sectors to attract uh the private sector to to kind of unleash the potential. But the good news is the oil is there, right? So uh it's just uh a matter of operationalize and secure environment that is favorable to to conducting business. >> Okay. Um I mean it sounds huge for Venezuela. I mean these numbers are still pretty big too uh to even countries like the US. So obviously there's the opportunity to come in and get ongoing revenues from helping Venezuela rebuild itself and tapping into its vast natural resources, all that stuff. Um uh then presumably it would also come with sort of some I don't know if guarantees is the right word, but um it would pull Venezuela more towards team America than towards and away from China and Russia and Iran and whatnot. So, it would advance the sort of Monroe Doctrine 2.0 aspirations of of the current administration. You're you're nodding as I'm saying all this. Um, I guess my question is sort of like how big of a deal is all this, right? If if if Venezuela flips from becoming a thorn in America's side to a tailwind to its aspirations, how big of a deal is that in sort of unlocking the full potential of the Monroe Doctrine 2.0? Yeah, it's a big deal because as you're saying before, it's not uh just uh Venezuela alone. I think this speaks to the way the Trump administration uh views the Western Hemisphere more broadly. So even uh in Venezuela, we're talking about removing a leftist autocracy from power. So uh an ideological uh adversary so to speak. But when we think about what the Trump administration has done for Argentina for example, which is uh an ally uh like libertarian president Javier Mle, it's very unprecedented the level of financial support with a 20 billion uh currency swap line that the Trump administration has provided just weeks before an election. uh the promise to work with private sector uh banks for another 20 billion which now it seems to to be has put kind of sheld but still uh so I think it really uh speaks to the importance that the Trump administration is going to the western hemisphere and also that reflects a realignment of the US visa v other regions. So if the US is to focus on the western hemisphere, it will likely uh retreat to some extent its presence in Europe, in the Middle East, in Asia, uh and then there is this understanding that the way that Trump views uh international relations and the spheres of influence, the US would be happy uh kind of having this hgeimony in the Western Hemisphere and leaving China perhaps to dominate uh Asia and Russia to deal with European So this is just like the tip of the iceberg of what could become a much broader geopolitical realignment u that lasts for decades for example. >> Okay. And from your perspective um if we're looking at this as the the grand game of risk, you know, played out by the great powers over the world, do you like America's odds here with the strategy? I mean, I I I kind of I kind of get the the logic of, hey, we stay here in our own hemisphere, right? We're protected on either side by these massive oceans, right? Um, and we're much more resourcer rich in many ways than most of those other parts of the world that you mentioned. uh and we have a lot of untapped resources and um a lot of potential for you know growth especially in the southern part of the hemisphere uh as as the the Latin American economies get get elevated. Um uh so I mean there's a lot to like about it and there's you know there's the circularity of okay so we've got some cheap labor down there but access to good resources and they're excited because we can help you know grow their economies but we like it because we've got a great trading partner and obviously America's still going to trade with the rest of the world but it it it I can understand the appeal of the logic. I just don't understand the world chess board the as well as you guys at Rain do. So what do you think? Yeah, I agree that there is a case to be built for for the upside that this could provide. But then as we say every time, right, where there is risk, there is opportunity. So uh to take into consideration what could be a potential risk, for example, this would be undoing a world order uh post the second world war, the Breton Woods and everything that followed that was built uh on top of US interests, right? So the institutions that we have uh governing uh from world finance toward international relations to US military presence by NATO in Europe by alliances uh >> in America has been transatlantically aligned since its formation. >> So be a change to that. Yeah. >> And it has expanded that right to have key allies in the Middle East in Southeast Asia. Uh so if you think about retreating from that, of course, yes, you'd be less exposed to engaging in conflict in those regions. You'd be less exposed to uh either participating in wars or or things like that, but you would have less capacity to influence developments there that also affect you. So there is also a flip side, right? So uh it's hard to say to have a yes no answer in the terms of is it better or is it worse good or bad but there is the kind of this considerations to take from both a sides of the argument that each of them perhaps have both risks and opportunities. >> Okay. Well um in our last couple minutes here Mario um I understand that you are a geopolitical analyst. You're you're not an e economist or um you know a a professional investor, but um what you know are there are there investment opportunities that you think are likely to present themselves as the situation unfolds? Um, I I guess I'll end it at that, but I'm I'm guessing maybe there are different investment opportunities whether they successfully transition Madura out of there to this great new future we're talking about. Um, or not. And if it doesn't work out well, there's probably ways to to trade that, too. But, but do you have any general thoughts on on any investment opportunities that that a a non-maduro future uh would would create for the average investor? Yeah, I think that we can refer to what we are seeing for example in uh Venezuela's uh bonds movements recently and that shows perhaps the appetite of uh investors and uh the way that they see uh the situation evolving. So um Venezuela has I think 160 billion uh in debt uh to restructure. it has defaulted uh 2017 and their bonds like traded as low as 10 cents of the dollar and they were just at 15 a couple of months ago. Now they're up to 30. Uh so there is this indication from financial markets themselves and of course we're talking about bond holders and this would be the kind of side uh of things but they are seeing a growing uh upside there. So uh in terms of depending on how the scenario evolves to which extent it's stable and it instills market uh markets and investors confidence there will likely be opportunities and there will likely be companies willing to to operate there. Just as I said like in as far as May we had more oil companies still operating in Venezuela until the US uh Treasury revokes their licenses. So uh there is uh different ways in which risk appetite works for the private sector and depending on the returns uh and the conditions on the ground there will certainly be room um for investments to to materialize. >> All right. Um Mario, thank you so much. Uh we're here at the end of the hour. Um this has been super educational. Um, I I very much hope that um if we have you back on in the future, it's for good reasons like some of the things that we hope happen are happening and you can make sense of it for that versus, you know, things ramp up militarily or or or god forbid, you know, continue to devolve from here. Um, but uh but thank you. When I do these, I usually try to do these as a live stream so the audience can ask their questions as well. Um, obviously I had enough questions to fill the hour here. Um, but we we we couldn't do a live stream this week anyways just because of of the Thanksgiving holiday and folks's travel and stuff like that. But when we have you on next, >> um, I will try to do it live so that the audience can ask their questions here as well. Um, last question for you, Mario. For people that have really found this discussion very enlightening and they would like to follow you and your work from here, where should they go? >> Yeah, thanks for having me, Adam. It was really a pleasure and glad to to be back in the future. And uh to reach us, just feel free to write to info@rainetwork.com. So info@ranetwork.com. Thanks. >> Great. And Mario, when I edit this, I'll put up the link there to that uh that email address so folks know exactly where to go if they want to contact you. Um >> really appreciate that. >> Yeah, this has been fantastic. So folks, um please thank Mario for coming on here and educating us about this very important issue. um join me in doing that doing so by hitting the like button and then clicking on the uh subscribe button below as well as that little bell icon right next to it. Um uh you know there are investment implications from this. If you'd like to get help from a professional financial adviser to think through how you might want to take advantage of them, feel free to schedule a free consultation with one of the financial adviserss that thoughtful money endorses. These are the firms you see with me on this channel week in and week out. To do that, just fill out the very short form at thoughtfulmoney.com. And as a reminder, these conversations are totally free. There's no expectation to work with these firms. It's just a service they offer to be helpful to investors. Um, Mario have really appreciated this. Um, I know you're down there in Brazil, so you guys don't necessarily have Thanksgiving there the way that Americans do, at least on the day that we do, but I still wish you a happy Thanksgiving. And, uh, like I said, I very much appreciate you sharing your deep expertise with us on this. And uh I I I would like to have you on the program again. And again, I hope it's for good reasons, not for bad. >> Yeah. Thank you. And happy Thanksgiving over there. >> All right. Thanks so much. And everybody else, thanks so much for watching.