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Venezuelans Chase Dollars Amid Worries Over Economy

Like many people they know in Caracas these days, Alfred and Norma Muñoz are bracing for what they believe is inevitable: a currency crash brought about by President Hugo Chávez's policies.

The middle-class couple plan to borrow as much as they can from a local bank and buy an apartment outside the country. If Venezuela's bolívar plunges against the dollar, they figure, the loan will be cheap to pay off in dollar terms, and the overseas apartment will hold its dollar value. "Plus, it gives you somewhere to flee if things really get bad," says Mr. Muñoz, who runs a small business.

At the moment, with oil at near record prices, Venezuela's economy is booming. The fourth-largest oil exporter to the U.S. has averaged 12.6% annual growth since 2004 -- the fastest in Latin America. Three-month waits to buy new cars are standard at Caracas dealerships amid a boom in consumer financing. Unemployment has fallen to single-digit rates for the first time in more than a decade.

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Venezuela's Chavez accuses Washington of trying to turn military against him

President Hugo Chavez said Sunday that the United States is trying to turn Venezuela's military against him to undermine a constitutional reform that could let him govern for decades. U.S. officials have denied similar accusations in the past.

Chavez, a former army lieutenant colonel who survived a short-lived 2002 coup, said his domestic opponents are collaborating with the U.S. Central Intelligence Agency to spur another putsch.

"The conspiracy has already begun. The messages are circulating in the barracks. The hand of the CIA, the empire, is behind this," Chavez said on his weekly radio and television program. "They are trying for a coup."

The Venezuelan leader did not elaborate or give evidence of the purported plot. He has made similar accusations before, which both opposition leaders and U.S. officials denied.

Last week, Chavez proposed a constitutional reform that would abolish limits on re-election and extend presidential terms from six to seven years. But he denies opponents' allegations that he wants to become a lifelong leader like his ally Fidel Castro of Cuba.

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Venezuela's Chavez calls for end to term limits

Venezuelan President Hugo Chavez called for an end to presidential term limits on Wednesday to extend his rule and consolidate a self-styled socialist revolution in the OPEC nation.

The leftist former soldier also proposed eliminating central bank autonomy, strengthening state expropriation powers and giving himself control over international reserves as part of an overhaul of Venezuela's constitution.

Chavez's left-wing policies have sparked the ire of critics and U.S. officials who brand him an authoritarian menace and accuse him of using Venezuela's oil wealth to undermine democracy, but his majority poor supporters have handed him repeated electoral victories.

Unveiling his constitutional reform plans, which need to be approved in a referendum vote, Chavez said presidential terms should be extended by one year to seven years without restrictions on re-election.

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Venezuela to Offer Bonds Again After Sale Flops Today

Venezuela plans to sell 200 billion bolivars ($93 million) of six-year bonds to local investors tomorrow after canceling a sale of the same securities today.

The bonds, which mature in November 2013, will pay an annual interest rate of 9.625 percent, the central bank said. Bond traders said the government refused today to pay the yields investors demanded on the securities. Public Credit Director Luis Davila, who manages the government's debt sales, wasn't immediately available for comment.

The sale flop comes just a week after Venezuela re-initiated local debt auctions to help raise cash to pay back maturing debt. The government sold bonds due in December 2012 last week to yield 9.16 percent. Accelerating inflation in the South American country is making investors balk at yields below 10 percent.

``The banks are telling the government: `We need something better than 9 percent,''' said Alejandro Gonzalez, a bond trader with brokerage Solfin Sociedad de Corretaje de Valores in Caracas. ``With inflation at 17 percent, 9 percent doesn't cut it.''

President Hugo Chavez has used a surge in oil income to boost government spending, fueling a surge in consumption that drove the annual inflation rate to 17.2 percent last month from 13.5 percent a year earlier.

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Chavez keeps up South American energy diplomacy

Venezuelan President Hugo Chavez on Wednesday carried pledges of energy investment to Uruguay, the latest stop on his South American tour aimed at bolstering his regional influence.

Chavez, on the second stop of a four-nation swing, said his country may invest in an Uruguayan plant to regasify liquid natural gas from Venezuela. He made a similar proposal this week in Argentina.

The Venezuelan leader has been offering oil or natural gas to energy-hungry South American neighbors, in an effort to counter Washington's influence in the region.

"We're talking about a regasification plant here too, another in Argentina, where the three countries could converge," Chavez told reporters in Montevideo.

Uruguay, a largely agricultural-exporting country of 3.3 million people wedged between Argentina and Brazil, imports all of its gas and oil supplies, some of which Venezuela provides at cut-rate prices.

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Venezuela's four-legged mobile libraries

A university in Venezuela is using a novel method to take books into remote communities and encourage people to read. As James Ingham reports, the scheme is proving a great success.

Chiquito and Cenizo greet me with a bit of a snort and a flick of the tail.
Mules are too tough to bother being sweet. They do a hard job which no other animal or human invention can do as well.

But these mules are rather special.

They are known as bibliomulas (book mules) and they are helping to spread the benefits of reading to people who are isolated from much of the world around them.

My trek started from the Valley of Momboy in Trujillo, one of Venezuela's three Andean states.
These are the foothills of the Andes but they are high enough, especially when you are walking.

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Venezuela Tries To Create Its Own Kind of Socialism

At a sleek, airy factory built by Venezuela's populist government, 80 workers churn out shoes -- basic and black and all of them to be shipped to Fidel Castro's Cuba, a leading economic partner.

With no manager or owner, the workers have an equal stake in a business celebrated as a shining alternative to the "savage capitalism" President Hugo Chávez constantly disparages.

"Here there are no chiefs, no managers," said Gustavo Zuñiga, one of the workers, explaining that a workers' assembly makes the big decisions.

There's also no need to compete -- production is wholly sustained by government orders.
Like the Venezuelan economy itself, the assembly line here is designed to put workers ahead of the bottom line and, in the process, serve as a building block in Chávez's dream of constructing what he calls 21st-century socialism. According to a 59-page economic blueprint for the next six years, free-market capitalism's influence will wane with the proliferation of state enterprises and mixed public-private firms called social production companies, the objective being to generate funding for community programs.

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Chavez Faces Setbacks in Pipeline Plans

President Hugo Chavez has long been angling to join the South American trade bloc Mercosur and win support for his proposal to build a natural gas pipeline across the continent. But Venezuela's cornerstone projects are running into resistance even among his allies, and analysts say the setbacks have come in part because countries such as Brazil want to maintain strong economic ties with Washington.

On Wednesday, Chavez accused the United States of undermining Venezuela's bid to enter Mercosur and of causing delays in plans for a vast gas pipeline stretching from Venezuela to Argentina.

"I'm sure these difficulties are the product of the empire's actions," he said during a televised speech.

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Venezuela, Cuba to begin oil exploration off the Caribbean island

Venezuela and Cuba will begin jointly exploring for oil in Cuban waters in the first such venture between the two nations, Venezuela's state-run oil company said Tuesday.

Petroleos de Venezuela SA, or PDVSA, said in a statement that the project with Cuba's CUPET energy company covers 10,000 square kilometers (3,860 square miles) and is scheduled to begin Wednesday.

The companies expect to discover light crude after conducting a seismic study, PDVSA said.

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Venezuela's Chacon Pledges New Broadcast Rules to Regulate RCTV

Venezuela will develop new rules to force RCTV International, a TV channel that moved to cable after losing its broadcast license, to submit to government regulation, Telecommunications Minister Jesse Chacon said.

Reacting to a Supreme Court ruling last night that suspended an order fining cable and satellite companies for transmitting RCTV, Chacon said the government will consult carriers on rules clarifying what makes a network domestic rather than international. RCTV claims international status, freeing it from regulation. The court held the law is unclear.

`` We respect the court decision but don't agree with it,'' Chacon said in remarks broadcast today in Caracas. ``No law in the world establishes a complete regulatory mechanism.''

Chavez's decision earlier this year not to renew the broadcast license for Radio Caracas Television triggered weeks of protests at home and condemnation abroad over what critics viewed as an attack on free speech. The television network, the country's oldest and most widely viewed, has been a staunch government critic.

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