Kenny Malone

Like in the Netherlands, when natural gas was discovered, international money poured into this new sector.

And that raised the value of Dutch currency in the global market, which is great, I guess.

Now, in Venezuela in the 1920s, it was like Dutch disease on steroids.

Remember, they had a coffee industry.

Terry Carl explained to us that the oil boom caused the bolivar, the Venezuelan currency, to skyrocket, which meant Venezuelan coffee was like suddenly way too expensive compared to coffee sold by other countries.

So which is to say they lose their entire economy up to that point.

Gone.

So in case you just heard a loud thump, that was Terry doing the motion of a switcheroo of commodities.

Yes.

Coffee to oil and whack on the old mic.

You'll also hear this called the paradox of plenty.

And the evidence for this is spotty as a general rule.

But Venezuela has become one of the cases that people point to.

And that happened during World War II, when the U.S.

needed massive amounts of oil from Venezuela.

And Venezuela's government realized how much money was leaving its country in barrels.

Chevron and the other seven sisters did not like it, but they didn't really have a choice.

Venezuela had the biggest and closest foreign source of oil for the U.S.

They had the upper hand.

So the sisters agreed.