Venezuela troubles (currency, economy and potential FAFO)

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They just need to do what Iran does and grab a few American's for ransom, and barry will send a plane loaded with the currency/currencies of your choice.
 
An alternative for folks who don't have a subscription to FT:
Members of Venezuela's opposition have met the government for talks as President Nicolas Maduro seeks to fend off calls for his removal.

Maduro launched the talks on Sunday night at a museum in western Caracas, held in the presence of mediators from the Vatican and former presidents of Spain, Panama and the Dominican Republic.

Some of Maduro's rivals fear they could be a stalling tactic designed to ease pressure on the unpopular socialist leader, who many Venezuelans blame for triple-digit inflation and widespread food and medicine shortages.

Fifteen parties belonging to the Democratic Unity opposition alliance boycotted the talks, saying they were not prepared to sit across from the government until it released several jailed opposition activists and reversed its decision to cancel a constitutionally allowed recall referendum against Maduro.

"For an eventual dialogue to take place it has to be very clear from the outset that the aim is agreeing on the terms of a democratic transition in the remainder of 2016," the parties said in a statement.
...
Last week the opposition alliance rallied tens of thousands of supporters across the country and another protest has been called for Thursday for which the opposition is pledging to march to the presidential palace.
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http://www.aljazeera.com/news/2016/...n-backed-talks-venezuela-161031063813013.html
 
Never go full Weimar Republic:
At a delicatessen counter in eastern Caracas, Humberto Gonzalez removes slices of salty white cheese from his scale and replaces them with a stack of bolivar notes handed over by his customer. The currency is so devalued and each purchase requires so many bills that instead of counting, he weighs them.

“It’s sad," Gonzalez says. "At this point, I think the cheese is worth more.”

It’s also one of the clearest signs yet that hyperinflation could be taking hold in a country that refuses to publish consumer-price data on a regular basis. Cash-weighing isn’t seen everywhere but is increasing, echoing scenes from some of the past century’s most-chaotic hyperinflation episodes: Post-World War I Germany, Yugoslavia in the 1990s and Zimbabwe a decade ago.

“When they start weighing cash, it’s a sign of runaway inflation,” said Jesus Casique, financial director of Capital Market Finance, a consulting firm. “But Venezuelans don’t know just how bad it is because the government refuses to publish figures.”
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More: http://www.bloomberg.com/news/artic...piles-of-cash-venezuelans-start-weighing-them
 
replace Maduro with ME !
I will guarantee everyone everything they need ......

What could possibly go wrong (-:
 
Seems like a good way to end up dead. Things aren't going to end well over there. Never do when people face mass starvation.
 
Venezuela, mired in an economic crisis and facing the world's highest inflation, will pull its largest bill, worth two U.S. cents on the black market, from circulation this week ahead of introducing new higher-value notes, President Nicolas Maduro said on Sunday.

The surprise move, announced by Maduro during an hours-long speech, is likely to worsen a cash crunch in Venezuela. Maduro said the 100-bolivar bill will be taken out of circulation on Wednesday and Venezuelans will have 10 days after that to exchange those notes at the central bank.

Critics slammed the move, which Maduro said was needed to combat contraband of the bills at the volatile Colombia-Venezuela border, as economically nonsensical, adding there would be no way to swap all the 100-bolivar bills in circulation in the time the president has allotted.

Central bank data showed that in November, there were more than six billion 100-bolivar bills in circulation, 48 percent of all bills and coins. Authorities on Thursday are due to start releasing six new notes and three new coins, the largest of which will be worth 20,000 bolivars, less than $5 on the streets.
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More: http://www.reuters.com/article/us-venezuela-economy-idUSKBN140115
 
He should just ban the stuff

It obviously doesnt work

If everything was digitised then some TBTF banks could simply agree the inflation rate twice a day and everything would automatically grow a few more zeros until peeps got confused and a few would be arbitrarily dropped ......

Simple really
 
...
As AP reports, President Nicolas Maduro on Monday ordered the closure of Venezuela's border with Colombia for 72 hours in a crackdown on currency smuggling by what he has called "mafias" trying to destabilize the socialist-run economy.
...
Venezuelans rushed to spend their 100-bolivar notes Monday, before the government's Wednesday deadline for taking the note out of circulation, and there also were logistical concerns about how authorities would remove the more than 6 billion 100-bolivar bills in circulation, and whether replacement bills were ready. Furthermore, as Bloomberg notes, according to a report by Torino Capital, a New York investment bank, the 100-bolivar notes account for more than three quarters of Venezuela’s cash outstanding and 11 percent of the nation’s money supply, making Maduro’s decree a difficult task for a nation in the throes of an economic crisis.

An estimated third of Venezuelans have no bank account and keep their savings in the soon-to-be-worthless bills. Venezuelans are in open revolt... (as Reuters reports)
Luis Volcanes, 36, had for six weeks withdrawn cash every day but on Monday ran around with a big brown envelope trying to deposit that same money, only to find cash machines at four banks in a row were not working.

"This seems crazy, like the government did this on a whim. I don't know what I'm going to do," Volcanes said as people trickled in and out of a bank in Caracas, complaining none of the machines worked.

One man unable to deposit money yelled, "This is total chaos!"

At least one shop owner threw his hands up in frustration.

Lucio Colombo, 47, who sells gifts and snacks in Caracas' wealthy Chacao district, has asked clients to pay in cash for the last two weeks because his credit card reader no longer works.

"So how do I get paid now?" he asked. "I was thinking of bringing my laptop so people can pay me by transfer - or I could just go on holiday. They are forcing me to stop working."
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http://www.zerohedge.com/news/2016-...order-after-banning-largest-denomination-bill
 
...
Just look at Venezuela, the country with the highest inflation rate in the world. The socialist nation has experienced a swift fall in oil prices, throwing the entire economy into turmoil. Experts say that Venezuelan inflation could go as high as 1,600%, leaving many people without basic necessities.

A 100 bolivar note—once the highest denomination offered in Venezuela—is now worth roughly about 2 cents. The country is printing higher-denomination notes so citizens don’t have to bring bags and bags of cash for transactions in stores, but this doesn’t solve the issue of poverty.

With the Venezuelan bolivar essentially worthless and supplies rapidly running out, Bitcoin is rising as an answer. According to Bitcoin brokerage Surbitcoin.com, the number of Venezuelan users skyrocketed, from 450 in August 2014 to more than 85,000 in November 2016.
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http://www.forbes.com/sites/realspi...sis-is-a-case-study-for-bitcoin/#3a298d9e3aa1
 
58fbf2dc1c168.png
 
Protesters sprawled in lawn chairs, worked on math homework and played cards on main roads around Venezuela's cities Monday, joining in sit-ins to disrupt traffic as the latest slap at the socialist government.

Thousands shut down the main highway in Caracas to express their anger with the increasingly embattled administration of President Nicolas Maduro. They turned the road into a kind of public plaza, with protesters settling in for picnics, reading books and reclining under umbrellas they brought to protect against the blazing Caribbean sun.

In the provinces, protests turned deadly. The public prosecutor announced that 54-year-old Renzo Rodriguez was killed by a gunshot to the chest Monday at a protest in the plains state of Barinas. In the mountain town of Merida, state worker Jesus Sulbaran was fatally shot in the neck at a pro-government rally. In addition, five people were injured at the Merida protest, Venezuela ombudsman Tarek William Saab said.

The two killings raised to 23 the number of deaths linked to unrest that began almost a month ago over the Supreme Court's decision to gut the opposition-controlled congress of its powers.
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http://www.wsoctv.com/news/national...ms-21st-victim-as-new-protests-loom/515571106

Gunmen killed two more people during political unrest in Venezuela on Monday, bringing the total number of deaths to 12 this month, as anti-government protests entered a fourth week with mass "sit-ins" to press for early elections.
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This month's turbulence is Venezuela's worst since 2014 when 43 people died in months of mayhem sparked by protests against Maduro, the 54-year-old successor to late leader Hugo Chavez.
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http://www.reuters.com/article/us-venezuela-politics-idUSKBN17Q1KO
 
wow ( from the above report )

Jesus shot in pro government rally

kinda spins ones head a bit (-;
 
...
The election result was never in doubt.

How the opposition politicians, the street fighters and Venezuela's security services react will determine whether or not the death toll rockets in the coming days.

The omens are not good.

Weeks of confrontation, flats raided and set on fire by the police, shootings of unarmed civilians, Molotov cocktails and roadside bombs, injured police, armed pro-government militias roaming the streets at night and now the military deployed. It's the stuff of nightmares.

The anti-government protesters had been calling the election day "D-Day" for a week and they are promising it is just the start.

Every announcement from the government on moves to change the constitution or the law will be met with yet further street protests.

Despite international condemnation and internal unrest, the government is ploughing on with its agenda of taking total control; and it is difficult to see what the opposition or its opposition-controlled parliament can do about it.

The new assembly, however illegitimate, is a higher body and the courts loaded with Maduro judges will support it.

With the more militant elements of the opposition already frustrated by what they see as inertia from their political leaders it seems likely that things really are going to get much worse.
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http://news.sky.com/story/venezuela-is-beginning-to-resemble-a-war-10968378

They are on course for all out civil war.
 
Civil war in a socialist utopia? That can't be right. That would mean sean penn, danny glover, micael moore, and all those other celebs & liberal politicians have been lying? :flail:
 
Venezuela's money, the bolivar, is sinking faster and faster under an intensifying political and economic crisis that has left citizens destitute and increasingly desperate.

Its depreciation accelerated this week, after a disputed vote electing an all-powerful "Constituent Assembly" filled with allies of President Nicolas Maduro, which the opposition and dozens of countries have called illegitimate.

On Thursday alone, the bolivar slumped nearly 15 percent on the black market, to be worth 17,000 to one US dollar.

In a year, the currency has lost 94 percent.
...
The government has sought to monopolize dollars in the country through strict currency controls that have been in place for the past 14 years. Access to them have become restricted for the private sector, with the consequence that food, medicines and basic items -- all imported -- have become scarce.

According to the International Monetary Fund, inflation in Venezuela is expected to soar above 700 percent this year.

In June, Maduro tried to clamp down on the black market trade in dollars through auctions of greenbacks at the weekly fixed rate, known as Dicom. There is also another official rate, of 10 bolivars per dollar, reserved for food and medicine imports.
...
The horizon is darkened further with big debt repayments Venezuela has to make, for instance $3.4 billion the state oil company PDVSA has to reimburse in October. That debt is denominated in dollars.
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http://www.france24.com/en/20170804-venezuelas-currency-crumbles-dizzying-speed
 
Venezuela this month allowed a $1.7 billion gold swap with Germany’s Deutsche Bank AG (DBKGn.DE) to lapse, according to an opposition legislator who said it weakens the balance sheet of the crisis-stricken OPEC nation’s central bank.

Through the operation, Venezuela had received $1.2 billion in cash in exchange for putting up $1.7 billion worth of gold in guarantee, part of efforts to improve the liquidity of foreign reserves amid heavy foreign debt payments and low oil prices.

Legislator Angel Alvarado said the contract’s expiration weakens international reserves, which are hovering near 21-year lows as the country’s socialist economic model collapses under low oil prices.

“Venezuela decided to allow this contract to lapse,” said Alvarado in a telephone interview on Monday. “We think the government could have negotiated better.”

The central bank will receive another $500 million in cash to reflect the difference between the amount of the loan and the value of the guarantee, said Alvarado, who obtained the information from finance industry sources.

Venezuela had to pay $1.2 billion by the middle of October to recover the gold, he said.
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Venezuela and state oil company PDVSA must pay nearly $3.5 billion in debt service in October and November, including maturity payments of $2 billion.

Bonds issued by Venezuela and PDVSA were down across the board on Monday, with some falling as much as 2.5 points.

Traders attributed the decline to increased nervousness over delayed coupon payments.

The heavy payment schedule has left the government with limited hard currency for imports of basic items such as food and medicine, spurring product shortages and leaving millions struggling to eat.
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http://www.reuters.com/article/us-v...utsche-to-lapse-legislator-idUSKBN1CS2CD?il=0

It's so sad really. Beautiful, fertile land. Rich in resources. But the people are trapped by their own culture and political ethos.
 
Yeah I saw this
Im slightly surprised that Venezuela still holds any of its gold.
DB knew how to relieve them of it.
EuroCB will print to cover it.

Assume all Venevuela's gold will be gone by the end of the year as its becoming the only asset they have (had ?) that they can meet their debt obligations with.

Time for the U.S. to up the sanctions ?
 
Venezuela was sold down the road by a man who painted a picture of a life that could never be. Chavez sold off their nations vast wealth a little bit at a time to buy the loyalty of the little people for a while, but when the money ran out, and all the brains left the country while they still could, it all collapsed. When Maduro took over, the country was well on the way to total collapse.
Now, in her death throes, Venezuela is no longer able to roll over debt and is unable to sell new bonds. Her gold is nearly gone and she only has a few billion dollars left. The government owned oil monopoly has been basically left to rot for so long that it is in total collapse right now and since they have no money, the heavy crude from the Orinoco belt cannot be pumped easily, since they cannot buy the light crude needed to mix with it so it will flow well enough to be pumped, since it is nearly the viscosity of tar.

The brain drain, coupled with the businesses that have been seized and ruined by the government and others that simply shut down have ruined the once proud, rich nation.

Socialism always works until it no longer does. It always looks good on paper, but cannot work in practice because the people in power will always carve out more for themselves, their families, friends an cronies first, leading to what we see in Venezuela.

What's next? Either all out civil insurrection/war or all out totalitarian clampdown and outright executions and shoot downs of protesting civilians to put it all down. Maduro will never concede power. He will be president until he dies or is killed.

I predict the military takes over at some point. We'll wait and see on this one, but it will happen far sooner than later, because the people have had it.
 
PVDSA made their bond payment in the nick of time, and at the very end of the grace period, but the end is still near. Venezuela is almost completely our of foreign reserves, as they are burning through the last nine billion dollars they have by paying debs that comes due. They have another payment coming up in a few days, but the end is inevitable, and Maduro is boxed in to a corner. I think military coup is in the air, but he is just too stupid to see it.
 
Its somewhat ironic that Murika and anyone with a central bank that is part of the club, can get away with what Maduro was planning on doing ........

That 'colonial empire' is currently based on hollow promises.

The amount of money 'printed' and fed back into the banking system, at no cost to those banks, could have cleared all the accrued debt and the world could now be busy building a new mountain of debt.

Ah well, a ponzi scheme that must expand in order to survive on a planet with finite resources, what could possibly go wrong ?
 
American sanctions are really starting to take hold. Maduro is boxed in and there's precious little he can do about it. His family is looking to the exits, but no one really wants to be the nation that takes them in. That makes them prisoners in their own country. If indeed the people grow a backbone and violently revolt, Maduro is fucked. His family will be left with nothing but prison sentences and Maduro will likely be killed, that is unless the military forms a coup and locks his ass in prison for his own safety.
 
Socialism always works until it no longer does. It always looks good on paper, but cannot work in practice because the people in power will always carve out more for themselves, their families, friends an cronies first, leading to what we see in Venezuela.
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I reckon all governments practise socialism ..... just enough to stay in power
Maduro is no different, he just happens to be Venezuela's sociopathic controller.

Without American sanctions ( which were triggered because he talked about going away from the petro dollar ) and if he was part of the 'control club', the currency would have been allowed to stay broadly in step with G10 currency printing and all would be pretty much as it has always been.
 
Although PDVSA said it paid an $842 million principal payment on its 2020 bonds due last Friday, the money has yet to materialize in the accounts of bondholders. Another $1.2 billion payment looms on Thursday. And to top it off, the clock is ticking on more than half a billion dollars in debt from the state oil firm and Nicolas Maduro’s government that are in a 30-day grace period. That said, if Venezuela can survive the next two weeks, it will be smoother sailing until the next big chunk of payments come due in April.
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https://www.bloomberg.com/news/arti...s-clock-keeps-ticking-venezuela-default-watch
 
Another set of bonds are in default, 1.2 bbn. worth this time, and the "negotiators" are going to sit around a table and talk "terms" with them. On the other hand, the people at the rating agencies are going to decide whether to trigger the CDS. If this happens, then it's game over for Venezuela, because their bonds now go in to the toilet, because no one will buy them at any price.

This is major shit people. A total trigger means Venezuela is completely locked out of all capitol markets and cannot get any foreign currency inputs from any investors. That means Maduro HAS TO GO. The military will have no choice but to chase him and his cronies out of the country in to exile in Peru or somewhere.
 
Its apparently the job of the ISDA to decide if there has been a default.

https://www2.isda.org/asset-classes/credit-derivatives/

In the last great banking crisis there were clearly several CDS defaults but the ISDA ruled on each occasion that there had been no actual default....

My suspicion at the time was that the controllers could not allow a default to register due to the contagion it would trigger.

I suspect there could be similar considerations that we are not aware of but it may also be that they wish to 'punish' Venezuela and have prepared the ground so the default is declared but any consequential default is managed away from the need to register it as a further default.
 
Thursday last week:
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Creditors have also asked finance industry association ISDA to determine if Venezuelan state oil company PDVSA [PDVSA.UL] is in default because of a delayed bond payment.

The International Swaps and Derivatives Association (ISDA) website showed that PDVSA was on its agenda for Friday at 11 a.m. EST (1600 GMT).
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https://www.reuters.com/article/us-...r-venezuelas-pdvsa-credit-event-idUSKBN1D9291

Friday last week:
A committee of derivatives industry group ISDA will reconvene on Monday to discuss whether Venezuelan state oil company PDVSA has triggered a credit event through a late payment of its 2017N bond, ISDA said on its website on Friday.
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https://www.reuters.com/article/us-...venezuelas-pdvsa-bond-on-monday-idUSKBN1DA2F3

Monday:
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The so-called Determinations Committee for the Americas, comprised of 15 financial firms, met in New York following an initial gathering last Friday, "to discuss whether a Failure to Pay Credit Event had occurred" with respect to PDVSA, according to the ISDA.

It ended up deciding to again postpone a decision until Tuesday.
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https://www.yahoo.com/news/venezuela-meets-creditors-debt-default-looms-164355622.html

Anyone think they will announce a decision today? Lulz.

How do you know she (PDVSA) is a witch (in default)?

 
I think sooner than later, Venezuela will have to be determined to be in direct default. This will be the great test of the CDS market. All those counter-party swaps held across the world will finally be shown for what they are.......worthless.
 
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Venezuelan bonds slid on Tuesday after S&P Global Ratings announced that Venezuela was in selective default for failing to make $200 million in overdue coupon payments on its 2019 and 2024 global issues within a 30-day grace period.
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On another flank of the country’s creditworthiness, a committee of the International Swaps and Derivatives Association (ISDA) is looking into whether PDVSA triggered a credit event through late payment of its 2017N bond this month.

The group said it would reconvene on Thursday to continue discussions of whether or not PDVSA was in default.

ISDA also said on Tuesday it had received another request from investors as to whether Venezuela had triggered a credit event due to the late payment of the coupon on its sovereign bonds.

Bondholders had told Reuters on Monday they had not yet received payments on the 2019 and 2024 bonds but were unconcerned about the delay, which they said was partly due to increased bank vigilance following the U.S. sanctions.

In its statement on Monday, S&P Global Ratings said it could raise Venezuela’s ratings again if the government made payments on the overdue coupons and remained timely on other payments before the restructuring is completed.

However, it said it saw a one-in-two chance that Venezuela could default again within the next three months and it listed a further four bonds with overdue coupon payments due in the coming weeks, with unpaid obligations totaling $420 million.

The Luxembourg Stock Exchange said on Tuesday said it was temporarily halting trading of Venezuela’s 2019 and 2024 bonds due to the “event of default” in order to make changes to the way in which the securities are traded.

Fitch Ratings also downgraded PDVSA due to “payment default” on notes due on Oct. 27 and Nov. 2 after “processing delays that resulted in bondholders receiving principal payments up to one week after the due date.”
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https://www.reuters.com/article/us-...rway-sp-calls-selective-default-idUSKBN1DE1QS

Venezuela couldn't find the cash to recover the gold they pawned, they aren't going to be paying back these bond debts. They are in deep doo doo.
 
hmmm

Those trouble making Russians are at it again (-:

https://www.geopoliticalmonitor.com/russian-debt-restructuring-keeps-venezuelan-government-afloat/

Seeing that Murika is intent on destroying the Venezuelan economy ( with Maduros help, obviously ) the best way to annoy Murika is to bail em out, no doubt in return for a bit of ownership of Venezuelas oil assets.
Why, Russia could take it all over and blend the low grade oil with some best Russian sweet light crude.
Some crypto currency support might add to the fun as well.
 
I don't think any amount of debt restructuring is going to prevent the inevitable default/crash.
 
Eggzactly 'Bug. Venezuela has several problems with her oil fields. One is simple neglect. They stopped maintaining them and diverted too much money to the "party". Then, they ran out of money they needed to buy light sweet crude to mix with the fookin tar they pump out of the Orinoco belt so it can be sold abroad and refined. Then, by stealing and expropriating businesses and breaking agreements they chased all the educated talent out of the country, leaving behind only middle management sorts who can't really handle things the way they need to be handled. The whole oil industry down there is in total collapse. It's not America that did it, it all started with Chavez and accelerated under Maduro. We're watching the death throes right now. Total collapse of the economy is just a matter of time now. They'll go full Zimbabwe within a year.
 
Dont worry Russia can fix it
and Zimbabwe
and the Middle East

not sure about Murika though (-;
 
They will have been looking at counterparties getting dragged in and been working hard to ensure it was all contained and managed before they finally declared a credit default.

Something of a non event ?
It didnt get much air time in the media, so perhaps not useful to the controllers to show what happens to disobedient countries when they default i.e. not a lot really.
 
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