Venezuela troubles (currency, economy and potential FAFO)

Welcome to the Precious Metals Bug Forums

Welcome to the PMBug forums - a watering hole for folks interested in gold, silver, precious metals, sound money, investing, market and economic news, central bank monetary policies, politics and more.

Why not register an account and join the discussions? When you register an account and log in, you may enjoy additional benefits including no Google ads, market data/charts, access to trade/barter with the community and much more. Registering an account is free - you have nothing to lose!

Yeah, I'm quite sure they would not have delcared a credit event if they weren't 100% sure that the CDS didn't pose any systemic/contagion risk. That ruling was for PDVSA bonds that didn't get paid. It remains to be seen what happens when they have to rule on the Venezuelan government itself.
 
The Venezuelan currency will rise, many will invest in that country again. With the arrival of Petro things will be different!
 
Hi Christian, you live in Venezuela? How about a first hand report on what is happening in your country? I must say that I'm a bit surprised at your optimism. I don't see any foreign investment headed to Venezuela without a regime change and some established stability.


More: https://www.washingtonpost.com/amph...363398-f492-11e7-9af7-a50bc3300042_story.html

You can't get $1 out of the bank in Venezuela. I tried.

Four hours. Four banks. Six cents.
...

More: https://amp.cnn.com/money/2018/01/17/news/economy/venezuela-cash-crisis/index.html

Oh, and there is this...


http://in.mobile.reuters.com/article/amp/idINKBN1F52AD
 

More: http://demerarawaves.com/2018/02/18/guyana-keeps-eyes-on-possible-venezuelas-options/
 
Are they imploding yet? It sounds like they are imploding...


https://www.bloomberg.com/news/feat...b-for-gold-in-venezuela-s-most-dangerous-town
 
A similar strategy that Trump seems to have adopted then ?

Ok he hasnt put soldiers in charge of commercial operations but he does seem to want a cabinet that is centered around individuals with military interests.
 
A similar strategy that Trump seems to have adopted then ?

Ok he hasnt put soldiers in charge of commercial operations but he does seem to want a cabinet that is centered around individuals with military interests.

Since the primary focus of the federal government SHOULD be national security, it makes total sense to me to have his advisors be 'experts' in security.
 
Agree mmerlinn
but what if, as president, you feel threatened by others from within the state ?
Its a small step to go from national security to the thought that 'as president I am part of the nation and need to feel secure' .......
 

More: https://www.forbes.com/sites/kenrap...ives-dictator-maduro-47-million/#24c370366611
 

More: https://www.wral.com/swamped-in-inflation-venezuela-will-cut-five-zeros-from-currency/17774600/
 
It's not the same as the famous photos of wheelbarrows full of cash, but it's pretty close:
...

A toilet paper roll next to 2,600,000 bolivars, its price and the equivalent of 0.40 USD.
...

More images: https://widerimage.reuters.com/story/venezuelans-rush-to-shops-before-monetary-overhaul

Venezuela came to a standstill on Tuesday as the country tried to deal with its newly introduced currency.

Thousands of businesses closed in order to adapt to the "sovereign bolivar", and many workers stayed at home.
...

More: https://www.bbc.com/news/amp/world-latin-america-45262525


https://www.theguardian.com/world/2018/aug/26/venezuelan-mass-exodus-continues-amid-economic-turmoil
 

I'm thinking it would be better to use that cash itself as the TP, as it seems there's more "sheets" to wipe with using the stack vs. that roll.
 
The material used to make banknotes is not as good at eerr, clearing up and would likely block your drains, requiring a visit from a plumber, who would probably demand payment in TP ...........
 
Since the primary focus of the federal government SHOULD be national security, it makes total sense to me to have his advisors be 'experts' in security.

I disagree, the primary responsibility of the federal government should be protecting the natural, inalienable rights of the individual.
 

https://www.bloomberg.com/news/arti...zuela-5-billion-loan-as-maduro-visits-beijing

A "strategic alliance on gold mining"?

 

https://www.bloomberg.com/news/arti...anctions-on-venezuela-gold-to-pressure-maduro

Completely absent from media reports about the sanctions - any reference to Venezuela's "strategic alliance on gold mining" with China.
 
can someone remind me why the US feels the need to apply economic sanctions to a nation that is basically broke and whose only real resource ( its oil industry ) is broken ?
 
Apparently, using gold as money is a yuge problem.
 
1. how does a trade sanction stop this ?

2. As the controllers cannot admit this, what is the justification given ?

and as a general observation, doesnt this signal the importance of the barborus relic ?
 
1. No idea

2. No idea.

3. Yes.
 

https://www.reuters.com/article/us-...on-of-gold-from-britain-sources-idUSKCN1NA1Q7

"The Bank of England has sought to clarify what Venezuela wants to do with the gold ..."

What? If I make a withdrawal at a bank, and the banks "seeks to clarify what I want to do with my money", I tell them instead of a withdrawal, I'm closing my account. It's none of their business. Maybe the reporting here was just really bad (vague) and they meant they sought clarity in how the gold was to be shipped, but as written, the sentence is a head scratcher.

Held up for two months because insurance? Right... They manged to ship 160 tonnes home in 2011 but now face insurmountable hurdles shipping 14 tonnes. Very believable.

"But even if Venezuela manages to repatriate the gold ..."

I find it really odd for Reuters to suggest that Venezuela would not be able to repatriate their gold.
 
My guess is that that there are a lot of claims on that gold. There are currently a hell of a lot of unpaid vendors owed a boatload of money by Venezuela, and they are all waiting in line for their pound of flesh. That tiny bit of gold would do a little bit to pay a few creditors, but my money goes towards the cronies taking a huge vig for themselves and spending the rest on everything besides infrastructure or medicine for the people.

That is probably why the delay.
 
Ah yes the BOE wants to be sure it goes to help the starving population

They are probably putting together a couple of boatloads of out of date food and pharmacuticals and keeping the gold as payment ...............

Of course it will be stolen/ mis-appropriated, the Central Banks of the world have already shown us how its done, many times over.

To who does the gold belong and how does it get to them ? Dont ask )-:
 
So it looks like I might have understood that Reuters report correctly...


https://www.thetimes.co.uk/article/...g-venezuela-s-gold-back-from-the-uk-0p29xp99w

I really don't see where the BoE has any jurisdiction to police financial crimes in other countries. What a wacky world we live in today.
 
The same 'logic' could be applied to any fiat money the bank holds on anyones behalf .....

This is a worrying principle to add to their 'justifications' already in place to stop honestly held assets from returning to their lawful owner.
 
... and here is the crux of the matter:
https://www.washingtontimes.com/news/2018/nov/13/nicolas-maduro-venezuela-gold-targeted-trump/
 

http://amp.miamiherald.com/news/nation-world/world/americas/venezuela/article222443960.html


More: https://www.bloomberg.com/amp/news/...-to-tell-imf-that-inflation-hit-860-last-year


https://www.rt.com/business/445526-maduro-defends-venezuela-gold/
 


note, its properly cataloged as belonging to the Venezuelan people !

Does this apply to gold held by other countries ?
Perhaps it could all be returned to its rightful owners ?
 
It's probably typical hot air bluster, but Maduro's quote in the last snippet really stood out to me.
We are moving forward with the plan on gold output as the new source of prosperity

Does this mean that the Chinese gold mining deal they struck is more lucrative than their oil industry (PDVSA)? Or maybe PDVSA is too broken now to continue functioning as a business engine. Either way, I have a hard time imagining that Venezuela's gold mining industry could sustain the entire country's economy.
 
So you might recall that two months ago, Venezuela announced a "strategic alliance on gold mining" with China: https://www.pmbug.com/forum/f4/vene...rrency-devaluation-2830/index5.html#post33494

I wonder how China feels about Russia potentially moving in on that business:
https://www.rt.com/business/447438-venezuela-russia-gold-exploration/
 
Unlikely Russia or China are going to be that interested as Venezuela has a bad track record with such arrangements .......

A deep water port might be of interest though ?
 
Considering history with the Cuban Missile crisis, I'd be really surprised if Venezuela opened the door for either nation to establish a significant military presence there. But these are (apparently) desperate times, so who knows what they might do.
 
.

I would like to think the Monroe doctrine would apply here. I know it was meant for European countries, while part of Russia lies in Europe, I consider it an Asian country & of course China is 100% in Asia, maybe a few small islands that aren't technically part of Asia. Letting them become the puppet master of a puppet govt. & letting them establish a strong presence that close to our border is not something I want to see. I doubt if the dummy in the White House even knows what the Monroe doctrine is, hopefully someone can explain it to him without him attacking them of twitter. $.02

.
 
Is there a reverse Monroe doctrine that might stop the bringers of democracy ( NATO ) from setting up bases in places like Poland or Ukraine or even Afghanistan ?
 

https://ahvalnews.com/venezuela-turkey/turkey-set-refine-more-venezuelan-gold-maduro-sends-committee

So Venezuela is getting China and Russia to help mine their gold and then they ship it across the globe to Turkey to be refined. Crazy. Except having the refined gold in turkey does offer a wide range of opportunity for trading it away.
 
So you might remember back in October of 2017, Venezuela let a gold swap with Deutsche Bank lapse (as mentioned here). Apparently, they continued to load gold to DB and recently actually paid off one of those loans:
https://www.reuters.com/article/ven...d-soar-on-deutsche-deal-sources-idUSL1N1ZI19I
 
Cookies are required to use this site. You must accept them to continue using the site. Learn more…