This post was published at Operation Freedom
Henkel Garcia U, Andres Bello Catholic University (UCAB)
Venezuela, the South American country convulsed by economic and humanitarian catastrophe, has defaulted on some of its debt after missing an interest payment due in October.
Even as investors meet in Caracas to discuss restructuring US$60 billion in foreign debt, the country is in urgent need of international financial assistance.
Yet few nations are rushing in to offer financial assistance to the ailing country. Under the authoritarian regime of Nicols Maduro, Venezuela is isolated in Latin America, and the United States, Canada, and the European Union have all imposed sanctions against Venezuelan officials. Maduro has at times suggested he would not even accept humanitarian aid.
Still, no indebted nation is totally alone in this world. As a financial analyst, I know there are always international players who see opportunity in the problems of others. And for Venezuela, my home country, all hope of a bailout rests with China, Russia, and the International Monetary Fund.
Will they do anything to help?
This post was published at FinancialSense on THE CONVERSATION /1/15/2017.
Did you know that Venezuela just went into default? This should be an absolutely enormous story, but the mainstream media is being very quiet about it. Wall Street and other major financial centers around the globe could potentially be facing hundreds of millions of dollars in losses, and the ripple effects could be felt for years to come. Sovereign nations are not supposed to ever default on debt payments, and so this is a very rare occurrence indeed. I have been writing about Venezuela for years, and now the crisis that has been raging in that nation threatens to escalate to an entirely new level.
Things are already so bad in Venezuela that people have been eating dogs, cats and zoo animals, but now that Venezuela has officially defaulted, there will be no more loans from the rest of the world and the desperation will grow even deeper…
Venezuela, a nation spiraling into a humanitarian crisis, has missed a debt payment. It could soon face grim consequences.
The South American country defaulted on its debt, according to a statement issued Monday night by S&P Global Ratings. The agency said the 30-day grace period had expired for a payment that was due in October.
A debt default risks setting off a dangerous series of events that could exacerbate Venezuela’s food and medical shortages.
So what might that ‘dangerous series of events’ look like?
Well, Venezuela already has another 420 million dollars of debt payments that are overdue. Investors around the world are facing absolutely catastrophic losses, and the legal wrangling over this crisis could take many years to resolve. The following comes from Forbes…
This post was published at The Economic Collapse Blog on November 14th, 2017.
Back in January 2016, we showed what the collapse of Venezuela looks like, when in addition to charting Venezuela’s imploding currency (which back then was trading at a positive expensive 941 bolivars to the dollar), we presented what at the time was the IMF’s latest Venezuela inflation forecast, which stunned us as it surged from 275% in the just concluded 2015 to a whopping 720% at the end of 2016.
Fast forward nearly two years until today, when the IMF released its latest estimate of what it believes will happen to Venezuela’s economy in the coming year and a half. What is striking, besides the fact that Venezuela has somehow still managed to avoid bankruptcy, is that the IMF now expects Venezuela’s hyperinflation to reach a staggering 2,349% in 2018, after rising by “only” 626% this year, the highest estimate for any country tracked by the IMF. While the South American country stopped reporting economic data in 2015, the IMF estimates that last year inflation clocked in around 254%, a number which is set to soar in the coming years for obvious reasons.
This post was published at Zero Hedge on Oct 10, 2017.
[Editor’s note: This letter was co-written with Tim Price, co-founder of the VT Price Value portfolio and editor of Price Value International.] In the late spring of 1720, Sir Isaac Newton decided to sell his stocks.
Newton had been an investor in the South Sea Company, a famous enterprise which effectively commanded a trading monopoly with South America.
The investment had already made Newton a lot of money, he was up more than 100% in a very short time.
In fact, investors were clamoring to buy up the South Sea Company’s stock, and the share price kept climbing. And climbing.
Newton sensed that the market was getting overheated. It no longer made sense to him. So he sold.
There was only one problem: the share price of the South Sea Company kept climbing.
All of Newton’s friends were getting rich. So, against his better judgement, Newton went back in, repurchasing shares at more than three times the price of his original stake.
The market then collapsed, and he lost virtually all his life savings.
This post was published at Sovereign Man on September 18, 2017.
Authored by Darius Shahtahmasebi via TheAntiMedia.org,
Venezuelan President Nicolas Maduro said Thursday that Venezuela will be looking to ‘free’ itself from the U. S. dollar next week, Reuters reports. According to the outlet, Maduro will look to use the weakest of two official foreign exchange regimes (essentially the way Venezuela will manage its currency in relation to other currencies and the foreign exchange market), along with a basket of currencies.
According to Reuters, Maduro was referring to Venezuela’s current official exchange rate, known as DICOM, in which the dollar can be exchanged for 3,345 bolivars. At the strongest official rate, one dollar buys only 10 bolivars, which may be one of the reasons why Maduro wants to opt for some of the weaker exchange rates.
‘Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,’ Maduro said in a multi-hour address to a new legislative ‘superbody.’ He reportedly did not provide details of this new proposal. Maduro hinted that the South American country would look to using the yuan instead, among other currencies. ‘If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,’ Maduro also said.
This post was published at Zero Hedge on Sep 8, 2017.
Update 2: Following its decision to disband, which took place even as two more CEOs from the mfg council – the chiefs of J&J and United Tech – were announcing their resignations. Trump’s now defunct Strategy Council has just issued the following statement:
“As our members have expressed individually over the past several days, intolerance, racism and violence have absolutely no place in this country and are an affront to core American values. The President’s Strategic and Policy Forum was conceived as a bi-partisan group of business leaders called to serve our country by providing independent feedback and perspectives directly to the President on accelerating economic growth and job creation in the United States. We believe the debate over Forum participation has become a distraction from our well-intentioned and sincere desire to aid vital policy discussions on how to improve the lives of everyday Americans. As such, the President and we are disbanding the Forum. Job creation and supporting an inclusive pro-growth agenda remain vitally important to the progress of our country. As Americans, we are all united in our desire to see our country succeed.”
Meanwhile, as noted earlier, VP Pence will end his visit to South America early and fly home on Thursday, after the latest Trump scandal which led to the dissolution of two of his key economic advisory councils following the riots in Charlottesville, Va.
As AP reported previously, Pence will cut short his trip to South America, where he joined Chile President Michelle Bachelet for a joint press conference Wednesday on the political unrest in Venezuela. The vice president defended Trump just days ago as Trump drew bipartisan criticism for his remarks following the violent events in Charlottesville, and may return in order to directly address critics and steady the administration after the dissolution of the American Manufacturing Council and Strategy and Policy Forum.
This post was published at Zero Hedge on Aug 16, 2017.
The hyperinflationary-hell in Venezuela’s currency is deepening as a crippling dollar shortage and a threat of oil sanctions (amid President Maduro’s attempts to rewrite the constition to maintain his grip on power) take their toll on the economy.
Venezuela’s Latin American neighbors urged President Nicolas Maduro to refrain from actions that might exacerbate the country’s political crisis in a disappointment to some regional governments that favored more direct and forceful criticism. As Bloomberg reports, Mercosur, South America’s largest trade bloc, called on ‘the government and the opposition not to carry out any initiative that could divide further Venezuelan society or aggravate institutional conflicts,’ in a joint statement issued at the end of a summit in Mendoza, Argentina. Member countries Brazil, Argentina, Uruguay and Paraguay were joined by Chile, Colombia, Guyana and Mexico in signing the statement.
International condemnation of the Maduro government’s plan to rewrite the country’s constitution to maintain its hold on power is gathering pace after the U. S. said it would impose sanctions on Venezuelan officials if Maduro goes ahead.
As we noted earlier in the week, The Trump administration is mulling over sanctions against senior Venezuelan government officials, and additional measures could include sanctions against the country’s oil industry, such as halting imports into the U. S., according to senior Washington officials who spoke to media.
This post was published at Zero Hedge on Jul 22, 2017.
One thing certain of all politicians, no matter where in the world, they all lie. The US federal government, that captive political body beholding to Wall Street interests, also a subsidiary of the international bankers that controls the West and all fiat-issued currency, is one of the worst when it comes to lies and deceit, primarily because Europe can only play a poor second fiddle to federal US dictates. South America can offer no resistance, nor can South Africa.
China is beginning to flex its overblown might, and Russia, while in opposition, remains under attack by the West, led by the Neocons [Nazi-types] from the US Deep State trouble makers. The only thing the federal US government does is start wars, and if there is a war going on anywhere around the globe, the US is either directly or indirectly responsible. Wars feed the [fading but still formidable] military might as a means of keeping the fiat Ponzi scheme, aka the ‘dollar,’ alive as the [diminishing] world reserve fiat currency.
Every US administration, at least since the 16th president, Lincoln, in 1861, has been utterly deceitful to the American, indeed world-wide, public. Almost everything that comes from every administration is based on lies, lies, and more lies. Bush, the first, Clinton, Bush the second, Obama, and now Trump, have been ardent liars about everything.
The Bushes and Clinton were willing sycophants serving the interests of the elites at the expense of all Americans. ‘Yes, we can’-Obama was full of naive hope that quickly turned into yet another executioner for the elites, not fulfilling a single campaign promise and basing his entire presidency on selling the American interests to Wall Street and the international bankers. Obama was a sickening excuse for a president and hid his lying character from the American public.
This post was published at Edge Trader Plus on Saturday 1 July 2017.
This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
US Treasury Secretary Steve ‘The Munchkin’ Mnuchin said on Bloomberg News today that Treasury is still considering issuing ultra-long sovereign debt. This comes on the news that Argentina is issuing a 100 year sovereign bond that is in hot demand. Reuters – Argentina sold $2.75 billion of a hotly demanded 100-year bond in U. S. dollars on Monday, just over a year after emerging from its latest default, according to the government.
The South American country received $9.75 billion in orders for the bond, as investors eyed a yield of 7.9 percent in an otherwise low yielding fixed income market where pension funds need to lock in long-term returns.
Thanks to a stronger-than-expected peso currency, the government has increased its overall 2017 foreign currency bond issuance target to $12.75 billion from its previous plan of issuing $10 billion in international bonds, Finance Minister Luis Caputo told reporters in Buenos Aires.
This post was published at Wall Street Examiner by Anthony B Sanders ‘ June 20, 2017.
When we previewed yesterday unexpected announcement that Argentina would join Mexico, Ireland and the U. K. in issuing a 100 year bond, just one year after emerging from its latest default, we said “we expected the potential yield of 8.25% to come down as the offering will likely be many times oversubscribed.” It was.
According to Reuters, late on Monday Argentina sold $2.75 billion of a “hotly demanded” 100-year bond in U. S. dollars, and as expected the surge for yield resulted in 3.5x oversubscription: the South American country received $9.75 billion in orders for the bond, which in turn lowered the final yield to 7.9% with a 7.125% cash coupon, from the initial price talk of 8.25% in what Reuters dubbed an “otherwise low yielding fixed income market where pension funds need to lock in long-term returns.” Luckily for those same pension funds, they never have to worry about returns on capital as there is zero chance Argentina will not default again in the next 100 years.
Meanwhile, courtesy of yield-starved investors around the globe, the Argentina government increased its overall 2017 foreign currency bond issuance target even more, to $12.75 billion from its previous plan of issuing $10 billion in international bonds, Finance Minister Luis Caputo told reporters in Buenos Aires, in large part to fund its soaring budget deficit. As Reuters notes, Argentina will tap international capital markets to finance a fiscal deficit of 4.2% of GDP. Caputo said Argentina has $2.6 billion in bonds left to be issued this year. The new paper could be denominated in euros, yen or Swiss francs. It is not clear if the remaining issues will be in 100 year or longer maturities.
This post was published at Zero Hedge on Jun 20, 2017.
Violence in Venezuela, South America’s crumbling socialists paradise, is intensifying as street clashes between anti-government protesters and government forces enter their third month. At least 67 people have died since the demonstrations began, including 18-year-old Armando Canizales, who the New York Times described as a ‘success story of Venezuela’s state-run music program for the poor.’
As the country’s economic and humanitarian crises worsen, President Nicolas Maduro is taking steps to consolidate power within the presidency. Maduro is now calling for the formation of a new ‘constituent assembly’ that the country’s pro-government electoral council will vote on in July that will allow him to rewrite the country’s constitution before he faces an election in the fall. These decisions effectively guarantee that the violence will continue, as the opposition cries for his ouster.
The economic troubles – exacerbated by (but not initiated by) the drop in oil prices that began during the summer of 2014 – have caused inflation to soar above 10,000% as Venezuela’s currency, the bolivar, trades at a black-market rate of nearly 8,000 to the dollar, according to dolartoday.com. Meanwhile, the central bank’s foreign currency reserves have dwindled to $10.6 billion.
Venezuela, a member of OPEC, has the largest oil reserves of any nation on Earth. But OPEC’s fragile production cuts have failed to push the price of crude above $50 a barrel. On Tuesday, it announced that an unexpected surge in production by Iraq raised the bloc’s total production in May, validating the market’s doubts about an agreement between the bloc and a handful of other oil-exporting countries to extend a production cut that began in December. With global oil supplies near record highs, the hoped-for recovery in oil prices – key to alleviating Venezuela’s acute financial stress – is a long way off.
This post was published at Zero Hedge on Jun 13, 2017.
Days after Venezuela was rocked by the worst riots in over a year, with nearly 30 people dying in April from violence related to protests demanding the departure of Maduro who has again been accused of violating democratic norms, Maduro responded by hiking salaries and handing out free homes as he tries to counter a strengthening protest movement calling for his removal.
According to AP, Maduro said on his Sunday TV show that the minimum wage will rise 60% starting May 1. Workers will earn at least 200,000 bolivars per month including food subsidies. Sadly, in light of Venezuela’s hyperinflation, that amount to less than $50 at the black market exchange rate.
It’s the third wage increase this year as triple-digit inflation erodes workers’ savings. AP also notes that Maduro watched as authorities in several states handed over the keys to hundreds of new apartments.
Separately, Bloomberg reported that Venezuelans were gearing for demonstrations to mark International Workers’ Day, even as last month’s clashes prompting Pope Francis to renew his call for a negotiated solution to the crisis embroiling the South American country. The opposition will rally from 26 points across Caracas on a hot, rainy day in a march being promoted on social media with the hashtag ‘the people rebel against the coup.’
This post was published at Zero Hedge on May 1, 2017.
Venezuela, a country with only $10 billion left in reserves to run on, is in trouble. As the currency hyperinflates to new record lows against the dollar…
James Holbrooks points out that the people are starving. The government has gone full-on authoritarian, and now desperate human beings are dying in the streets. From an Associated Press report on Friday:
‘Authorities in Venezuela say 12 people were killed overnight following looting and violence in the South American nation’s capital amid a spiraling political crisis.’
This post was published at Zero Hedge on Apr 23, 2017.
Brazilian oil output in February was 14.6 percent higher year-over-year, according to the latest data released by ANP, the South American country’s petroleum regulator.
February production touched 2.676 million barrels per day, an ANP statement said, adding that natural gas output also rose 9.2 percent compared to the same month last year.
Figures released earlier in March from the nation’s Trade Ministry said that oil exports had jumped 94 percent year-over-year in February at 45.7 million barrels – a figure that topped the January 2017 record by 12 percent.
This post was published at Zero Hedge on Apr 4, 2017.
Everywhere we turn, politicians are abusing their power relentlessly. In Paraguay, the nation’s constitution prohibited the re-election of a president since 1992 after a brutal dictatorship of General Alfredo Stroessner’s 35-year hold on power, which made him South America’s most enduring dictator during the cold war. He eventually died in exile in Brazil after he fell from power in 1989.
Paraguay’s politicians voted after the Senate secretly voted for a constitutional amendment that would allow President Horacio Cartes to run for re-election opening the door to dictatorship once again. Protesters stormed the government building last week and set it on fire.
This post was published at Armstrong Economics on Apr 3, 2017.
As the minutes ticked by on the afternoon of April 28, 2015, Harold Vilches watched stoically while customs officers at Santiago’s international airport scrutinized his carry-on. Inside the roller bag was 44 pounds of solid gold, worth almost $800,000, and all the baby-faced, 21-year-old college student wanted was clearance to get on a red-eye to Miami. Vilches had arrived at the airport six hours early because he thought there might be some trouble – he’d heard that customs had recently seized shipments from competing smugglers. But Vilches had done this run, or sent people to do it, more than a dozen times, and he’d prepared his falsified export paperwork with extra care. He was pretty sure he wouldn’t have any trouble. While he waited, he texted his contacts in Florida, telling them he’d already cleared customs.
The plan was to hand off the gold at the Miami airport to a pair of guards, who would load it into an armored truck for the short trip to NTR Metals Miami LLC, a company that buys gold in quantities large and small and sells it into the global supply chain. The modesty of its shabby office, where a receptionist sits behind an inch-thick acrylic barrier, belies the amount of business that goes on inside. U.S. Department of Justice investigators believe NTR Metals Miami has bought at least $3 billion in South American gold in the past four years, much of it from illegal mining operations, people familiar with the investigation say.
Vilches didn’t need this headache. In just two years he had rapidly risen in the ranks of Latin American gold smugglers. Although he was barely old enough to order a beer in Miami, he’d won a $101 million contract to supply a gold dealer in Dubai. That hadn’t exactly worked out – the Dubai company was after him for $5.2 million it says he misappropriated – but still, in a brief career he’d acquired and then resold more than 4,000 lb. of gold, according to Chilean prosecutors. U.S. investigators and Chilean prosecutors suspect almost all of it was contraband.
That evening at the airport, Vilches employed his standard cover story, saying that the gold came from coins acquired from customers and recast as ingots. The customs officers weren’t buying it. The laboratory Vilches had used to vouch for the gold wasn’t government-certified, they said, and they doubted his claims that the gold had come from coins. Vilches was irate. He couldn’t believe it when the man behind the desk called his boss and then relayed orders from above: If it’s Vilches’s gold, seize it.
This post was published at bloomberg
The ninth largest economy in the entire world is currently experiencing ‘its longest and deepest recession in recorded history’, and in a country right next door people are being encouraged to label their trash so that the thousands upon thousands of desperately hungry people that are digging through trash bins on the streets can find discarded food more easily. Of course the two nations that I am talking about are Brazil and Venezuela. The Brazilian economy was once the seventh largest on the globe, but after shrinking for eight consecutive quarters it has now fallen to ninth place. And in Venezuela the economic collapse has gotten so bad that more than 70 percent of the population lost weight last year due to a severe lack of food. Most of us living in the northern hemisphere don’t think that anything like this could happen to us any time soon, but the truth is that trouble signs are already starting to erupt all around us. It is just a matter of time before the things currently happening in Brazil and Venezuela start happening here, but unfortunately most people are not heeding the warnings.
Just a few years ago, the Brazilian economy was absolutely roaring and it was being hailed as a model for the rest of the world to follow. But now Brazil’s GDP has been imploding for two years in a row, and this downturn is being described as ‘the worst recession in recorded history’ for that South American nation…
Latin America’s largest economy Brazil has contracted by 3.6 percent in 2016, shrinking for the second year in a row; statistics agency IBGE said on Tuesday. It confirmed the country is facing its longest and deepest recession in recorded history.
Data shows gross domestic product (GDP) fell for the eighth straight quarter in the three months to December, down 0.9 percent from the previous quarter. The figure was worse than the 0.5 percent decline economists had forecast and left the country’s overall GDP down 3.6 percent for the full year following a 3.8 percent drop in 2015.
This post was published at The Economic Collapse Blog on March 7th, 2017.
So the trade wars have begun. Less than 72 hrs into to his first term, President Donald Trump has wasted no time making good on a number of campaign pledges, including today’s signing of an executive order to pull the US out of the Trans-Pacific Partnership (TPP) trade deal.
The 12 nation deal was dubbed the ‘Gold Standard’ by former US Secretary of State Hillary Clinton, and was supposed to be the high-water mark of ex-President Barack Obama’s economic legacy – continuously championed by Obama and his backers on Wall Street, but was not yet approved by Congress.
The deal was initially designed for the US, Canada, Mexico, Japan, Australia, New Zealand, Malaysia, Singapore, Vietnam, Brunei, Chile and Peru, but plans to extend its corporate reach would eventually include all countries in South America and the Pacific Rim. The other 11 nation signatories will likely move ahead with the deal regardless of the US, but it will be a weaker play in terms of geopolitical leverage.
This latest announcement follows Trump’s inauguration speech, promising from now on to put ‘America First,’ while promoting the anti-globalization mantra of , ‘buy American and hire American.’
Said Trump: ‘We’ve been talking about this for a long time,’ adding that today’s move will be a ‘great thing for the American worker.’
This post was published at 21st Century Wire on JANUARY 23, 2017.
Venezuelans were wearily rushing to deposit bank notes or dump their cash savings entirely on Monday following an announcement by President Nicolas Maduro that he was invalidating the country’s biggest bill because of what he says is an attack on the nation’s liquidity.
The socialist leader shocked the country on Sunday when he said the 100-bolivar note would be removed from circulation within 72 hours. For months, the South American nation has suffered a hard-cash shortage as inflation spirals toward 500 percent, which Maduro insists is the product of an ‘economic war’ and an attempt by his political foes to smuggle currency out of Venezuela.
Maduro doubled down on those claims Monday evening, ordering an ‘inevitable, necessary, radical’ measure to close his country’s border with Colombia for three days while authorities yank the bills from circulation.
Higher-denominated bills are scheduled to be released this week, but Venezuelans, already reeling from a deep recession marked by triple-digit inflation and rampant shortages of consumer basics, seemed to let out a collective groan as they added an unscheduled trip to the bank to their list of woes.
This post was published at bloomberg