• Tag Archives Venezuela
  • Venezuela’s ‘Goldman Bounce’ In Reserves Is Gone

    The boost in foreign reserves Venezuela enjoyed after Goldman Sachs investment arm picked up $2.8 billion of bonds from the state oil company is almost gone.
    “We’re gonna need another boost…” – time for some more Goldman ‘swaps’?

    This post was published at Zero Hedge on Jun 17, 2017.


  • “Lynching Epidemic” Breaks Out In Venezuela

    The public-safety infrastructure in Venezuela has been degraded to such a degree that citizens now take justice into their own hands. Agence France Presse reported that lynchings have risen sharply over the last year and a half as political and economic instability in the crumbling socialist republic has worsened. Witnesses who spoke to AFP said a 22-year-old man who was set on fire at an anti-government demonstration in May was actually lynched after being accused of stealing by the crowd – not because he was a government sympathizer, as President Nicolas Maduro had suggested at the time.
    As AFP alleges, “it is not just the country’s economy and political system that are sick, but society itself, experts say. An epidemic of lynchings is one of the most gruesome symptoms.“


    This post was published at Zero Hedge on Jun 16, 2017.


  • Cuba Scrambles As Venezuela’s Oil Industry Collapses

    As Venezuela’s oil industry goes down it flames, it’s looking like it may just take Cuba down with it.
    ***
    Venezuela, once the crude powerhouse of South and Central America, is no longer able to produce enough oil to sustain its own economy, much less those of other countries. Cuba is frantically drilling in search for new reserves and reaching out for new suppliers, but there is no guarantee they’ll be able to stabilize their oil income any time soon.
    Cuba became dependent on Venezuelan oil in the 1990s, when they were sold cut-price crude in exchange for the services of skilled laborers in order to bail them out of economic collapse in the wake of the fall of the Soviet Union. Currently, Cuba relies on foreign oil for more than two thirds of its daily consumption, with over 100,000 barrels of crude flowing from Venezuela every day for years. Now, quite suddenly, their dependence on Venezuelan oil has been forced to come to a bitter end.

    This post was published at Zero Hedge on Jun 14, 2017.


  • Dramatic Images From 3 Months Of Deadly Anti-Government Protests In Venezuela

    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.


  • Why Do Half-Measures Work for Markets, But Not for Socialism?

    Socialists have attempted many times to put their ideology into action. Socialism has been applied in the Soviet Union, Cuba, China (before Deng), North Korea, and by many other less-famous regimes.
    In each case, the result has been economic impoverishment and political authoritarianism.
    But the die-hard socialists refuse to give up. “Don’t judge communism based on these results, ” we’re told. “Socialism has simply never really been tried.”
    Socialism Doesn’t Work Unless It’s Pure Socialism Indeed, in a recent back-and-forth between John Stossel and Noam Chomsky, Chomsky denied that the Venezuelan regime is socialist at all:
    I never described Chavez’s state capitalist government as ‘socialist’ or even hinted at such an absurdity. It was quite remote from socialism. Private capitalism remained … Capitalists were free to undermine the economy in all sorts of ways, like massive export of capital.

    This post was published at Ludwig von Mises Institute on May 31, 2017.


  • When Does Buying Gov’t Bonds Support Corrupt Governments?

    The president of Venezuela’s opposition-run Congress led by Julio Borges came out and accused Goldman Sachs of ‘aiding and abetting the country’s dictatorial regime’ after a report that Goldman had bought $2.8 billion in bonds from the cash-strapped country at 31 cents on the dollar. They paid $865 million.
    There have been two months of opposition protests against President Nicolas Maduro in which almost 60 people have been killed. The collapse of the country’s socialist economy has left millions of people struggling to even eat. This is the problem with ‘socialism’ that it is incapable of managing the economy from any centralized government. They hate people who make money, but government is just incompetent to manage anything. It takes an individual on the front lines to manage any operation.

    This post was published at Armstrong Economics on May 31, 2017.


  • Goldman Accused Of Funding Maduro’s Dictatorship

    In late April, the Venezuela opposition slammed attempts by the Maduro regime to liquidate some/all of the nation’s gold in order to buy his crumbling regime some additional time with much needed liquidity.
    As we reported then, in a letter sent by National Assembly President and head of the Venezuela opposition to US banks, Julio Borges, the politician wrote that ‘the national government, through the central bank, is going to try to swap gold held as reserves for dollars to stay in power unconstitutionally. I have the obligation to warn you that by supporting such a gold swap you would be taking actions favoring a government that’s been recognized as dictatorial by the international community.’
    Fast forward to this weekend, when the Wall Street Journal reported that Goldman Sachs had bought some $2.8 billion in bonds issued by state oil company PDVSA that mature in 2022, paying 31 cents on the dollar or around $865 million. The price represented a 31% discount to trading Venezuelan securities that mature the same year, and would result in a staggering annual yield of more than 40%.
    The purchase came as Maduro’s detractors have been pleading with international financial institutions to avoid any transactions that might help a government accused of human-rights abuses. It also prompted Julio Borges to accuse bank Goldman Sachs of “aiding and abetting the country’s dictatorial regime.”
    “Goldman Sachs’ financial lifeline to the regime will serve to strengthen the brutal repression unleashed against the hundreds of thousands of Venezuelans peacefully protesting for political change in the country,” wrote Julio Borges in a letter to Goldman Sachs President Lloyd Blankfein.

    This post was published at Zero Hedge on May 30, 2017.


  • GOLDMAN SACHS IS FINANCING VENEZUELA’S SOCIALIST DISASTER

    Nothing to see here. Just another failed attempt at socialism. The opposition forces are finally figuring it all out too. The government is in control, not the people, and Julio Borges is blaming Goldman Sachs for financing the all-but-failed democratic socialist nation.
    The president of Venezuela’s opposition-run Congress on Monday accused Wall Street investment bank Goldman Sachs of ‘aiding and abetting the country’s dictatorial regime’ following a report that it had bought $2.8 billion in bonds from the cash-strapped tyrannical country. The Wall Street Journal on Sunday said Goldman paid 31 cents on the dollar for bonds issued by state oil company PDVSA that mature in 2022, or around $865 million, citing five people familiar with the transaction.
    Known as the world’s worst oil company, for being completely run by the tyrannical government in Venezuela, PDVSA is the socialist nation’s government. The oil company’s exports account for 93% of the country’s exports. And socialist opposition forces are now blaming the Wall Street bank, Goldman Sachs, for propping up the regime by buying the bonds. Julio Borges, President of the National Assembly and Deputy of the Venezuelan coalition of opposition parties wrote a letter to Goldman Sachs president, Lloyd Blankfein, and calmly stated to him that his financial contributions are propping up the ‘brutal regime’ that’s killing its own people through starvation and violent clashes.

    This post was published at The Daily Sheeple on MAY 30, 2017.


  • Goldman Sachs Accused of ‘Aiding and Abetting’ Venezuela’s ‘Dictatorial Regime’

    A very risky deal with a huge yield.
    It didn’t take long for sparks to fly after the Wall Street Journal reported on Sunday that, ‘according to five people familiar with the transaction,’ the asset management division of Goldman Sachs had bought Venezuelan bonds with a face value of $2.8 billion from the Central Bank of Venezuela that it had held as part of its international reserves.
    The sale of the bonds – issued by state-owned oil company Petrleos de Venezuela S. A. (PDVSA) in 2014 and due in 2022 – was completed on Thursday, according to the sources. That day and on Friday, the central bank’s international reserves jumped by $749 million, to around $10.86 billion, Reuters reported today. According to Reuters’s sources, including one at Goldman – oh my, all these leaks – the negotiations took place via middlemen in Europe.
    This cash, as the Wall Street Journal put it, is ‘a lifeline to President Nicols Maduro’s embattled government as it scrambles to raise funds in the midst of widening civil unrest.’ The Journal describers the economic and social situation the Maduro regime is presiding over this way:
    Mr. Maduro’s increasing authoritarianism coupled with critical food and medicine shortages have spawned two months of almost-daily street demonstrations, costing at least 60 lives. The economy is also suffering, having shrunk 27% since 2013. Venezuela is saddled with what the International Monetary Fund estimates will be an inflation rate of 720% this year.

    This post was published at Wolf Street on May 29, 2017.


  • TINA’s Legacy: Free Money, Bread and Circuses and Collapse

    TINA’s legacy is revealed in this chart of the Venezuelan Bolivar, which has plummeted from 10 to the US dollar to 5,800 to the USD in a few years of rampant money-emission. Every conventional “solution” to the systemic ills of our economy and society boils down to some version of free money: Universal Basic Income (UBI) schemes– free money for everyone, funded by borrowing from future taxpayers (robots, people, Martians, any fantasy will do); debt jubilees funded by central banks creating trillions out of thin air, a.k.a. free money, and so on. Free money is compelling because, well, it’s free, and it solves all the problems created by burdensome debt and declining incomes for the bottom 95%. Just give every household $100,000 of free money that must be devoted to reducing interest, then give every household $20,000 annually for being among the living, and hey, a lot of problems go away. But is creating money out of thin air really truly free? There are two appealing answers: yes and yes. If the Treasury literally prints money, it’s almost “free,” and if the Federal Reserve creates money and buys bonds paying near-zero yields, the money that is borrowed into existence is almost free because the interest due is so minimal.

    This post was published at Charles Hugh Smith on SUNDAY, MAY 21, 2017.


  • Venezuela Rises Up

    On April 4, 2017, Venezuelans decided they had had enough. Enough of the shortages. Enough of the interminable store lines. Enough of the hunger, and of the inflation, and of the crime and of the government’s crackdown on the opposition. Enough of everything.
    In cities all across the country that day, they took to the streets to protest.
    And haven’t left since.
    For 44 days and nights, they have demonstrated against President Nicols Maduro almost without pause. At times they’ve been peaceful; at other times violent. Government forces and militia groups have responded with an iron fist. They’ve beaten scores of protesters, dragged some in front of military tribunals and killed others.
    At last count, the death toll was 43.

    This post was published at bloomberg


  • Venezuela’s Oil Production On The Brink Of Collapse

    Desperation is spreading in Venezuela as violent protests continue to paralyze the country, further damaging the country’s shattered economy. Venezuela’s already-decrepit oil industry is deteriorating by the day, and an outright implosion is no longer out of the question.
    The inflation rate, according to the IMF, will balloon to 720 percent this year. Food shortages have been common for quite some time, but are deepening and wearing down the population. Three out of four people surveyed by the WSJ reported involuntary weight loss last year. Hospitals have completely broken down.
    Venezuela has been crippled by protests since late March, with more than three dozen people having been killed over the past two months, and there is no sign of improvement. This meltdown is taking a toll on Venezuela’s oil production, the last thing keeping the country from becoming a failed state. Venezuela’s oil production has been declining for more than a decade, mainly because oil revenues are used to finance the government, leaving little for state-owned PDVSA to reinvest in its operations.

    This post was published at Zero Hedge on May 18, 2017.


  • MAY 8/FOR 6 STRAIGHT DAYS, THE AMOUNT OF SILVER OUNCES STANDING FOR DELIVERY INCREASED: FIRST DAY NOTICE STARTED AT 16.8 MILLION OZ/TODAY: 21.5 MILLION OZ/CHINA’S ECONOMY SLOWING DOWN DRAMATICALL…

    Gold: $1227.70 UP $.50
    Silver: $16.27 DOWN 1 cent(s)
    Closing access prices:
    Gold $xxxx
    silver: $xxx
    XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1241.52 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: 1230.65
    PREMIUM FIRST FIX: $10.87
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    SECOND SHANGHAI GOLD FIX: $1240.25
    NY GOLD PRICE AT THE EXACT SAME TIME: 1230.25
    Premium of Shanghai 2nd fix/NY:$10.20
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    LONDON FIRST GOLD FIX: 5:30 am est $1229.70
    NY PRICING AT THE EXACT SAME TIME: $1229.70
    LONDON SECOND GOLD FIX 10 AM: $1229.80
    NY PRICING AT THE EXACT SAME TIME. $1229.80
    For comex gold:
    MAY/
    NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 15 NOTICE(S) FOR 1500 OZ.
    TOTAL NOTICES SO FAR: 374 FOR 37400 OZ (1.1632 TONNES)
    For silver:
    For silver: MAY
    99 NOTICES FILED TODAY FOR 495,000 OZ/
    Total number of notices filed so far this month: 4107 for 20,535,000 oz

    This post was published at Harvey Organ Blog on May 8, 2017.


  • Waiter and Bartender jobs surge in the Land of the Free

    The headline in the New York Times today read ‘U. S. Job Growth Bounces Back; Unemployment at 10-Year Low’.
    That’s certainly one way of looking at it.
    The US Department of Labor released its regular jobs report this morning showing the official unemployment rate is just 4.4% in the Land of the Free.
    That’s certainly a strong number; I’m sure plenty of people in Venezuela and Turkey would love to have an unemployment rate at even twice that figure.
    But when you actually dive into the statistics, the optimism starts to fade a bit.
    It turns out that the #1 driver of job growth in the United States is ‘Leisure and Hospitality’, which is how the Department of Labor categorizes food service jobs.

    This post was published at Sovereign Man on May 5, 2017.


  • Selling the Golden Goose — Jeff Thomas

    Venezuela is a naturally rich nation. It’s ranked seventh worldwide for biodiversity and has the world’s largest reserves of oil. This is a country that deserves, more than most, to thrive. However, as in all countries, it passes through economic cycles and, when on a downward curve, would-be leaders take the opportunity to claim that the ‘greedy rich’ have sent the economy into a tailspin (which can sometimes be the case) and that the solution is to adopt a collectivist approach to governance.
    In 1989, Venezuela was experiencing a downturn. Riots broke out, followed by two attempted coups in 1992. The following year, President Prez was impeached for embezzlement of public funds and the red carpet of opportunity was rolled out for the charismatic former coup participant Hugo Chvez. He took office as president in 1998. A new constitution was drawn up in 1999 and, as in so many countries previously, the people enthusiastically welcomed the new collectivist regime.
    As in all collectivist experiments, the new entitlements meted out to the population had to be funded somehow and, as is customary, those who create the wealth in Venezuela were required to pay for its distribution to those who were less productive.
    In the beginning, this form of theft appears to work well and, not surprisingly, many of the supporters of Mister Chvez saw him as the messiah of the common man. Unfortunately, as is always the case, bleeding the wealth from those who create it makes it increasingly difficult for them to continue to expand the creation of it and, as the wealth continues to be drained, contraction eventually takes place, making the entire nation poorer in every way.

    This post was published at International Man


  • Maduro Hands Out Free Homes, Hikes Minimum Wages To Counter Angry Protest Wave

    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.


  • MAY 1/CHINA AND EUROPE CLOSED (THE PHYSICAL MARKETS) SO AN IDEAL TIME TO RAID GOLD/SILVER/WAR OF WORDS ESCALATE WITH RESPECT TO NORTH KOREA AND THE USA/CHINESE RELFLATION TRADE JUST HIT A BRICK W…

    Gold: $1254.30 down 11.80
    Silver: $17.62 DOWN 38 cents
    Closing access prices:
    Gold $1257.00
    silver: $16.86!!!
    XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1275.98 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: 1264.40
    PREMIUM FIRST FIX: $11.58
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    SECOND SHANGHAI GOLD FIX: $1277.11
    NY GOLD PRICE AT THE EXACT SAME TIME: 1263.09
    Premium of Shanghai 2nd fix/NY:$14.02
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    LONDON FIRST GOLD FIX: 5:30 am est $xxx
    NY PRICING AT THE EXACT SAME TIME: $xxx
    LONDON SECOND GOLD FIX 10 AM: $xxxx
    NY PRICING AT THE EXACT SAME TIME. xxx
    For comex gold:
    MAY/
    NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 12 NOTICE(S) FOR 1200 OZ.
    TOTAL NOTICES SO FAR: 27 FOR 2700 OZ (.0839 TONNES)
    For silver:
    For silver: MAY
    757 NOTICES FILED TODAY FOR 3,785,000 OZ/
    Total number of notices filed so far this month: 2178 for 10,890,000 oz
    XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
    FEDERAL RESERVE EAR MARKED GOLD REPORT for April
    In Feb we had $7,841,000 worth of gold housed at the FRBNY valued at 42.21 dollars per oz
    Last month: we had the same; $7,841,000 of gold valued at 42.21
    thus 0 oz of gold moved out.

    This post was published at Harvey Organ Blog on May 1, 2017.


  • Are Oil Prices to Blame for the Venezuelan Crisis?

    Many analysts are venturing to link the crisis that plagues the Venezuelan economy with the fall in the price of crude oil. With oil being one of the most important commodities in Venezuelan production and the country’s main export product, it seems that the fall in the price would bring any country with an economic structure similar to Venezuela’s into a crisis. Similarly, many assume that the problems in Ecuador have the same root as those in Venezuela, although less pronounced.
    Certainly, one of the markets that has seen the most movement lately is oil. The price of an oil barrel today is 50% less than what it was in mid-2014. The price increased 47% in 2016.

    This post was published at Ludwig von Mises Institute on April 27, 2017.


  • Top 5 Risks To Oil Prices

    Global oil inventories have started to decline and the supply/demand balance will soon tip into a deficit, if it hasn’t already. That will accelerate the drawdowns in crude oil stocks, and bring the market back into ‘balance,’ providing a lift to oil prices.
    That, at least, is the working assumption. But there are a series of gigantic question marks out there – a handful of countries could upend the theory that the oil market is on a smooth trajectory towards balance.
    1. Venezuela. Venezuela’s economy has been in freefall since oil prices collapsed in 2014. The situation has deteriorated rapidly more recently, however, with hundreds of thousands of people taking to the streets. While things could certainly drag on, the situation in Caracas definitely has the feel of some sort of final stage for the Maduro government. Oil production already dropped by nearly 10 percent last year, and will continue to fall this year. Depressingly, total collapse of Venezuelan society is possible, threatening 2 mb/d of oil production. At a minimum, output will continue on its downward path. On the other hand, Bloomberg Gadfly points out that Venezuela’s demand would also plunge in this meltdown scenario, offsetting the supply loss but creating another, if different, risk to the oil market.

    This post was published at Zero Hedge on Apr 26, 2017.