Having observed the economic chaos to emerge as a result of India’s shocking Nov. 8 demonetization announcement, and perhaps confident it can do better, today president Nicolas Maduro of Venezuela, Latin America’s most distressed economy, mired in an economic crisis and facing hyperinflation, likewise shocked the nation when he announced on state TV that just like India, Venezuela would pull its highest denominated, 100-bolivar bill (which is worth about two U.S. cents on the black market), from circulation over the next 72 hours, ahead of the introduction of new, higher-value notes, as large as 20,000.
“I have decided to take out of circulation bills of 100 bolivars in the next 72 hours,” Maduro said. “We must keep beating the mafias.”
To this we would add “and cue economic chaos”, but since this is Venezuela, that’s a given. Continue reading »
“Funny how different sourced and principled media, post different stories about the same subject. Maduro is trying to steer a path somewhere between Chavez & the opposition, but the US banksters want TOTAL rights to all oil revenue. Another example of John Perkins’ “Economic Hitmen”. Any leader who wants the nation’s wealth to filter down to its population must be stopped at all costs by the U.S./U.K. banksers, see Ghaddafi, Saddam Hussein, Allende, Torrijos, Aguilera, ….the list is endless and the ‘coincidences’ dubious, dark and murky. They have so far failed in Iran & Syria, but it isn’t over….till the Rothschilds sing.”
Amid threats of violence, opponents of Venezuelan President Nicolas Maduro flooded the streets of Caracas today (2 million strong) in a major test of their strength and the government’s ability to tolerate growing dissent. However, for a nation that is forced to slaughter stallions for meat, line up for toilet paper, and dying from lack of simple medicines, Reuters reports that there is another destabilizing factor – ultra-violent street gangs are thriving…“It’s better to work together than be enemies. It’s better to make war with the police than with each other.”
Last week we reported that in addition to confiscating the guns of Venezuela’s famished population, president Maduro had a warning for would-be coup plotters (perhaps sensing that a coup is imminent): “Did you see what happened in Turkey?” said Maduro, in a televised public event on Thursday evening. “Erdogan will seem like a nursing baby compared to what the Bolivarian revolution will do if the right wing steps over the line with a coup.”
He didn’t stop here: as Bloomberg reported last week, in a replay of one of the ugliest chapters in the two-decade rule of the socialist party in Venezuela, a top government official said Thursday that a list of those who signed a petition seeking to recall President Nicolas Maduro will be handed over to government ministries and state-run companies. The tactic is clearly an attempt to intimidate government workers into staying away from the recall petition, and thus to keep Maduro in power. Continue reading »
The National Superintendency of Fair Prices has reportedly instituted a policy of fining bakeries that allow lines to stretch out their front doors, according to PanAmPost. The head of this particular bureaucracy, William Contreras, claims the lines aren’t a true indicator of a severe shortage of bread, but rather, a political “strategy of generating anxiety.”
Contreras claims there is no shortage of raw materials to make bread, but seems to not understand that bakeries just bake bread, they don’t process the different kinds of wheat used to make the flour that’s then used to make bread. Continue reading »
“Did you see what happened in Turkey?” said Maduro, in a televised public event on Thursday evening. “Erdogan will seem like a nursing baby compared to what the Bolivarian revolution will do if the right wing steps over the line with a coup.“
Yesterday we reported that Venezuela’s Interior Minister, Nestor Reverol, launched a campaign in Caracas to “disarm” citizens in an effort to curb rampant violence. Venezuela has the world’s second highest murder rate which Reverol attributes, at least in part, to heavily armed gangs roaming the streets with guns which are acquired from “corrupt” police officers. To address the violent crime issue, Venezueala has decided to chop up over 2,000 shotguns and pistols and laser tag ammunition as apparently the majority of ammunition used for violent crime in the country is manufactured by the state and “sold by corrupt police” as well.
To be sure, Venezuela does indeed have a high murder rate:
However, the real reason for the crackdown on guns was different: after last month’s failed Turkish coup, the socialist ruler is worried – with good reason – that he may be next. Continue reading »
When socialism fails, your citizens are starving and all hope is lost, you look for… Marxist Jesus? Nicolas Maduro has hired what he calls the “Jesus Christ of Economics” Alfredo Serrano, a 40-year old Marxist economist from Spain as his new main economic advisor.
The previous economic advisor, Miguel Pérez Abad, was fired last week after he endorsed the plan, which called for direct subsidies to the poorest families, the elimination of foreign-exchange controls and a reduction of price controls according to the WSJ. Continue reading »
Shops are being looted as Venezuela’s citizens, who live on top of the world’s largest oil reserves, are literally starving and dying for lack of food and medicine; all while the country’s gold reserves are being sold to finance its debt. With 1.8 million signatures on a petition for a referendum on Nicolas Maduro’s presidency, the country is threatening to become a failed state.
“You can hear the ice cracking. You know there’s a crisis coming… If you obstruct the democratic way, we do not know what could happen in this country. Venezuela is a bomb that could explode at any moment.”
According to Reuters, senior U.S. officials doubt that President Maduro will be able to complete his term, which ends after elections in late 2018. As the U.S. kicks around possible scenarios for how this will all end, from a referendum vote to military coup, one thing is becoming more and more certain: “You know there’s a crisis coming.”Continue reading »
The situation in hyperinflating socialist paradise Venezuela just moved one step closer to chaotic totalitarianism. With President Maduro clinging to power (thanks to his military ‘assistance’) amid growing social unrest (1.8 million signatures gathered seeking a referendum to remove him), FoxNews Latino reports German Mavare, leader of the opposition UNT party, died Friday after being shot in the head, asassinated in the western state of Lara, according to his organisation. Maduro has appeared on State TV tying Mavare to “armed groups” and suggested that more right-wing politicians are potential targets.
In less than a week, more than 1.8 million people in Venezuela signed petitions seeking a referendum to remove President Nicolas Maduro from office. That’s nine times the required 200,000 signatures.Continue reading »
Overnight things went from comical to farcical overnight when the Venezuela gift kept on giving, and the nation expanded the three-day weekend to five days, declaring a two-day work week for government workers, adding it was seeking international help to save its power grid amid a drought that threatens the capital’s main source of electricity. The two-day work week, after the government added Wednesdays and Thursdays as non-working days to save more power.
“Now things are worse than ever,” says Yuli Sánchez. “They kill people and no one is punished while families have to keep their pain to themselves.“… “This is now wilder than the wild west.“… “Venezuela is pure chaos now. It seems to me there is no way back,” the former policeman says.
Two weeks ago, shortly before noting that Venezuela’s CDS is now at the same level where Greece was 3 months before its default, we wrote that as a result of a recently implemented gold swap with Deutsche Bank, Venezuela was preparing to liquidate its remaining gold holdings (ostensibly temporarily, if only on paper) in order to pay down its upcoming debt maturities.
As it turns out Venezuela has already started moving much of its gold reserve to Europe where it will be located closer to swap-provider and ultimate custodian, and liquidator, Deutsche Bank, by way of Switzerland. According to BullionStar, Switzerland has imported a net of 35.8 tonnes of gold from Venezuela in January 2016.
And so, the gold which deceased Venezuela leade Hugo Chavez so painstakingly tried to collect from Europe, is just a few short years later, about to make its way back to where it came from. Continue reading »
Venezuela’s socialist government decreed an “economic emergency” on Friday that will expand its powers and published the first data in a year that shows the depth of a recession fueled by low oil prices and a sputtering state-led model.
The central bank, which has been lambasted by critics of President Nicolas Maduro’s government for hiding statistics since the end of 2014, said the South American OPEC nation’s economy shrank 4.5 percent in the first nine months last year.
Inflation soared in that period to an annual rate of 141.5 percent, the world’s worst.
Venezuela’s annual inflation rate is near 100 percent and the economy will likely contract around 4 percent this year, said President Nicolas Maduro, in a rare mention of data detailing the OPEC nation’s economic woes.
The central bank has not published inflation or GDP figures for this year, as the state-led economy unravels.
Many economists believe consumer prices are rising much faster than 100 percent, and the International Monetary Fund recently estimated that the economy will contract 10 percent this year. Continue reading »
Just under a year ago in the aftermath of the “OPEC Thanksgiving Massacre” of 2014 which sent oil crashing when Saudi Arabia effectively ended the oil cartel, we predicted that Venezuela (with its CDS trading at 2300 bps back then) would become the first casualty of the “crude carnage.” Since then not only has Venezuela, which relies on crude oil for 95% of its export revenue, suffered a dramatic episode of hyperinflation (which is only accelerating) coupled with total economic collapse, but its CDS has, as expected, blown out to reflect a default of probability at 96% over the next five years as shown below.
Yet while everyone promptly jumped on the “Venezuela will default bandwagon” it has so far avoided bankruptcy.
How can this country with a massive debt load and a paralyzed economy have avoided default so far?Continue reading »
If anarcho-capitalists should move to Somalia, then socialists – especially, “social democrats” — should move to Venezuela. The country is a complete disaster. But don’t take my word for it, read what a Caracas homemaker said after she tried to buy three cans of sardines and was ordered to put one back due to food rationing: “This is a disaster.”
Food shortages, rising prices, inflation, corrupted incentives, and rampant crime are all symptoms of a primordial problem: socialism. Just because the Socialist Party was democratically elected does not mean that the economic calculation problem has been solved. It’s as if the gods needed one more example to shove down the throats of Western leftists. Economic chaos, food rationing and a complete break down of the social order aren’t lessons of a misguided dictatorship of the proletariat, but a fundamental reality of socialism, whether democratic or not.Continue reading »
Over the years, we have repeatedly poked fun at the transformation of Venezuela into a “socialist utopia” – an economy in a state of terminal collapse, where the destruction of the currency (one black market Bolivar is now worth 107 times less than the official currency’s exchange rate) and the resulting hyperinflation is only matched be barren wasteland that local stores have transformed into now that conventional supply chains are irreparably broken.
Just this past Wednesday we showed a clip of what is currently taking place inside Venezuela supermarkets, noting that “the hyperinflationary collapse in Venezuela is reaching its terminal phase. With inflation soaring at least 65%, murder rates the 2nd highest in the world, and chronic food (and toilet paper shortages), the following disturbing clip shows what is rapidly becoming major social unrest in the Maduro’s socialist paradise… and perhaps more importantly, Venezuela shows us what the end game for every fiat money system looks like (and perhaps Janet and her colleagues should remember that).”
When you’re running an epic socialist experiment while simultaneously attempting to preserve the legacy of a now-deceased “anti-imperialist” geopolitcal legend and your country’s most valuable asset has unexpectedly become a liability, it’s sometimes necessary for the common man (and woman) to make sacrifices, which is why it makes sense that at one point this year, 36 condoms cost nearly $800 in Venezuela. Fortunately for the safety of US citizens, The White House has officially recognized the country as a threat to US national security, which means no shady Venezuelans will be able to use the US financial system to procure condoms or bread on this administration’s watch. Rounding out the absurdities, Venezuelan President Nicolas Maduro predictably decided to use Washington’s charade to his advantage by citing Obama’s “imperialist” ambitions as an excuse to grant himself “special powers” which should help him “preserve the peace and integrity” of the country.
While it’s not entirely clear whether this falls under the purview of “preserving peace and integrity,” we imagine it would be a reputational advantage for the nation’s hotels to be able to provide guests with toilet paper, but as Fusion reports, Maduro’s socialist paradise has left some businesses up the proverbial creek:
Venezuela’s product shortages have become so severe that some hotels in that country are asking guests to bring their own toilet paper and soap, a local tourism industry spokesman said on Wednesday.Continue reading »
The people of Venezuela can rejoice… not so fast. Amid paranoid-sounding (though not unlikely) rantings about US-created coups (and blaming ‘economic’ war for his nation’s Socialist utopia hyperinflation), it appears President Maduro just got another life-line (or more rope to hang himself). After begging China’s leader Xi early in January for moar money (and getting it), China – which is already Venezuela’s biggest creditor with over $50 billion loaned since 2007 – as Reuters reports, is said to plan on signing another $5bn loan to Venezuela for “wide-ranging” projects like “mature oil fields.” So, it appears China is enabling Maduro to hollow out his economy even more.
China is poised to lend Venezuela around $10 billion in coming months, half as part of a bilateral financing deal and the other half for development of oil fields, a senior official at state oil company PDVSAsaid on Thursday. Continue reading »
Venezuelan President Nicolas Maduro expressed confidence that Caracas and Moscow can achieve more than they have over the past 61 years of diplomatic relations.
MOSCOW (Sputnik) — Caracas is ready to cooperate closely with Moscow within the framework of the UN Security Council, and hopes that the Russian head of state will pay Venezuela a visit, the country’s President Nicolas Maduro said in a letter to his Russian counterpart Vladimir Putin.Venezuela became a new non-permanent member of the UN Security Council in October 2014 and will serve to the end of 2016. Continue reading »
“Reuters reported that Venezuela’s central bank is in talks with Wall Street banks to create a gold swap that would allow it to monetize some $1.5 billion of the metal held as international reserves, according to government sources familiar with the operation.”
If true, then you know now who really is in control in Venezuela.
Yesterday we reported that in retaliation to the latest Obama executive order which declared Venezuela a national security threat and ordered sanctions against seven officials, Maduro promptly took advantage of this “outside threat” to rally his toilet paper-starved population “around the flag”, and while pointing at the “evil imperialist” Obama, granted himself even greater authoritarian powers: “I have put together a special law that gives me special powers to preserve the peace, the integrity and the sovereignty of the country before any situation that presents itself due to this imperialist aggression.” Continue reading »