Today is the day financial markets have been expecting/fearing forever and a day. Just after 6 p.m., Nicolás Maduro got up in front of the cameras and announced Venezuela couldn’t keep paying its debts, and needed to restructure.

The timing for the announcement is enormously weird.  PDVSA just paid, with difficulties, the amortization on its 2020 bond due last week. Why would they kiss $800 million goodbye just a week ago if they knew default couldn’t be helped from next week?

Even more bizarrely, Maduro announced the government will still fully pay the $1.2 billion PDVSA 2017N principal payment due today.

On its face, this makes no sense.

There is zero upside to paying last week if you’re just going to default anyway next week. And there’s even less sense in announcing you’re going to make just one more payment tomorrow if you face default directly afterwards. Why not just steal the $1.2 billion? 

Maduro couched his statement as a call to restructure Venezuela’s debt. But nobody’s fooled. Restructuring means default, because “restructuring” — a negotiated outcome agreed with bond holders — is totally impossible in current circumstances. It cannot happen, for many many reasons.

To begin with, Maduro tasked vice-president Tareck El Aissami, a designated Drug Kingpin on an OFAC sanctions list to lead the restructuring. It’s not even legal for bondholders to meet that guy, much less negotiate with him…nor is it legal for them to restructure in the first place, since there are sanctions in place against that.

But even if Tareck wasn’t radioactive and sanctions didn’t rule restructuring out, it’d still be unrealistic without major, sweeping policy reforms, which Maduro certainly isn’t promising. Without them, you’d end up having to offer 30% yields or some similarly crazy high number. This just isn’t the way international finance works

And even if Maduro did promise sweeping neoliberal policy reforms, restructuring would still not be feasible, because PDVSA bonds have no collective action clauses, so it’s practically impossible for the government to deal with holdout bondholders. Remember what happened to Argentina’s debt? Well, multiply that by three.

Long story short, this talk of “restructuring” is just noise. They can’t restructure. They’re just defaulting.

Why would they announce they’ll stop paying after they make just this one last payment, on the PDVSA2017Ns?

One way to see it is that this is about the political marketing of an already expected default: an attempt to soften public opinion ahead of the inevitable. But if so, why would you exempt the 2017N maturity due today? Why would you pay that bond even after you’ve announced default? It’s an  especially hard decision to square with rationality as the rest of the world understand it.

And so we’re back to the opening puzzle. Why would they announce they’ll stop paying after they make just this one last payment, on the PDVSA2017Ns?

One possibility is that this is all an elaborate bluff. A bit of high-stakes market manipulation designed to send the price of all all Venny bonds plummeting. I know that sounds out there, but there’s some precedent: Ecuador very publicly did something similar back in 2009, with considerable success.

There’s an argument to be made that Ecuador is not a suitable comparison because of the extremely different magnitudes we’re talking about (A single, USD 3.2Bn issue versus $60+ Bn worth of financial debt and god knows how many skeletons in the closet). If it’s a bluff, it’s an enormously high-stakes bluff. However, the Citgo-backed PDVSA 2020s could be a buyback target in such a scenario.

Along the same lines, perhaps the plan is for China and/or Russia to buy up some bonds tomorrow at bargain basement prices: a sweetener they agreed to in return for more Oil Joint Ventures, refineries, guisos and Delta Amacuro state. Why not?

Piensa mal y acertarás, my grandma used to say.

My best guess is that, hey, this is Venezuela…a place where it pays to be in the know. And people who are “in the know” often happen to be in need of some rather high dollar-figure money laundering solutions.

Piensa mal y acertarás, my grandma used to say.

Last week, trading in 2017Ns saw unprecedented volume. The kind of volume you’d expect if a few very rich, very well-connected people had reliable information that the 2017Ns were the last bond Maduro was planning to pay.

That’s the kind of volume that could be interpreted as a massive money laundering operation, with tons of enchufado dirty money rushing in to buy-up a sure-thing bond. The last of the sure-thing bonds. Because the proceeds of a bond-payment are seen as squeaky clean. Why steal $1.2 billion and leave them stranded in dirty-moneyville when you can just as easily launder them?

The only thing we can be sure of is that the longest, baddest legal battle in Venezuela’s history is just around the corner here.

66 COMMENTS

  1. My God–I thought I was the only one for not understanding the payment, even BEFORE today’s “announcements” were made.

    But fantastic analysis here for opening up the window(s) of reasons they’re doing what they’re doing.

  2. “Last week, trading in 2017Ns saw unprecedented volume. The kind of volume you’d expect if a few very rich, very well-connected people had reliable information that the 2017Ns were the last bond Maduro was planning to pay.The kind of volume that you could be the opening move in a massive money laundering operation, with masses of dirty money rushing in to a sure-thing bond that would get paid for sure, with the added bonus of making buyers’ dirty money squeaky clean on the other end. ”

    You can be sure someone was frontrunning the news.

    The bottom line is as you say, restructuring=default.

    Now for the real soap opera.

  3. I’m confused. Either they made the payments or they didn’t.

    Some bills came due early last month, and apparently those haven’t been paid yet, but are still within the 30 day grace period? Or were they paid? I understand that CITGO wasn’t leveraged on those specific bonds, but either they paid… or they defaulted. I also understand that SOME bondholders haven’t been paid for last Fridays payout… the equivalent of “the checks in the mail”. Does this qualify as a default?

    Trump hasn’t made it impossible for PdVSA to do business, just more costly. But in the end, the bondholders need to get paid in actual denominations that are meaningful, and they need to get paid ON TIME. And unless a miracle has occurred, the Venny bonds are not subject to this negotiation with the Russians. (whose debt came due in June or July and wasn’t paid?)

    • So, after re-reading and reading elsewhere, Maduro’s plan is to pay the two big CITGO secured bills (the most recent due yesterday, but unpaid), but letting the rest slide… blaming the debt holders (and Trump) for not being able to make payments?

      Indeed. This is a default. A restructuring would require two parties sitting down and coming to an agreement, and most financial institutions care more about Wall Street than Maduro and his grand economic plans.

      I’m surprised that the wheels haven’t come off the Bolivarian wagon as of today. To heck with waiting for Monday!

  4. Javier, thanks for that neat explanation of this very weird state of affairs.
    On Russian media I recently read an analyst saying Russia knows Venezuela won’t be able to pay the wheat but it delivers it anyway to support Maduro…that was in a long article on Russian interests in L. America. But I wonder what they will do with the billions owned to them.

  5. The reasoning is likely whom the bill today was to negotiate with. That is not completely clear.

    The oil assets are already tied up or have fallen so far below market value, as muddy oil is near worthless, that little is to be bargained with.

    And if the AN ever gets it’s act in order, those left holding restricted bonds are going to find it less helpful than a roll of sandpaper in the banyo. Under international law, countries are not beholden to illegal transactions or debt at the hands of a dictator. The IMF and the World bank have already filed on that one.

    But watch where Maduro lands after this is over.

  6. Restructuring ‘sounds’ rational but if you cant really restructure because you havent got the will to do the things such restructuring requires and or the means to do it then you are just announcing a default but dont want to call it that , still you want to blame someone for the failed restructuring and for that you name as leader of the fake restructuing effort someone whom the sanctions dont allow to act in that capacity (a drug pin lord) to ensure that when the restructuring fails the blame is put on the sanctions and you can play the victim of outside enemies of the revolution so people wont hopefully blame the regime for the resulting worsening of their already critical life conditions….

  7. Luis Herrera said his famous line “i receive a mortgaged country” in 1979, paradoxically after years of oil boom whith rising prices thanks to the inestability on the middle east Venezuela was already in huge debt and economic deficit.

    So the writing has been on the wall for decades, and instead of steering the wheel chavismo repeated the situation but on steroids leaving a country in shambles , in massive debt and after oil prices of 100$ per barrel.

    I don`t know what a next president would say in his/her inauguration speech but something on the lines of “i receive a pile of bullshit” would be more accurate

  8. Will a bond default save a nation when elections, political protest, food deprivation and spiraling inflation failed to unseat the PSUV. What country will now fund Venezuela and what can it get in return? Logic says and many here have predicted that a default would break the PSUV but I wonder whether international mediators will save them Heck in Columbia FARC has largely been immunized criminally and now has a candidate for the presidency. There are no real penalties when lefties despoil a nation. My inclination is that there will be a grand bargain immunizing the PSUV and that it will end up ruling Venezuela in a power sharing agreement all gained by worthless promises to rule democratically in the future. Ugh, what a miserable outcome. Resist that outcome because if you don’t your grandchildren will live in poverty and tyranny.

    • I get your point, but we’re way past that now:

      They can steal elections for next to nothing these days. It doesn’t require much dinero at all, unless you’re talking about CLAP bags.

  9. re: “What country…?” Ans.: China and Russia What we won’t know is what China and Russia are promised in return. Don’t forget all those Chinese-made cars outside the Defense Ministry: China wants ALL of Venezuela’s consumer market

    • Ït doesn`t matter if its the spaniards, the United States, Cuba, China or Russia.

      We keep exchanging our gold for trinkets. They take our riches, they bring us their plastic bullshit.

  10. Venezuela has many resources in its sub soil besides just oil.

    Think Coltan, plutonium for example. So oils may been exhausted but they simply move the plundering elsewhere, like what`s going on in arco minero.

    There is no full disclosure of what they are pulling out the ground and what deals they are making with it. But the nation keeps getting wrecked both economically and ecologically while backroom deals are happening at its expense.

    Venezuela`s curse is its wealth, geographically this has to be one of the most blessed territories on earth. Sadly not culturally or politically. Human affairs don`t do this earth justice

    • Gotta disagree.

      Your plan is to just dig more holes–so instead of oil, it’s minerals.

      VZ is wealthy only its prospective farmland, maybe fisheries too, but that actually requires work and free market capitalism.

  11. “Venezuela`s curse is its wealth, geographically this has to be one of the most blessed territories on earth. Sadly not culturally or politically. Human affairs don`t do this earth justice”
    Love that comment succinctly put.
    “We ought to blame the culture, not the soil” Alexander Pope
    Its really sad to know that some Venezuelan people are some of the worst on the planet!

    • Venezuelans are no worse than anyone else. Sure, there are some cultural aspects that remain suspect, but none of that has to do with living in Venezuela.

      Look at the urban “gansta” culture that infects the United States. An uninformed observer would think that the United States is full of illiterate, violent, gun-toting, drug addled gang-bangers, when in reality these thugs only represent a very very small fraction of that population.

      The problem is, Venezuela has an entire generation (possibly two) who have been led to believe that the reason they have so little is because what was theirs has been stolen from them. (Thank you, Karl Marx!) And the only way these people are going to “get back” what was theirs is by the heavy hand of an omnipotent and all powerful Government who promises them pork shoulders and beer money.

      If the PSUV is good at anything, it does a good job at marketing bullshit to the easily led. Again, it isn’t just Venezuelans. The USA if full of the willfully ignorant too.

      • “Venezuelans are no worse than anyone else.” El Guapo
        Being a well travelled person and knowing the statistics, i am afraid that they are.

      • “Look at the urban “gansta” culture that infects the United States.”

        I, for one, readily admit that entering a Quaker neighborhood scares the living shit out of me.

        • Obviously neither of you guys have ever had to deal with the Minnonites. Or, for that matter, the Mormons. Don’t go to Salt Lake City unless you’re packin’!

          • I’ve been to Lancaster, Pennsylvania a few times, and bought Shoefly Pie from them. My wife spent a fortune on a quilt, and I wanted to kill her.

            Fascinating culture, but like any strictly controlled/monitored faith, there are real dark sides to it.

          • Isn’t it strange how all these American subcultures managed to grow and prosper here for over 100 years before the libtards found it necessary to lecture us on diversity and multiculturalism?

            But then, they believe in personal responsibility and self-sufficiency. And they tend to be politically conservative. So I guess that gives them an unfair advantage.

          • Regarding Salt Lake: some of the nicest people ever. And they have more guns than most militaries in that desert.

      • I never implied that we were an exception as a people, as i really believe all human beings to be the in essence the same, just not on the same context, and that context is what i am refering to. The human affairs of politics, economics and all instances of leadership this nation has had has been more than unfortunate and have created this unfortunate context, even what that wasn´t the majority of the nation or that it doesn´t represent the good in us, doesn´t matter, the consequences are there for everyone.

        From the opporunities the last century gave us we could have been an autonomous nation with one of the most comfortable living standards on the planet and with a population with economic independence but instead we got a wellfare state run by cronies and an extremely dependant fragile people living in sub standards conditions.

        We are not even a big nation, we have a relatively small population, we are probably the place on earth with more weatlh per capita and it all justs fades in the real of “could have been” . and also into account not only sub soil but tourism, agriculture, meat production, manufacturing possibilities, etc.

        The fault in that we are how we are lies on human explanations , not on the geography or the potential of the land itself-

        P.D: I very much dislike a lot of aspects of american (usa) culture, i think a lot of their media is toxic and a lot of their values backwards in a way that is incredibly similar to that of Latam countries, and they already were taking the blunt of it all in the Dustbowl/Great depression era, is not like humans mess things up just on Venezuela, but then again, is in humans that lie the possibility to correct it and steer the situation into a better future. Think also about the Japanese and Germans who really put the cake in the 40s only to bounce back as democratic and economic miracles in the decades following the devastation that the war left.

        • “From the opporunities the last century gave us we could have been an autonomous nation with one of the most comfortable living standards on the planet and with a population with economic independence but instead we got a wellfare state run by cronies and an extremely dependant fragile people living in sub standards conditions.”

          Look at the standard of living enjoyed by many oil-rich arab countries. I don’t agree with their religious government model, but their citizens live very well indeed. And beyond oil, they don’t have much else, unlike Venezuela.

          “Think also about the Japanese and Germans who really put the cake in the 40s only to bounce back as democratic and economic miracles in the decades following the devastation that the war left.”

          Yeah, and the Germans and Japanese did that with the help of a lot of American dollars.

          I think most of America’s decline today can be traced to over-reaching socialism.

          From the Rio Grande River to Tierra del Fuego, what’s the common denominator?

          • I don’t really understand the faiths. Just going by what I see on TV and my few visits to Lancaster.

            But my example above? It’s a real one:

            There was a Mennonite girl taking out from Pizza Hut, wearing that old-fashioned dress and bonnet (but colorful, not black), and Nikes, getting into a gorgeous powder blue Camaro!

    • Reminds me of the joke my Venezuelan attorney told me years ago.

      As the earth was formed God sent his angels out across the globe to distribute gold, silver, fresh water, arable land, oil, diamonds, etc. The angels followed orders but each returned with something left over, To each God said, “put the extra in Venezuela”.

      Eventually, one of the angels sheepishly approached God, acknowledged that God was all-powerful and all-knowing, but then asked, “is it not unfair to give one country, Venezuela, so much more than all the others?”.

      God replied, “relax, you haven’t yet seen the people I’m going to put there”.

    • This is nothing new to the Venezuelan culture. When I lived in Venezuela (long before the Chavistas were in power) there was a joke going around about why Venezuelans could never make a living as a restaurant owner.

      Family, Friends, and neighbors would often eat a fine meal at the restaurant and when it came time to pay the bill they would say. “No tenamos plata, le pagaremos la proxima quincena” the Venezuelan owner would reply “No ay problema, pagarme despues” of course the 15th never came and the bills were never paid. The restaurant went broke and closed down.

      Obviously there have been many successful restaurants in Venezuela but they were usually run by 1st or 2nd generation immigrants from countries such as Spain, Portugal, China, and Italy.

      This is just the same cultural phenomena just on a massively large scale

      • “Obviously there have been many successful restaurants in Venezuela but they were usually run by 1st or 2nd generation immigrants from countries such as Spain, Portugal, China, and Italy.”

        That holds true for most successful businesses of which I’m acquainted today in Venzuela though I’d add christian arabs to the list.

        • Been saying this for years. It’s very similar in the states, as a GENERAL rule:

          Native-born…the second generation of immigrants who opened restaurants…don’t want to work the 7 days a week, at least 12 hours a day, required to maintain a great operation. They just don’t care, and seek out easier lives.

          So we’re losing all of the great family-run restaurants, being replaced by the franchise shit like Papa John’s and others.

          The first generation immigrants are the ones with outstanding food fare.

  12. Where’s Venny Trader today? No comments? I assume he and his Bolichico/Narco friends are checking their accounts to see if he actually gets the last payment Masburro promised.

      • I am here folks! I won’t sell and I am happy to renegotiate as long as it is friendly (bondholders have gotten paid generously for 10 years+). See, I have exposure to real risk and also have skin in the game (unlike Francisco who just rights and rights and never gets to pay for his errors in any shape or form). If I can’t make 150% profit but I can walk away with say 50-70% profit, that is still very good!

        You guys should be happy! Isn’t this what you have been asking for? Who understands you!

          • 13 November meeting. I am not a US citizen so I have less to worry about. But US citizens should definitely be concerned. They will probably dump their debt at fire sale prices if they can’t cut a deal and it will probably be bought pack by pennies on the dollars by govt, China, Russia, etc.

          • So it is a scam to pass along Venezuelan assets to the Russians and Chinese at pennies on the dollar.

            Thank God those American imperialists won’t fleece the country again.

  13. Couple thoughts.

    First, given the dwindling reserves and reduced petro output – at least some of which is full of mud and seawater and not up to industry standards – coupled with the crushing amount of monies coming due on bonds, it’s been a foregone conclusion that at some point Maduro wouldn’t be able to continuing servicing his debt. Yesterday night he seemed to finally come clean in that regard. I suspect this means going froward, Venezuela’s debt will go unpaid. With billions coming due in no time, default seems the only option.

    Second, the idea that Wall Street is going to be outsmarted by Maduro and his Cuban advisors seems absurd. In the world of money, Maduro and Cuba are hackers. They might game the system for personal gain, but as the bonds come due and payment is not made, Maduro is dreaming if he thinks he can deal with this on his own terms. And yet when has any arm of Chavismo, at any time, at any place whatsoever, been willing or able to accept terms from anyone but themselves. Default means that certain terms will be imposed on Maduro, for which he has no choice but to comply. But since we know he cannot, what happens when the financial world says you have to do this and that, and Maduro says, no I don’t. I am going to do THIS, and you will like it. What are the actual forces that can be brought to bear on Maduro when he can’t make bond payments and won’t address the issue according to the rules?

    If Maduro finds himself with no liquid assets to operate with, what possible scenario would allow him to and the Chavistas to remain in power? What will default actually mean to Chavismo’s political future, and why.

  14. “what happens when the financial world says you have to do this and that, and Maduro says, no I don’t. I am going to do THIS, and you will like it. What are the actual forces that can be brought to bear on Maduro when he can’t make bond payments and won’t address the issue according to the rules?”

    I suspect the forces that can be brought to bear is the seizure and forced liquidation of Venezuelan assets outside the country not under Maduro’s direct control. One wonders if such actions wouldn’t ultimately result in a self-embargo of oil shipments since every tanker leaving the country would be a target of those seeking payment.

  15. MRubio. Was wondering the same. I mean, this cockroach seems to be able to survive anything, but can the Chavista’s survive with no funds? And to what extent, really, is it all coming to that? Is Russia or China or anyone going to keep throwing money at the guy? If not, by what actual means might he survive?

    • I keep hearing that this is the end game. Only problem with that is that I’ve heard it so many times before and it’s never the end game. I’ve given up trying to predict the end.

      From what I’ve seen, I’d say Maduro is in really deep shit when the money he uses to buy the loyalty of the armed forces dries up. I guess it was his Cuban masters who engineered the plan of bringing the military into the government, civico-militar, so that they could get their shares of the spoils. It was brilliant actually.

      Whereas before the military was involved in drug dealing, having them handle the food supply (skimming their percentage at each step of the way) keeps them fed and happy, and doesn’t subject many of them to the risk of eventual DEA capture for handling, transporting, selling of drugs.

      For instance, I’ve got a very reliable contact in Maturin who tells me that not a sack of government-funded flour gets delivered in Monagas without first the signature of a particular general…..and he’s not talking about signing a transport voucher, he’s talking about who gets X number of sacks, and at what price. And while there’s plenty of foodstuffs entering from Brazil, all of those shipments must first get military “blessing”, if you know what I mean.

      This thing can stay afloat for a good while I suspect but eventually it’s going to get really tough, especially if income-producing assets outside the country are being siezed to pay debts.

  16. Adding to that, the bond debt hoovers somewhere around 120 billion, probably not counting all the monies owed for services rendered but never paid, appropriations, monies marooned in the country that Muduro will not let out, etc. And now a sanctioned drug king pin is trying to head up a restructuring deal. As someone pointed out on another thread, why would anyone contemplate re-negotiating debt with the very people solely responsible for the default in the first place?

    • Maduro is following the Cuban model. Borrow, don’t repay, ask debt forgiveness, put money in pocket, repeat. It has worked for the Castros for decades.

      • Different types of debt for VZ, and a lot more than Cuba’s.

        VZ’s debts encompass every conceivable kind, including private debt.

        They owe money to EVERYONE!!!

  17. like Rubio, I’m sick of hearing myself talk about an end game. It fascinating, in a perverted kind of way (meaning as people, including family members, suffer and run scared in Caracas), to watch how Maduro can weasel out of an endless succession of corners. Even now he dares to “decree” that his debt will be restructured, this without asking if those holding his notes agree to same, which they must. My guess is that if bond holders don’t agree to his terms – the only one’s Chavista’s ever acknowledge – they will simply will not get paid. Cuba might have gotten away with this, but to a country dependent on oil exports for their very survival, Maduro cannot decree the terms a titanic debtor will engage the free market. But he’s a master of chaos so it might buy him some time. But as mentioned, once the cash stops flowing to the military, their loyalty could dry up in no time. Perhaps that time is drawing near. Perhaps not.

    • I mostly agree, except there’s always going to be enough for the military to steal…oil money, drug money, barrio extortion, import/export, food distribution, terrorism money, etc. …that this idea of the Dollars drying for up them is kind of a fantasy:

      They’re the LAST ones who have to worry about getting a huge piece of both the shrinking “legitimate/legal” pie, and even bigger pieces from the increasing criminality.

      The military ain’t going anywhere without outside military intervention. Except CC opposes that.

      Sigh. Scratch head. Shake head in disbelief.

      I would love to have a time machine to read CC 10 years from now, even though they’re going to be the exact same articles and the same editorial line.

  18. Most of this debt is usurious and illegitimate. Maduro is trying to represent the people of Venezuela against Wall Street and capitalists. I wish we had leadership like this in the USA!

    • I gotta agree with Judi Lynn. 500% inflation, food shortages, riots, lack of healthcare, crumbling infrastructure, the highest murder per capita in the world, pollution, destruction of the land, a collapse of farming and most private industry, and corruption at every level of society would be so cool.

  19. Problem with a troll like Judi Lynn is that not only is her logic gone missing and her take on Venny bonds false, but her English and terminology is wonky. “Usurious” in it’s common usage refers to the interest accrued on loans. In the real world, that’s how it works. Expecting something for nothing is a dishonest approach because the real world doesn’t function like that. But it DOES function. You borrow money – you pay the nut or the viggorish (interest). Or you don’t get the loan.

    That much said, another definition of “usurious” is: Adj. 1. usurious – greatly exceeding bounds of reason or moderation; “exorbitant rent”; “extortionate prices”; “spends an outrageous amount on entertainment”; “usurious interest rate”; “unconscionable spending”

    Per the “unconscionable spending,” Chavistas fit that bill, so yeah, Judi, they are guilty of same.

    “Illegal?” How so. It wasn’t Wall Street’s idea to offer bonds. That is all on the Chavistas. The idea that you can do so, then later balk at the terms you agreed upon is not something that would ever fly in the real world, say, if you borrowed money from a cousin or a neighbor. You don’t go back and start “decreeing” how you will pay them back.

    Chavistas got themselves into this corner from profligate spending and pillaging. Not the notes are coming due. Blaming others for the dire situation is part of the “alcoholic model” Chavistas have always used: The problem is caused by the greed and evilness of others. It is NEVER the Chvistas fault. That’s how a drunk thinks. We all know that. that’s called “welching” on a promise, and for that you pay up the ass.

    The curious thing is, given what Rubio just listed – 500% inflation, food shortages, riots, lack of healthcare, crumbling infrastructure, the highest murder per capita in the world, pollution, destruction of the land, a collapse of farming and most private industry, and corruption at every level of society – what part of this is Judi rooting for? Chavistas have had basically absolute power over their internal affairs for many years, so the current situation belongs to them. Is Judi suggesting we ride the Chavista wagon even further into the toilet? And if she writes the whole thing off to an economic war, well, they’ve had 18 years to win it and they haven’t. Time to let others have a shot.

    Fact is, evidenced by this and other posts like Judi’s, the Chavistas are spectacularly overmatched by the reality of running a country and a functional economy – and making any kind of sense in acknowledging and taking responsibility for their actions and the consequences thereof. The most conspicuous evidence of this is the total lack of any comprehensible plan to address the situation. Or ANY plan.

    The simple question: What are you gonna do about this in terms of policy changes – that get answered with: More of the same. Or with, “We’re not paying back the loans.” That’s not a plan, but proof of the lack of one from the very beginning.

  20. “given what Rubio just listed – 500% inflation”

    I was actually hedging, the rate’s much higher. Right now I’m seeing prices double almost monthly.

  21. the problem is pretty basic: The Chavista’s won’t accept reality for what it is, they can’t change and they won’t leave. They may be forced out by economic issues – hard to imagine otherwise – but they won’t go quietly. the worst case scenario is for any new administration to agree to a coalition with the Chavistas in ANY way shape or form. New governments have to only take the helm if it is theirs and theirs alone. Saddled with the Chavistas, no progress is possible. The Chavistas cannot be allowed to hand over power on their own terms.

    • O no my friend, that is far from the worst case scenario, the worst case scenario is a societal collapse like Somalia (or Civil war possbly). Venezuelans will be subjects/serfs to the local criminal warlord and here in Colombia we might have to close the border permanently as we will have no way of knowing what kind of people are trying to cross the border. Ironically that might actualy reactivate comerce and if the central bank collapses people might be able to use pesos or dollars for transactions.

      Greetings to all the ppl at CC by the way.

  22. Judi Lynn by reading your comments about Maduro and Venezuela it is more than obvious that you have never visited the utopia you call Venezuela. Your statement “the authors here realize that all that has been accomplished in Venezuela would be lost with outside military intervention.” is pure bullshit as there has been absolutely nothing positive come out other rein of terror and drug trafficking along with massive theft that been seen in the world before.

  23. imo this is a well planned strategy. These narcos never leave anything to luck. First event to occur is this chicken game of creditors not sitting at the same table with OFAC listed thugs. Many in wall street will press for sanctions relief in order to cash any money avalilable, then the whole thing derives into a political circus, putting America against the wall, while china and russia buy cheap debt and other assets in venezuela. Then venezuela becomes the next cuba, properly sustained by resource sucking china and rusia. this IS endgame

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