Venezuela's Maduro regime defaults on debt plunging deeper into crisis

[but] experts say the socialist Venezuelan regime that has been in power since 1999 bears the brunt of the blame. It fixed -- or froze -- prices on everything from a cup of coffee to a tank of gas in an effort to make goods more affordable for the masses. For years, Venezuelan leaders also fixed the exchange rate for their currency, the bolivar.

Those moves were among the driving forces behind the food shortages. Farmers couldn't sell at low prices without going out of business because their cost of production was much higher. Importers also couldn't afford to ship in food, knowing they would have to sell at much lower prices than what they paid for at the port.

When food shortages grew worse, an illegal black market emerged where venders sold basic foods at vastly higher prices than the government's artificially low prices. Inflation soared, making the bolivar almost worthless.

One U.S. dollar currently buys more than 55,200 bolivars. At the beginning of the year, a dollar was worth about 3,200 bolivars, according to dolartoday.com, a website that tracks the unofficial rate that millions in Venezuela use to determine payments.

source: CNN Money (money.cnn.com...)

According to the link, "The International Monetary Fund predicts that inflation in Venezuela will hit 650% this year and 2,300% in 2018."

If enough holders of a particular bond demand full and immediate repayment, it can prompt investors across all Venezuelan bonds to demand the same thing. Since Venezuela doesn't have the money to pay all its bondholders right now, investors would then be entitled to seize the country's assets -- primarily barrels of oil -- outside its borders.

Venezuela has no other meaningful income other than the oil it sells abroad. The government, meanwhile, has failed for years to ship in enough food and medicine for its citizens. As a result, Venezuelans are waiting hours in line to buy food and dying in hospitals that lack basic resources.
If investors seize the country's oil shipments, the food and medical shortages would worsen quickly.

"Then it's pandemonium," says Fernando Freijedo, an analyst at the Economist Intelligence Unit, a research firm. "The humanitarian crisis is already pretty dire ... it boggles the mind what could happen next."

It appears the socialist dictatorship in Venezuela may be close to collapsing, leaving another failed state in its wake. The humanitarian crisis is expected to turn a page beyond its current description of "dire."

Given the fact that bond holders aren't interested in losing their investments, I expect Venezuela's international assets to be seized by investors. This single event could be the catalyst for total economic collapse in the South American country.

Another win for socialism in South America.

Guess they finally ran out of other people's money.

I EXPECT that Venezuela will now begin engaging in border skirmishes with its neighbors.

a reply to: JBurns

I really don't want to get into this - I am sorry to hear this but it is not surprising - think Puerto Rico - think regime change - think US interference in another nations politics and elections.... yadda, yadda.

In the OPs first quote from CNN it says:

[but] experts say the socialist Venezuelan regime that has been in power since 1999 bears the brunt of the blame. It fixed -- or froze -- prices on everything from a cup of coffee to a tank of gas in an effort to make goods more affordable for the masses. For years, Venezuelan leaders also fixed the exchange rate for their currency, the bolivar.

This is not news but opinion. News only tells us facts. What happened, where it happened, who was involved. News doesn't not assign blame or make any other analysis - that is the job of the opinion page.

a reply to: FyreByrd

Every time socialism fails somewhere you can always count on leftists to crawl out of the wood work and blame America for it.

a reply to: projectvxn



Yet another example why failed socialist policies should remain buried in the last century. Apparently those advocating for domestic socialism forget places like: USSR, NK, Venuzuela and the like.

a reply to: FyreByrd

Fyre, thank you for contributing and I appreciate your input and analysis

I agree the first part isn't the "who/what/where/when" of news, but it seems to be a reasonable analysis of the situation (at least IMO). It seems that fixed prices and massive inflation is causing this collapse, which is extremely unfortunate because of the major food shortage there already.

I can't believe a country sitting on so much oil would have financial troubles. Seems like mismanagement would also certainly be a contributing factor.

I do not relish the part that likely comes next. The nation of millions will be without food, at the whims of an increasingly desperate government

a reply to: JBurns

At what point do people realize that socialism is dumb? How many more empty grocery stores, gas stations and starving bellies do we need to understand that?

a reply to: BELIEVERpriest


Agreed BP. How many other individuals have to find this out the hard way? Socialism has claimed millions of lives globally, and it still continues to take lives to this day.

It is one of the greatest evils that exists in our world, right next to communism and fascism. Any form of totalitarianism is patently diabolical.

But hey, at least everyone is starving, dying and being victimized by rampant crime in Venuzuela equally.

Socialism is an unmitigated disaster.

a reply to: JBurns

Peace and safety to the good people of Venezuela.

Considering that the opinions are from an employee of the IMF: we might want to hold-off a bit before believing that bunch of piranhas.
They have huge PR machines, that make their manipulative lies almost make sense, so we go: "Yeah: that kinda makes sense, and it says he's an economics expert, so that must be true".

Before you judge it another failed social experiment: please let's listen to more sources of information, other than the Rothschild central banks, IMF, BIS, and the talking-heads for the spurned big-oil corps.

Who would you rather spend a weekend, alone in a fishing-camp with: A socialist, or a weasel economist from the IMF?

a reply to: Nothin


A socialist, hands down

The socialist may want to take half of my food/supplies, but the IMF vampire would try to take all of it!

Peace and safety to the good people of Venezuela.

That is one thing I think we all can agree on, for certain.

a reply to: JBurns

What they should do is double-down on socialism.

Since it's all great and stuff.

According to the link, "The International Monetary Fund predicts that inflation in Venezuela will hit 650% this year and 2,300% in 2018."

Good lord people (those that can afford to) are already having to leave the country to buy common items, wtf are we going to see next year when the paper is literally only good for wiping their butts.

I haven't read up on it in some time so I may be wrong, but this sure looks like its going to be worse than the Economic crash in Argentina. (if I am wrong please correct me)

I mean at least the Argentine govt tried to fix things, these people seem to be happy to drive the bus off the cliff into a pool of fire while bathing in kerosene.

a reply to: BELIEVERpriest


Sorry but I don't get it, in a country where you can just toss a seed in the ground and it grows fast, people are rioting? theirs a lot more to it than money.

originally posted by: JBurns
a reply to: Nothin


A socialist, hands down

The socialist may want to take half of my food/supplies, but the IMF vampire would try to take all of it!

Peace and safety to the good people of Venezuela.

That is one thing I think we all can agree on, for certain.

Good answer JB.
(Anecdotal) Have a Venezuelan friend at work. He is very sad to see the mess his beloved homeland is in.
He says a major problem is systemic corruption, up and down every level of government, and organizations.
He can't see any way out other than total collapse.

International sanctions are not helping the state of affairs now, but who's to say what the long-term affect will be.
Corruption is in all nations and institutions.
Personally don't trust any of them.

originally posted by: projectvxn
a reply to: FyreByrd

Every time socialism fails somewhere you can always count on leftists to crawl out of the wood work and blame America for it.

Yes Puerto Rico is a socialist state. Keep up the empty rhetoric.

a reply to: FyreByrd

Puerto Rico is a US territory under US legal jurisdiction. "Interference" as far as your post is concerned, makes little sense with regard to Puerto Rico.

But your insistence on a failure of Venezuelan socialism being somehow a product of US interference is just the typical response I expect to see from the adherents of socialist ideology.