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Nov 15 2017

Venezuela Staggers Toward Default

Recently, Venezuela was the wealthiest country in South America, largely because it is afloat on a sea of black gold. Then came socialism. Now it demonstrates why you do not lend money to socialists:

On Monday Caracas missed interest payments due on two government bonds and one bond issued by the state-owned oil monopoly known by its Spanish initials PdVSA. Venezuela owed creditors $280 million, which it couldn’t manage even after a 30-day grace period.

Venezuela can’t pay its debts because it is broke. Here’s where all the money went:

[I]n 2005 the socialist Hugo Chávez declared that the central bank had “excessive reserves.” He mandated that the executive take the excess from the bank without compensation. Today the central bank has at best $1 billion in reserves.

Remember when Barack Obama proclaimed that “at a certain point you’ve made enough money”? Venezuela presents the results of letting ham-fisted ideologues determine what is enough money.

Faced with expropriation, hyperinflation, price controls and rampant corruption, human and monetary capital has fled Venezuela.

The country has not been officially declared in default, but it won’t be long. Restructuring the debt won’t work, because it requires the economy to grow again, which will never happen with Big Government affixed to it like a facehugger from the Alien movies.

Venezuela is what Bernie Sanders supporters want to reduce America to. They are becoming the base of the radicalized Democrat Party.

On a tip from Bodhisattva.

14 Responses to “Venezuela Staggers Toward Default”

  1. ICEvictim says:

    just send a load of Millennials down there. They are all in for socialism, but of course only THEY know how to do it.

  2. Mr. Freemarket says:

    Venezuela’s problems are, of course, due to Donald Trump.

    “Very little was announced and nothing was resolved, according to attendees who said they left just as confused about the government’s intentions as they were going in. Vice President Tareck El Aissami was the only official to speak, and devoted most of his prepared remarks to railing against U.S. President Donald Trump and global financiers who he said have conspired to keep the country from making debt payments on time. He pledged the nation would continue to honour its obligations and work with bondholders to find new ways to get them their money, but offered no concrete proposals for restructuring.”

    Of course the problem isn’t that bankers aren’t willing to structure the debt differently. The problem is that Venezuela isn’t making payments because they have no money.

  3. Mr. Freemarket says:

    I would remind all of you that the only problem with fascism is we just haven’t tried it properly.

  4. physicsnut says:


  5. Andrew Pearce says:

    Venezuela floats on an ocean of liquid money. Only communism and socialism could screw that up. Oh, and corrupt crony tyranny. But … holy cow.

  6. Frank says:

    Make America Venezuela!
    ~ Bernie Sanders

  7. Frank says:

    Wow! Who (besides democruds) could resist that?

  8. Callawyn says:

    When Hugo Chavez, Obama’s personal HERO, was at the height of his power oil was also at the top of its price bubble.

    Thinking that it would continue to climb, he and his fellow Socialists imposed the full Marxist anti-capitalist policy package on their nation. They essentially de-industrialized EVERY industry in their country other than oil.

    All the while sending “aid” packages to Cuba and to fellow Socialist regimes in Central America.

    Then oil prices dropped in half, thanks to US fracking. Which is awesome!! Also, a vindication (as if one were needed) of the advantages of Free Market Capitalism over every other system that’s ever been tried.

    Ever since, Venezuela’s economy has been non-existent. Their inflation rate is measured in the thousands of %.

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