It begins: Venezuela defaulting on loans

[OnMyWayID 1,489]

Venezuela in selective default on domestic debt exceeding US$14 billion

CARACAS -- Venezuela has selectively defaulted on its domestic commercial debt, suspending payments to a wide gamut of creditors owed more than US$14 billion, economists here say.

The leftist government of President Nicolas Maduro has kept up payments on its sovereign bonds and those of state oil company PDVSA to avoid the risk of asset seizures.

But its unpaid debts with importers of automobiles and auto parts, medical supplies, chemicals and airlines exceed US$14 billion, according to former Central Bank of Venezuela manager Jose Guerra, who adds that “a commercial default has been incurred, a suspension of payments.”

“The government decided to engage in a selective default in the internal market and not the external,” agrees Luis Oliveros, an economist and professor at the Central University of Venezuela.

In a country with the world's largest oil reserves, but which imports nearly everything it consumes, the unpaid debts pose a mounting threat to the faltering economy, as well as to already chronic shortages of food and medicine that are getting worse.

Many industries already are paralyzed by the lack of supplies — including five auto assembly plants — and airlines have either drastically reduced flights to Venezuela or, in the case of Air Canada and Alitalia, have pulled out of the market altogether.

The article continues here: http://www.chinapost.com.tw/commentary/afp/2014/05/22/408290/Venezuela-in.htm

Edited May 21, 2014 by OnMyWayID

[mota bhai 2,675]

The American Tea Party is watching and getting inspired.

[OnMyWayID 1,489]

I really don't understand the Chinese not getting more involved and helping Venezuela out.. They appear to have more to lose than anyone. Besides the Venezuelans of course.

Edited May 21, 2014 by OnMyWayID

[Operator 1,927]

I was doing business down there between 2000 and 2006 and did pretty well. When the factory I was working with ran out of money they just shut the doors and sent 150 people home. Luckily I got paid but I know they left a lot of open tabs on the bar.

The Chinese must be happy with the deal they just made with the Russians to worry about Mr. Maduro.

[Mr. Big Dog 10,747]

The American Tea Party is watching and getting inspired.

Absolutely! Ted Cruz is thinking: "This is exactly what I'll do when I'm President"

[OnMyWayID 1,489]

I was doing business down there between 2000 and 2006 and did pretty well. When the factory I was working with ran out of money they just shut the doors and sent 150 people home. Luckily I got paid but I know they left a lot of open tabs on the bar.

The Chinese must be happy with the deal they just made with the Russians to worry about Mr. Maduro.

Looking at what they owe the Chinese.. They borrowed 40+ billion and pay it back in oil.. Currently the interest on the loans is 310,000 barrels per day.. That seems like a s**t load of oil to be skimming off the top.

[JohnR! 5,495]

So Venezuela is literally choking on oil. #######!

Absolutely! Ted Cruz is thinking: "This is exactly what I'll do when I'm President"

I hope they ask for his birth certificate....

[JohnR! 5,495]

Looking at what they owe the Chinese.. They borrowed 40+ billion and pay it back in oil.. Currently the interest on the loans is 310,000 barrels per day.. That seems like a s**t load of oil to be skimming off the top.

The problem is that PDVSA does not own the technology required to maintain the rigs. Their machinery is getting older by the minute and subjected to little maintenance. Nobody will give them credit for obvious reasons, so slowly their oil production will halt for lack of appropriate equipment.

[The Nature Boy 4,224]

Edited May 21, 2014 by The Nature Boy

[Crashed~N2~Me 970]

Meanwhile somewhere ..in a pink velvet walled room...sitting cross legged on a pink polka dot velvet bean bag.. wearing only a pink silk G- String & Barney socks..Sean Penn watching the news about the default via satellite..... clutches an ornately framed pic of Maduro in his left hand and one of Chavez in his right...tears streaming down his face / rocking back and forth gently sings..."the wheels of the bus go round and round ..round and round...round and round....."

[OnMyWayID 1,489]

The problem is that PDVSA does not own the technology required to maintain the rigs. Their machinery is getting older by the minute and subjected to little maintenance. Nobody will give them credit for obvious reasons, so slowly their oil production will halt for lack of appropriate equipment.

That's the case now (that nobody will extend them credit).. but they had 28 billion to update infrastructure and expand and somehow managed to produce even less oil. This was a near no-fail operation.. I am amazed that even an extreme left leaning controlling government somehow made it fail.. I could understand if they had expanded oil production but the prices were too low to pay back the money they borrowed or *something* they could not control or didn't take into consideration.. There is nothing... ..

Edited May 21, 2014 by OnMyWayID

[JohnR! 5,495]

That's the case now (that nobody will extend them credit).. but they had 28 billion to update infrastructure and expand and somehow managed to produce even less oil. This was a near no-fail operation.. I am amazed that even an extreme left leaning controlling government somehow made it fail.. I could understand if they had expanded oil production but the prices were too low to pay back the money they borrowed or *something* they could not control or didn't take into consideration.. There is nothing... ..

Greed knows no political affiliation. I bet you most of the 28B is stashed somewhere in Switzerland of the Caymans...

Edited May 21, 2014 by Gegel

[OnMyWayID 1,489]

Greed knows no political affiliation. I bet you most of the 28B is stashed somewhere in Switzerland of the Caymans...

I remember the bruhaha a couple of years ago when Chavez daughter posted the instragram of her holding up a pile of dollars... Though it really wasn't very much money.