ECON Venezuela inflation is expected to rise 1,660% in 2017

http://money.cnn.com/2017/03/01/news/economy/venezuela-cash/index.html


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Venezuela is down to its last $10 billion

By Patrick Gillespie March 01, 2017 12:09PM EST
Caracas is running out of cash.
Venezuela only has $10.5 billion in foreign reserves left, according to its most recent central bank data.
For rest of the year, Venezuela owes roughly $7.2 billion in outstanding debt payments.

In 2011, Venezuela had roughly $30 billion in reserves. In 2015, it had $20 billion. The trend can't persist much longer, but it's hard to know exactly when Venezuela will run completely out of cash.
"The question is: Where is the floor?" says Siobhan Morden, head of Latin America fixed income strategy at Nomura Holdings. "If oil prices stagnate and foreign reserves reach zero, then the clock is going to start on a default."

According to the country's recently released 2016 financial report, about $7.7 billion of its remaining $10.5 billion of reserves is in gold. To make debt payments in the past year, Venezuela shipped gold to Switzerland.

The thinning reserves paint a scary financial picture as the country faces a humanitarian crisis sparked by an economic meltdown. Venezuelans are suffering massive food and medical shortages, as well as skyrocketing grocery prices.
Related: Venezuela may have issued passports to people with ties to terrorism
Massive government overspending, a crashing currency, mismanagement of the country's infrastructure and corruption are all factors that have sparked extremely high inflation in Venezuela. Inflation is expected to rise 1,660% this year and 2,880% in 2018, according to the IMF.

Another key problem is the relatively low price of oil, which stands at half of what it was in 2014. Venezuela has more oil reserves than any other nation in the world, and oil shipments make up over 90% of the country's total exports.
That's making it nearly impossible for the country to pay its debts and import food, medicine and other essentials for its citizens.

Venezuela's imports are down 50% from a year ago, according to Ecoanalitica, a research firm in Venezuela.

I was just watching some "Carnival" video from my friend the Monk and Catholic Priest; it was obviously just a small in-house/church thing; but in the past the young adults in his congregation have been like many Venezuelans the last thirty years or so; mostly on the chubby side and sometimes actually in the really fat range; this is from a combination of genetics and a over-abundance of Maize Corn, fried plantains and other deep fried food traditions in a country where ovens and stoves were scarce in traditional cooking methods.

This is the FIRST film where the level of "chub" is way-way down; don't get me wrong I'm pump myself but I noticed that while some of the ladies in his photos are still what a US doctor would call overweight - the over-all BMI looks to have shrunk a great deal, some of it just since the start of last Fall (again going by pictures he posts of various Church services, parties etc).

That means that fairly quickly the food levels are going down from: "will fill you up but is mostly starch that will make you fat [beans/rice/cornmeal cakes with friend bananas]" to "not enough starches to make you fat or probably even make you feel full."

The next step is likely going to be people looking more and more thin; which while it may be associated with "healthy" in the minds of many; is not "healthy" if it results from actual starvation and lack of nutritious food.

In fact the only person in the most recent photos who is really fat (and jolly) is my friend the Monk and Priest!

But then his Dad was a huge guy and the "Jackie Gleason" of Venezuela and from the same generation; so the genetics are there to put on weight just by looking at food and I suspect the monastery probably still has a reasonable kitchen; especially since their Mother House is in France.

I keep hoping that "V" will stop by on a visit to the Mother House because I want to ask him how things REALLY are; and as a former government prosecutor before he became a Priest he probably knows but obviously he can't tell me on public communication sources; the NSA is not the only agency reading e-mail and facebook.

Venezuela only has $10.5 billion in foreign reserves left, according to its most recent central bank data.
For rest of the year, Venezuela owes roughly $7.2 billion in outstanding debt payments.

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I would like to see the two similar figures for the U.S.

When the money runs out the military won't get paid or have food and other supplies coming in.
Eventually there will be a military coop. But the new leader will literally start with nothing. No cash, no gold, and anything of any value already looted. Very dark days ahead for the people of Venezuela.

Venezuela inflation is expected to rise 1,660% in 2017

What was it Maggie said - "The problem with socialism is that eventually you run out of other peoples' money."

They have been a lot of "test runs" of many different things, in different places.

I am kind of wondering if the ball will drop, everything will implode this spring/summer. Many things seem to be pointing to it, unfortunately...including people's tempers/frustrations.

That March 15th deadline for the debt ceiling especially caught my eye...will they kick the can down the road further, again, this time?

will they kick the can down the road further, again, this time?

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Of course they will just like Venezuela has done in the past.

hiwall said:

Of course they will just like Venezuela has done in the past.

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If they are a US/Right military coop (and remember right and left don't quite mean the same thing in South American politics as they do in the US) then my hunch is that Venezuela will do as it has done occasionally in the past - throw open the door to multinationals who will happily take over the major industries (taking most of what is left out of the country and paying next to zero taxes); beg the US for Aid (which they may get but again under the shadows of groups like Black Water (or whatever their name is) sweetheart deals (that pay whomever is in power a bribe) and direct military acting against anyone who complains (as in throwing people live out of helicopters over the ocean).

In the short term things will improve, but if the gravy train is cut off (or never gets stated) then look for some serious regional violence as Colombian rebels (now mostly out of a job) move over into their neighboring country; mobs of people hunt desperately for food (and become armed) and Caracas becomes like Kabul; a city that has some government and military and large areas of the countryside that are pretty much on their own or ruled by local strong men (caldillos).

Neither option is good, but the first choice is probably the best that will happen; now if a more seriously left wing coop takes place (military); then the US could have a Chinese colony only a few hours away; depending on if China thought it was worth it (there are lots of nice beaches to put navel basis on, I'm just saying)...

Melodi said:

If they are a US/Right military coop (and remember right and left don't quite mean the same thing in South American politics as they do in the US) then my hunch is that Venezuela will do as it has done occasionally in the past - throw open the door to multinationals who will happily take over the major industries (taking most of what is left out of the country and paying next to zero taxes); beg the US for Aid (which they may get but again under the shadows of groups like Black Water (or whatever their name is) sweetheart deals (that pay whomever is in power a bribe) and direct military acting against anyone who complains (as in throwing people live out of helicopters over the ocean).

In the short term things will improve, but if the gravy train is cut off (or never gets stated) then look for some serious regional violence as Colombian rebels (now mostly out of a job) move over into their neighboring country; mobs of people hunt desperately for food (and become armed) and Caracas becomes like Kabul; a city that has some government and military and large areas of the countryside that are pretty much on their own or ruled by local strong men (caldillos).

Neither option is good, but the first choice is probably the best that will happen; now if a more seriously left wing coop takes place (military); then the US could have a Chinese colony only a few hours away; depending on if China thought it was worth it (there are lots of nice beaches to put navel basis on, I'm just saying)...

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China was my first thought too. They already have a strong immigrant presence in Central America. Even the resident Dutch I met there, who were remarkably and naively blase about everything didn't like the local Chinese.

Red Ice has a recent interivew re the Chinese in NewZealand. I think any country with a weakness can expect the Chinese to pour in. For the West it is Confessions of an Economic Hit Man redoux, only now, we are on the losing side.

Yeah, I also wouldn't be surprised if Malduro tried to play the China Card, though it may be there is a personal price there he isn't willing to consider; but a "left" military junta that was desperate enough probably would do this, and it is possible it could happen under the current government.

Didn't China lend Venezuela quite a bit of money a couple years ago?