Authored by Bill Bonner via InternationalMan.com,
Let’s turn to an economy getting doomier by the day: Venezuela.
Actions have consequences. In public policy, it is impossible to say what the consequences will be. There are too many delusions and too much smoke.
Take a policy said to eradicate city rats. Its real purpose is to reward a large political donor who owns a pest control firm. It ends up killing the pigeons.
As its foreign reserves dwindle to less than $10 billion, the government of Venezuela – desperate for any kind of financial lifeline - has partnered with a Chinese brokerage to try and resell $5 billion in bonds that it initially issued at a deep discount, according to the Wall Street Journal. The brokerage, Haitong Securities USA, a unit of China’s Haitong Securities, is quietly marketing the bonds to yield-starved hedge fund managers.
News that Goldman purchased some $2.8 billion in Venezuela bonds issued by state oil company PDVSA and until recently held by Venezuela's central bank - at a 30% discount to market, paying 31 cents on the dollar or around $865 million in notional - quickly set off a firestorm of angry protests, in which Goldman was accused of making money from other people's misery (even though the story of Goldman's involvement in Venezuela's debt is hardly new, as we reported in 2014 in "How Goldman Sachs Became Broke Venezuela's Loan Shark"
In late April, the Venezuela opposition slammed attempts by the Maduro regime to liquidate some/all of the nation's gold in order to buy his crumbling regime some additional time with much needed liquidity.
Authored by Simon Black via SovereignMan.com,
Pop quiz: What country has the world’s best performing stock market?
It’s not the United States. Or Canada. Or China.
The answer is Venezuela, whose primary stock market index over the last year is up nearly SEVEN FOLD, from 11,700 last summer to a record 72,700 today.
It’s amazing that a country where people are literally starving because there’s very little food available is seeing record stock market performance.