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Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments

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Re: Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments

#71
post #58

Earlier quoted context omitted.

No, there is good reason to believe the election was fair. The mainstream U.S. reporting on this is extremely biased; the U.S. has a long history of deeply anti-democractic attitudes towards Latin America (since at least the Monroe Doctrine). Excellent and detailed reporting here:[1] "...key opposition candidates in the governor's races in Venezuela are gradually accepting the results as legitimate, except for one co…

My go-to source on this has actually been Jacobin - first because socialist regimes abroad are their wheelhouse, and second because they're particularly incentivized to give a positive view of Venezuela. They gave Chavez consistent support well past 2002, which makes me think they're not subject to the criticism you've offered here. And yet... Well, these days their reporting looks like: https://www.jacobinmag.com/20…

There is nothing in your sources that disputes the legitimacy of the election results. Your second citation actually criticizes the first:

In a recent article, Mike Gonzalez pronounced the Bolivarian Revolution dead: “This project has failed.” Needless to say, this cavalier suggestion would come as a surprise to those on the ground... Gonzalez begins with a strange conspiracy theory: that a helicopter attack against government targets was really a false flag operation carried out by the government itself. Unfortunately for him, this unsubstantiated innuendo — which echoed right-wing talking points — didn’t age well: less than a week later, Oscar Pérez made an appearance at an opposition rally.

It continues,

By portraying a chaotic constellation of facts without explaining their causes, by heaping blame onto the government while letting the opposition and imperialism off the hook, Gonzalez’s account shares much with its professed adversaries... left almost entirely out of this picture are the hundreds of thousands struggling for socialism on the grassroots level and having to make difficult decisions — with real consequences — amid the crisis of the present.

And your third source explicitly calls "to reject any and all calls for imperialist interventions aimed at 'saving' Venezuela." In conclusion it calls for us

to stand in solidarity with the majority of Venezuelans who are suffering at the hands of a vengeful, reckless opposition, and an incompetent, unaccountable government. There is little doubt popular-class support for the government has declined in recent years... It is equally clear popular-class support for the opposition remains limited, likely due to the popular classes’ well-founded distrust of and disgust towards the opposition, and particularly its violent, leading edge.

In short, they had an election where the people had to make some hard choices, like many democracies. Your sources do not dispute the validity of the election. A foreign country undermining an election in support of the violent opposition, which was explicitly rejected by the popular vote, is objectively not "in the interests of the people."

Re: Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments

#72
post #44

Earlier quoted context omitted.

54% of the population supported the Maduro government in the election.[1] If you think Trump is taking the "correct action," you're against democracy at this point. [1] https://www.greenleft.org.au/content/venezuela-election-resu...

When this is the outcome, I am definitely against democracy. The Nazis were elected into power through democratic processes, does that make anything they did somehow ligitimate? Do the venezuelan people deserve to die of starvation and lack of basic medical necesities b/c they elected a criminal into power (assuming your stats are true)?

The Nazis were elected into power through democratic processes

This is not true. The high-water mark for the Nazis was 43.9% in the 1933 election, far short of a majority. Hitler was appointed chancellor in a shady backroom deal and shortly afterwards banned all other political parties.

Re: Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments

#73
post #26
post #13

Earlier quoted context omitted.

You should ask some Greeks if they feel they are in a colony like position with respect to Brussels/Germany. Controlling your own money is a key factor to maintaining sovereignty. Goldbugs take this to a level where they desire personal sovereignty and thus a money not controlled by the government (gold or silver).

It's seldom for a debtor in need to choose the currency. If Greece kept drachma, they'd still need to borrow in euro or dollar as few would have drachmas to loan. US can take loan in dollars because everyone has dollars to park, which is because everyone else has dollars too.

In any country with a free exchange of currency there is no problem for investors to get any amount of currency they want. They buy it on the open market. Forex is the biggest and most liquid market in the world. Before the Euro every country in Europe had bonds in their own currency. Interest rates were higher in some due to inflation and default risk, but there was no problem borrowing large sums of money.

Re: Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments

#74
post #44

Earlier quoted context omitted.

regardless of what you think of Trump, this is the correct action. The maduro govt is not just full of issues, they are murdering and starving their own population and any funds are used to prop up the privileged few elite in the aristocracy. El mercosur is about to expulse venezuela so this is not just some yankee only EEUU foreign agression bs. If you support the Maduro government, you're against humanity at this p…

54% of the population supported the Maduro government in the election.[1] If you think Trump is taking the "correct action," you're against democracy at this point. [1] https://www.greenleft.org.au/content/venezuela-election-resu...

Another high quality comment on HN.

Re: Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments

#75

Earlier quoted context omitted.

When this is the outcome, I am definitely against democracy. The Nazis were elected into power through democratic processes, does that make anything they did somehow ligitimate? Do the venezuelan people deserve to die of starvation and lack of basic medical necesities b/c they elected a criminal into power (assuming your stats are true)?

The Nazis were elected into power through democratic processes This is not true. The high-water mark for the Nazis was 43.9% in the 1933 election, far short of a majority. Hitler was appointed chancellor in a shady backroom deal and shortly afterwards banned all other political parties.

It seems you're assuming democratic systems/processes are only two party and rule by majority i.e. votes of > 50% means power. Thats not what I said, but if thats your definition then though a valid point, it still doesn't apply to the nazi situation. Most social democratic systems in Europe now and then dont work this way. You can easily become a controlling party by getting 20-30% of the vote even today in Germany for instance. At the time it was much worse, you could become a represented political party with a very low % of votes (under 5%)

Re: Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments

#76
post #44

Earlier quoted context omitted.

54% of the population supported the Maduro government in the election.[1] If you think Trump is taking the "correct action," you're against democracy at this point. [1] https://www.greenleft.org.au/content/venezuela-election-resu...

Another high quality comment on HN.

Curious what you thought was low-quality about it.

Re: Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments

#77
post #12

On August 25, 2017, US President Donald Trump issued an executive order limiting the government of Venezuela's ability to access certain types of international financing. This would certainly curtail the governments ability to ease the pressure of bond payments. https://www.usatoday.com/story/news/politics/2017/08/25/exec... when you cant sell assets, you cant repay a bond. PDVSA, the nationalized oil asset of the st…

> one becomes immediately suspicious of the US intent in latin america These restrictions are forcing an inevitable outcome sooner. Venezuela's debt load is unsustainable for reasons entirely of Chavez and Maduro's doing (as well as the people who elected them in elections that were, until fairly recently, fair and free [1]). Suspicion is good. Using baseless suspicion to deflect attention from a well-based problem i…

> inevitable outcome

That's the problem here. You've decided the only way Venezuela can emerge through this is by collapse and rebirth.

Pushing 31 million people right to the brink and hoping they fall your way is far from inevitable.

It doesn't have to be that dramatic and painful.

Re: Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments

#78

Earlier quoted context omitted.

> one becomes immediately suspicious of the US intent in latin america These restrictions are forcing an inevitable outcome sooner. Venezuela's debt load is unsustainable for reasons entirely of Chavez and Maduro's doing (as well as the people who elected them in elections that were, until fairly recently, fair and free [1]). Suspicion is good. Using baseless suspicion to deflect attention from a well-based problem i…

> inevitable outcome That's the problem here. You've decided the only way Venezuela can emerge through this is by collapse and rebirth. Pushing 31 million people right to the brink and hoping they fall your way is far from inevitable. It doesn't have to be that dramatic and painful.

> You've decided the only way Venezuela can emerge through this is by collapse and rebirth

No, I have not. There are three ways a sovereign can deal with its debt: taxation, inflation and default. Chavez nationalized everything he could. Maduro inflated away the locally-denominated debt [1]. Dollar-denominated debt is immune to Bolivar inflation, so what's left is further taxation or default.

Maduro is choosing further taxation. ("Taxation" refers to the government's take rate of economic activity. Democracies publish tax rates. Dictatorships seize.) I'm arguing they should default. This would be good for Venezuela but bad for Maduro's regime, which appears to use dollar debt for patronage.

[1] https://upload.wikimedia.org/wikipedia/commons/5/58/Venezuel...

Re: Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments

#79
post #13

Earlier quoted context omitted.

Nobody wants BSF. Plus the government does shenanigans with the exchange rate, with the official exchange rate having no relationship to reality. If you refloat debt in a different valueless currency that you control the exchange rate on, you're de facto defaulting - nobody wants your currency. They want hard currency. Re: currency you don't control, do you consider Ecuador a colony? They have debt in the sucre, whic…

You should ask some Greeks if they feel they are in a colony like position with respect to Brussels/Germany. Controlling your own money is a key factor to maintaining sovereignty. Goldbugs take this to a level where they desire personal sovereignty and thus a money not controlled by the government (gold or silver).

Well, the Greeks had a grand old time borrowing against the Euro when people were still willing to lend to them.

When the piper came due, they couldn't raise interest rates or devalue their own currency to deal with the situation.

Point is, it's not a colony situation. For a while, Greeks loved the fact they could borrow against the EU with low interest rates, much lower than their own financial situation would indicate. Once people started wanting their money back, yes, this limited their options. They probably shouldn't have put their own economy into that situation though, that's why the drachma used to fluctuate up and down so much and the interest rate was high, because they weren't really good for the money they borrowed.

Re: Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments

#80

Earlier quoted context omitted.

Nobody wants BSF. Plus the government does shenanigans with the exchange rate, with the official exchange rate having no relationship to reality. If you refloat debt in a different valueless currency that you control the exchange rate on, you're de facto defaulting - nobody wants your currency. They want hard currency. Re: currency you don't control, do you consider Ecuador a colony? They have debt in the sucre, whic…

"currency you don't control, do you consider Ecuador a colony? They have debt in the sucre, which is pegged to the dollar. Is most of Europe a colony of Brussels?" You can make a powerful case that they are. A country that doesn't control its money doesn't control its economic policy. Is there anything more important than the economy for a country? A fair economic area need, first, a monetary and fiscal common policy…

I think you're over simplifying a bit.

> A country that doesn't control its money doesn't control its economic policy. Is there anything more important than the economy for a country?

http://www.coha.org/examining-the-effects-of-dollarization-o...

The point of the article is that the economy of Ecuador was so bad dollarization caused capital flight to stop, stabilizing the economy.

I'm not an economist, but maybe the short term benefits outweighed the long term restrictions. But it did impose some amount of financial discipline on them that they never exhibited before, and would probably boost the confidence of foreign investors that they could invest and still get money out.

As a counterpoint, Venezuela is not a colony, but their economy is in a shambles, they can't feed their own citizens, but they have ultimate monetary control and can do whatever they want to their economy. That's what got them in this mess in the first place. Some thing as PRK and Cuba.

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