Venezuela is the world’s newest failed nation. Over the past year the average Venezuelan has lost 18 pounds of body weight on the “Maduro diet.” Most people spend their days on the street, in line, regardless of education level or professional status. Gathering staples ranks as a leading cause of urban death. Gangs high-jack and deal in staples. Grocery store’s have none on offer. The elderly stand line along with teens. Both fail beneath tropical weight sunshine.
Caracas is world-class in murder. Maybe Baghdad matches. In graphic terms it’s very quick, bloody, producing higher totals and fewer survivors. The price of staples is easily seen in baby formula. A six-day supply costs a month’s average wage, now, more tomorrow. That price does not include all the risks and rip-offs of dealing in the black market. It wasn’t always this way.
Following the death of the autocratic yet beloved charismatic Hugo Chavez in 2013, Venezuela begrudgingly received his hand-picked successor. Nicolas Maduro. The never popular “populist” Nicolas Maduro has guided the once fairly prosperous Latin American nation into a nation-wide state of grinding poverty. It’s called dictatorship.
Maduro came to power with a nation encouraged by wide-spread transformation brought on by authentic populist Chavez reform. Venezuela inhales lovingly at the mention of Hugo Chavez’s name. Look at the country now and you know why.
In the hot roiling streets of the capital Caracas, the people beat pots, pans, and one another. Nonetheless, scant hope exists in this desperate attempt to return the country to any somewhat sane path. Each beating heart feels the strain while standing street level when the pans begin to roil. As the price of oil fell to the 40’s, the revenues of the Venezuelan government vanished. Venezuela sells oil and nothing else.
Now foreign currency is nonexistent, leaving the teetering government no funds to purchase internationally the goods required to support an increasingly desperate population. The government has for years subsidized heavily gasoline, and other basics. Not now. International corporate investment is packing–and leaving. One big U.S. consumer goods company just announced a complete departure from the country.
Venezuela’s economic collapse–who’s worried? Pepsico, Coca Cola, Mondelez, Clorox, Kimberly-Clark, 3M, Kellogg, Haliburton, Level 3, Newell Brands, Colgate Palmolive, Abbott Labs, among others.
The Venezuelan Bolivar has lost more than 40% of it’s value over the last 18 months. Hyper-inflation ravages purchasing power by the minute. When you sleep you become poorer–unless one holds their assess in another form than the worthless national Bolivar.
Mere weeks ago the widely-reviled President Maduro(54) staged a power grab involving the country’s supreme court. Dictator’s love power and Maduro played for more. The constitutional crisis brought hordes into the streets. Maduro’s crazed move was slapped back by the court, and no doubt the army standing in light shadow. The country stood on the verge of financial collapse. Then came Goldman Sachs.
What did Wall St. headliner Goldman Sachs do in Venezuela? Goldman purchased 2.1 billion dollars worth of Venezuelan bonds. This single move by Goldman Sachs provided a lifeline of international support to one of the world’s worst dictators.
Why would a financial firm with a global name take such an action? Profit of course. Sanctions only hurt the population. Much truth can be found in this argument. The powers that be control the resources. We’ve witnessed this around the world: Cuba, North Korea, Libya, China, Iran, Syria, Russia. Goldman could argue that business with a dictator doesn’t hurt the people. O.K.
Yet, will conditions in-country improve by extending two billion to a embattled dictator with a shiny loafer on the neck of a nation? Goldman could also argue that 2.1 billion dollars worth of bonds won’t matter. Venezuela’s in too deep. O.K. We know the 2.1 billion dollar deal mattered to someone. Goldman . No surprise.
Images sourced from Pixabay.
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