The Bolivarian Revolution in Venezuela is generating great opportunities… for speculators and Vulture Funds.

I refer to Kadhim Shubber’s and Andres Schipani’s “Future of debt repayments in doubt as oil slide precipitates surge in five-year CDS”, August 19.

It says “No big oil-producing country has felt the pain of the price crash as acutely as Venezuela, where crude sales account for 96 per cent of exports.”

Sir, it is much worse than that, because that 96 percent of exports goes directly into the coffers of a very centralized government, which de facto dooms Venezuela to become, sooner or later, a failed-state.

And we then read “Francisco Rodríguez, a Venezuelan economist at the bank [of America], reckons Caracas still has some fuel and estimates some $61bn in state-owned assets could be sold to plug the holes. “Venezuela could continue paying bondholders for longer than it keeps paying Mr Maduro’s salary,” he says, alluding to parliamentary elections in December”

I wonder how would you feel if you lived in an absolutely disastrously governed country, and an investment advisor, from a reputable bank, was advising your government on how to scrape the bottom of the barrel in order for it to survive as long as possible? This advisor has placed himself completely in an après-nous et vous-le-deluge mode. Would a private citizen of such country, or of any country, look with sympathy at this adviser and his employer? I think not… I sure hope not!

What is Venezuela to do when its utterly inept government has used up that $61bn to plug the holes, which includes serving creditors/speculators… and perhaps therefore a bank economist earning a bonus?

@PerKurowski

For some of us the gold of Venezuela, in Venezuela, even though worth less, is pure profit

Sir FastFT refers to the losses derived from that “Hugo Chávez… no fan of what he called the “dictatorship of the dollar”, and forced the central bank to hold most of its reserves in bullion rather than greenbacks.”, “Venezuela faces double blow as gold and oil prices slide” November 5.

But what the report misses is that Hugo Chávez forced the central bank to hold most of that gold… in Venezuela! That made these reserves much less operative, much less negotiable… something many of us who despair to see so many resources being dilapidated in our country, find not all that bad.

In February 2012, in an article published in El Universal I wrote: "I must express great satisfaction with the arrival of our gold to Venezuela, at least what came was saved, at least for the time being. Where that gold was stored it could easily disappear, in a flash, with the government just writing a check."

PS. After writing for El Universal for 14 years in July 2014 I was one of the first four censored by the new pro-government owners. (So you see FT is not alone in its opinions of me :-))

Sounds like a lot of butterfly wing flapping!

Sir Marc Chandler in his “This is the rainy day Japan’s reserves are meant for” February 22 suggests that Japan should give $242bn of their reserves to the Japanese so as to boost the internal demand. Great idea! Pity though that bringing home $242bn while the sun is not really shining on the US economy sounds a fraction more than a butterfly flapping its wings and will cause some other effects to the economy of the world.