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According to the Financial Times, it will be the world’s largest debt restructuring.[a] Venezuela's economy has been a disaster for many years.[b] Surely I'm n
by cs702 3mo ago
According to the Financial Times, it will be the world’s largest debt restructuring.[a]
Venezuela's economy has been a disaster for many years.[b] Surely I'm not the only one wondering:
Where did all that borrowed money go? If any of it had been spent to buy goods and services inside Venezuela, it would have led to at least some business formation and activity. Instead, there's only been business destruction and constant crisis. It's kind of incredible that the country has nothing to show for all the money it borrowed.
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[a] https://www.ft.com/content/b7f25ca2-827c-40f9-ab1a-57067d8ec90d https://www.ft.com/content/b7f25ca2-827c-40f9-ab1a-57067d8ec... (paywalled)
[b] https://en.wikipedia.org/wiki/Crisis_in_Venezuela https://en.wikipedia.org/wiki/Crisis_in_Venezuela
- hungryhobbit 3mo agoCorruption.
- throwitaway222 3mo ago[flagged]
- ceejayoz 3mo agoDefinitely doesn't happen under capitalism, right? Remind me again what the current President's net worth has done recently?
- throwitaway222 3mo agoI'm 100% fine with moving almost all government payments to a system where elected officials need to sign off before a payment is made. As long as he/she is willing to be responsible for the fraud that takes place. And I will walk Trump to jail when this happens, just as I walk the names I posted to jail too. And no, in PURE capitalism, it doesn't happen. It's just that we have too much socialist shit. In pure capitalism, every dollar that is lost to fraud is going to be looked at by investors and scrutinized. And besides it will have only affected the company that did it, not the country and not the voters and tax payers.
- ceejayoz 3mo ago> And no, in PURE capitalism, it doesn't happen. Just like PURE communism!
- throwitaway222 3mo agoPure Communism - as in marxism, the default is Elites make choices on where to allocate funding. Nowhere in that manifest is a checks and balances system. So yes, in pure communism, it is a direction to fraud. Not Capitalism.
- ceejayoz 3mo agohttps://www.reddit.com/r/whoosh/ https://www.reddit.com/r/whoosh/
- throwitaway222 3mo agoOk ok thank you for the levity, I'm a bit autistic with this stuff.
- brightbeige 3mo agoAt least your reply wasn’t written by AI
- cs702 3mo agoObviously, but $240B is a lot of money for a country with only 9M households, so, around $27K/household. It's an "accomplishment" of sorts to blow up in smoke that much money per household, with nothing to show for it. How the heck did they do that?
- 55555 3mo ago1. Dictator gets loans for his country 2. Dictator puts the money in his Swiss bank account 3. Government is overthrown 4. The populace has to pay off the debt Perhaps him being in custody will lead to some of the money being found and returned.
- seanmcdirmid 3mo agoIsn’t that how private equity works?
- joenot443 3mo agoI don't think there's a Swiss bank account in the world with room for $240b. There's no doubt Maduro enjoyed some taste of the froth, but this is a silly oversimplification.
- ErneX 3mo agoCorruption at every level of government. Everybody was getting a piece of it. Add to that mismanagement, stupid subsidies. Plus they had a huge oil windfall during the early Chavez years. All that money is gone, I wish it was just the money that was borrowed from abroad. They also spent billions to influence the elections of the other countries of the region. Chavez was also giving away oil for free in exchange of political support abroad. He even gave free oil for the buses of London because the mayor at the time was in good relations or something.
- nwah1 3mo agoLook up the lifestyle of Hugo Chavez's daughter, or the family of Tareck El Aissami, or the Narconephews affair, or the Cartel of the Suns.
- glitchc 3mo agoInto the pockets of the leaders. The people will pay for it through a cut of oil profits for the foreseeable future.
- BurningFrog 3mo agoIn a dictatorship, the money goes to the dictator and his friends.
- SilverElfin 3mo agoIt’ll be hard to know where it goes, but there’s a reason why people like Putin are billionaires. They siphon off funds from the state to themselves. And no one is in a position to stop them or even look into what’s going on. Venezuela was allegedly planning to invade a resource rich neighbor before the Trump administration’s actions, as part of a long standing territorial dispute, and I think that was partly so Maduro could keep the support of the population but also partly to deal with the financial problems. So their leaders definitely knew these issues were building up.
- ErneX 3mo agoTo be honest that was a huge bluff. There’s no way the decimated Venezuelan army after so many years of corruption could even threaten to invade anybody. Not downplaying the seriousness of the whole thing but even Venezuelans knew that was a distraction.
- JumpCrisscross 3mo ago“Investors have previously estimated that Venezuela also owes $30bn-$50bn to oil companies and trade creditors for unpaid invoices and more than $20bn in legal claims awarded to companies after Chávez’s regime expropriated their property. Venezuela has also been estimated to owe $10bn-$20bn to China in debts that Caracas previously paid from oil exports but is believed to have stopped servicing, about $6bn to Russia, and $4bn to development banks” (FT).
- cs702 3mo agoThe legal claims from expropriation, I get that... but everything else was actually borrowed. Whether the form was debt issuance or unpaid accounts payable, the rest actually was borrowed. It's kind of an "impressive accomplishment" in my view.
- JumpCrisscross 3mo ago> doesn't matter if the form was debt issuance or unpaid accounts payable, it was borrowed It matters by whom it was lent. Caracas telling China to fuck off is pretty easy right now. Less so if it’s an American investor. If anyone has an outline of to whom the other hundreds of billions are owed, I’d be curious to see it.
- cs702 3mo ago> If anyone has an outline of to whom the other hundreds of billions are owed, I’d be curious to see it. Me too. That's one of my questions. The other questions I have are about the shocking misuse of funds.
- legitster 3mo agoVenezuela had one of the largest government sectors compared to their GDP. Their solution to every economic problem was create lots of government busywork jobs funded by oil exports and loans. Their crude is really only valuable to a handful of countries, the US being the main one. They could really not afford to have worsening relations with the US right as the fracking boom took off. As their domestic industry shrank, they had to import more and more resources from other countries.
- ErneX 3mo agoIt’s not only the money borrowed, it was also the biggest oil windfall it ever had during the Chavez early years. Where did it go? They stole it.