martes, 25 de julio de 2017

Trump's threats against Castro's communism in Venezuela are serious

In the debt markets, investors and speculators flee at any price from Venezuelan bonds, speculating that the Castro regime will not stop to impose the "constituent assembly," which will lead to economic sanctions that will generate economic disaster in the country , With very serious consequences

By Alex Vallenilla / @alexvallenilla

According to how the markets are moving, the speculation that an explosive situation in Venezuela is present, within the framework of the development of the "constituent assembly" election, has high probabilities, in fact, situations of overt violence may be before And in the framework of the same process, which, when it did not stop, knowing the Stalinist nature of the castrocommunism, would make the situation the next week much more extreme.

No one believes in Rodríguez Zapatero, although he has managed to have the house imprisoned the leader of Popular Will, Leopoldo López, the event did not contribute to the tense situation, loosen up a bit. The regime wanted the pressure to go down, but it was not achieved. Seen in the foreign exchange market, the dollar had to give up a little, because having allowed Lopez to return home meant that behind it there is a process of negotiations, which could be interpreted as a change in the dynamics that exist today, which could have Led to the idea that a negotiation would help to stabilize the country and reduce the effects of the crisis. It did not happen, the "López" effect did not occur, which has two readings, or there is no negotiation process, or the one that is extremely weak. The market operators had to react, investors, assuming speculative positions at least in the Venezuelan debt market, given the speculation that the normal situation in Venezuela could be based and has been the opposite, the risk continues to rise.

On the other hand, in what the investors believe, it is in the threats of Donald Trump, who has said that he would apply economic sanctions to Venezuela and other officials if the Castro regime uses the constituent. Markets have moved and been felt in the Venezuelan and Venezuelan debt bond quotes. The fall was registered last Thursday with an additional decline of -1.82% in a joint manner. It should be taken into account that since Nicolás Maduro announced the constituent assembly, the bonds have fallen -10.42%, indicating that investors flee from Venezuelan securities, in total distrust not only to the effects and the impact it has To implement such an instance, but to the measures that will have against his regime, as they have already indicated from Mercosur that would proceed with the expulsion of Venezuela from that association.

Trump has threatened sanctions, several analysts speculate that these would be the suspension of purchase of petroleum to PDVSA or not allow the use of the Venezuelan oil of the US currency for its operations. So far it is a threat. In the foreign market have been taken seriously and desperately dispose of the Venezuelan securities because the impact that would have such a measure would undoubtedly produce the debt default this same 2017. Even local operators, manifest with their movements in foreign exchange, Total mistrust in the proposal of the constituent assembly, since Maduro announced it, the parallel dollar jumped from Bs 4,000 to Bs 8,500.

If the sanctions that speculate analysts are carried out, the effect in Venezuela would be devastating, producing widespread chaos. The first is that by suspending the shipment of components to make gasoline in the country, that would paralyze the refinery industry and the shortage of fuel would be widespread. The lack of gasoline would hit the smuggling mafias with a lot of force, which handle at least 8 billion dollars a year in gasoline to Colombia, which in turn helps the neighboring country to fuel the Venezuelan food, after the incentive Of cheap gasoline, the price of food brought from the other side of the border would shoot without a definite ceiling or would be paralyzed, since without gasoline, the Colombians would not receive more bolívares for those operations. The islands of the Caribbean would suffer an immediate impact, when the oil shipment was suspended, as well as the island of Cuba. Venezuelan and PDVSA debt holders would stop charging interest because the declaration of default would occur in the event of a hypothetical embargo. Without adding, the effects on the Venezuelan banks, which already faces two problems of gains against inflation. 7/24/2017

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