Latin America

Venezuela unveils largest-ever bill, worth a few US dollars

"Venezuelans living with hyper-inflation and a scarcity of cash for buying daily goods will soon have the country's largest paper bill circulating in recent history. The country's president announced Wednesday that the new 100,000- bolivar note will hit the streets this week. It will be worth less than $2.50 in U.S. currency in black market dealings. In a nationally broadcast appearance, President Nicolas Maduro held up the new paper bill, while also unveiling a 30 percent boost to the minimum wage. The new denomination is stop-gap measure in an economic plan by Maduro's government aimed at doing away with the need for paper money."

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Ron Paul: Attack Venezuela? Trump Can’t be Serious!

"The White House is becoming the war house and the president seems to see war as a first solution rather than a last resort. His threats of military action against a Venezuela that neither threatens nor could threaten the United States suggests a shocking lack of judgment." Continue reading →

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Maduro: Trump’s ‘imperialist hand’ is behind Venezuelan revolution

"Venezuelan President Nicolas Maduro on Sunday said that his U.S. counterpart, Donald Trump, is deeply involved in 'terrorist' activities and the violence that is unfolding in the South American nation with an eye toward 'taking political control' there. Maduro said on his weekly radio-television show that his country is facing an 'attack by violent forces (...) intolerance and generalized destruction,' and that behind all this turmoil is 'the imperialist hand of Donald Trump.' 'Trump has his hands infected and stuck deeply into this conspiracy and this attack that has as its objective taking political control in Venezuela, recolonizing Venezuela,' Maduro claimed." Continue reading →

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The Venezuelan Crisis Is Due to Economic Ignorance

"The worst part of Venezuela’s tragedy is that it was so obviously predictable. Economists familiar with the work of Ludwig von Mises understood the necessary results of socialist policies. A sound money and freely floating prices provide a society with functioning markets that deliver the goods to the people. The market economy is true populism." Continue reading →

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U.S. bailout places ‘Puerto Rico’s democracy at risk’

"The U.S. Senate is considering a bill called the Puerto Rico Assistance Act of 2015. It offers minor assistance: a temporary reduction in payroll taxes and a 'development fund' of $3 billion. But the real purpose of this bill is the installation of a six-member Financial Control Authority. That authority, if it gets the chance, will rule over Puerto Rico. Completely. What this legislation contemplates is beyond extraordinary; it is essentially the destruction of whatever semblance of genuine democracy currently rules the island. According to the bill, five members will be appointed by the U.S. President. The sixth will be the Secretary of the U.S. Treasury, who will also serve as Chairman." Continue reading →

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Only in Argentina: Where Minus 3% Bond Yields Are All the Rage [2015]

"While the bonds yield minus 3.1 percent, it’s a small price to pay in a country where capital controls have caused multiple black-market exchange rates to proliferate and rampant inflation has eroded the value of peso deposits. Foreign companies, prevented from repatriating dividends because of the controls, are also buying the securities as a hedge against a potential devaluation, which has become more likely as trading partners from Brazil to China weaken their own currencies, said Eduardo Levy-Yeyati, director of economic consultant Elypsis. The government sold the equivalent of $1.1 billion of dollar-linked bonds due in 2017 on Tuesday, the first such sale in nine months." Continue reading →

Continue ReadingOnly in Argentina: Where Minus 3% Bond Yields Are All the Rage [2015]

China Devaluation Is Blow to Cash-Strapped Argentina’s Reserves

"China’s devaluation couldn’t come at a worse time for Argentina. About a quarter of the country’s $33.7 billion of foreign reserves are now denominated in yuan, which suffered its biggest loss since 1994 on Tuesday. The move is eroding the cash Argentina uses to pay its debt and comes as the nation is effectively shut out of overseas bond markets and struggling to defend its slumping peso at home. The country’s yuan holdings have ballooned since it signed an $11 billion currency-swap agreement with the People’s Bank of China in July. In the unregulated market Argentines use to sidestep the government’s currency controls, the peso has sunk 12 percent in the past two months." Continue reading →

Continue ReadingChina Devaluation Is Blow to Cash-Strapped Argentina’s Reserves