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Showing Original Post only (View all)Traders Are 'Scared As Hell' Of What's Happening In Venezuela [View all]
Source: Business Insider
Venezuelan investors are abandoning ship en masse after the government indicated that it would not take immediate measures to stop the country from sinking deeper into chaos.
"I am scared as hell," one Latin American bond trader said. "Default [is] likely within 12 months; the oil price collapse [is] just adding to a completely dysfunctional political and financial situation."
This week the Venezuelan government reiterated that it would not devalue its currency, giving it more bolivars for every dollar. It does not want to do that because the country already has the highest inflation rate in the world, at 64%. The official exchange rate is 6.3 bolivars per dollar, but the black-market rate sits at 113.62 bolivars to the dollar.
In the meantime, Venezuela is already suffering from food shortages. A lot of that food along with other household goods is imported, and without the cash from oil, the government will not be able to subsidize those imports, according to a report by the research firm Stratfor.
Read more: http://www.businessinsider.com/traders-scared-as-hell-of-venezuela-2014-11
I can't see any outcome for Venezuela other than defaulting.