Posted on 02/20/2006 9:54:40 AM PST by Racehorse
[According to the former official, the Venezuelan Central Bank (BCV) shows feeble balance of assets. Should the government continue asking money from the bank, the international reserves will deplete gradually and monetary steadiness will be undermined. The only alternative is to reform again the BCV Law]
The Venezuelan Central Bank (BCV) will go into technical bankruptcy in the event of continuing delivering assets to the Government with no valuable consideration, BCV Economic Research ex manager José Guerra cautioned.
"Delivery of USD 6 billion in reserves last year, along with large indebtedness eroded the bank assets, and weakened its capital and source of earnings, i.e. international reserves," he added.
In his opinion, BCV will face subsequent years of losses that can be covered only by an accounting method of assets appraisement to record earnings instead of actual losses.
President Hugo Chávez requested BCV to deliver USD 4 billion of reserves considered as excess. The bank is checking if the action is in the legal context. The BCV Law established a single delivery of USD 6 billion in reserves to the National Development Fund (Fonden) within the second half of 2005. However, it also provides for setting a top in reserves.
[. . .]
. . . "the experience shows that once the Government receives a partial amount of reserves, it immediately asks for another portion. In this way, international reserves will deplete gradually and monetary steadiness will be undermined. The only alternative is to reform again the BCV Law. There is a serious threat of technical bankruptcy at BCV."
(Excerpt) Read more at english.eluniversal.com ...
Chavez wants the bank to write a check their butts can't cash...
Coral Gables-based Commercebank N.A., a unit of Venezuela's financial group Mercantil Servicios Financieros, signed an agreement to buy Florida Savings Bank, which has three branches in Pinecrest, Sunny Isles Beach and Westchester in Miami-Dade County.
The 7-year-old Florida Savings, started in 1999, had assets of $136 million, loans of $114 million and deposits of $118 million as of Dec. 31.
The move comes amid an aggressive expansion by Commercebank, which had assets of $4.1 billion and deposits of $3.4 billion as of Dec.31.
The acquisition is subject to approval by regulators, as well as Florida Savings Bancorp. stockholders. It is to be completed in the second quarter.
Nothing more pathetic than a broke dictator. Hey Chavez, after you run your country in to bankruptcy, you think the Iranians are going to come along with heavy equipment to drill your precious oil? Or will you turn to the "imperialist" west, the only place with refineries to make some use out of the sour sludge you call crude?
Chavez will next employ a standard Marxist tactic of making the currency worthless through hyperinflation. No faster way to destroy the middle class.
If they're left to stew in a depression for about a year, maybe the new dictator will be a little friendlier.
Yeah, lets see how people like you giving 50 million to HAMAS. Those guys won't be happy if your check bounces.
This happened about fifteen years ago... Saddam's Iraq was nearly bankrupt. He had a pretty hefty debt to Kuwait, and he demanded that they cancel it AND give him another loan. When Kuwait told him, in great detail with illustrations and step-by-step instructions, precisely where to shove that idea, he invaded.
--Margaret Thatcher
Nice name you got. "Wall Street" is still one of my favorite movies.
China will bail them out. "Just sign on the dotted line." Pleasure doing business, Hugo.
Yep. Classic case - it is always a critical part of any Marxist takeover when the banks are truly "nationalized" meaning that they come under the rule of the Maximum Leader rather than the law. After this they simply begin to print money. It will be a race between the resulting inflation and the ruination of Venezuela's extraction economy as to which bankrupts the country first.
Chavez figures he can always sell enough oil to offset the increasing thirst of a command economy, and to have his cake and eat it too by using the oil weapon against his whipping boy of the moment, the United States. But oil revenues are finite and the demand of an unproductive economy that is being misused as a political toy is infinite.
He'll need a war. And his neighbors know it.
"Greed is good."
Thanks. I've been using this nickname online since I was like sixteen. I used to have the "Greed is Good" speech memorized, and won a few speech tournaments with it back in high school. : )
Don't hold your breath. Chinese don't necessarily want the extra expense of added shipping charges, nor refinery conversions to use sour crude Venezuela produces.
That rings of 'Fake but Accurate'
Looks like it's time to crank up the ol' printing presses!
Can someone say if this is somehting Mugabe did to Zimbabwe?
Having just finished a book on money laundering, this deal reeks of it.
Hugo has solicited the assistance of Mr Mugabe of Zimbabwe as his economic advisor.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.