Skip to comments.Venezuela pegging its economic recovery to a cryptocurrency thatís widely considered a scam
Posted on 08/20/2018 10:09:35 AM PDT by NRx
Venezuela is doing something completely unprecedented. Some even say illegal.
As part of an attempt to stop skyrocketing inflation, the country is issuing a new fiat currency called the "sovereign bolivar," which will be backed by a cryptocurrency. But that cryptocurrency, called the "petro," does not trade, and Venezuela's own parliament says it's being illegally used to mortgage the nation's cash-strapped oil reserves.
"This is a smoke-and-mirrors operation typical of Venezuela I'll believe it when I see it," said Steve Hanke, professor of applied economics at Johns Hopkins University and one of the world's leading experts on hyperinflation. "The problem with the petro is it's a scam, it doesn't even trade."
In February, President Nicolas Maduro unveiled the oil-backed "petro" digital currency as a means to raise cash amid an economic meltdown and economic sanctions. Maduro said each petro token, which is not in circulation yet, would be backed by a barrel of the state's national petroleum. He also said about 100 million petro tokens would be issued estimated to be worth around $6 billion.
Crypto rating site ICOindex.com, which rates initial coin offerings, labeled the petro "scam status." The site evaluates coins based on their white papers, and said while petro promised to be backed up by oil resources, "the technology and mechanisms to do so are not adequately explained." Another site, ICObench, gives it a 1.6 out of 5 stars.
(Excerpt) Read more at cnbc.com ...
Maduro said each petro token, which is not in circulation yet, would be backed by a barrel of the state’s national petroleum. He also said about 100 million petro tokens would be issued estimated to be worth around $6 billion.
Isn’t Maduro’s word good enough? Won’t the NYTimes vouch for a fellow crooked socialist?
I’m investing every penny of the money I’m getting from that Nigerian prince in petros. Gonna be rich...
There are only two eventual outcomes of socialism. Either you are poverty stricken like everyone else or you are dead.
LOL! So true!
Venezuela is dropping the last 5 zeros (00,000) from it’s money today.
Backed by a barrel of oil??? That gets burned up? Gold it ain’t.
When cannibalism becomes a common occurrence, they’ll beg for the “imperialists” to come in and “exploit” them again. Venezuela was once a beautiful country.
Via con diablo Maduro.
So, Ocasio-Cortez’s socialist paradise, Venezuela, is dropping 5 zeros(00,000) from the end of it’s money today.
This must be what she thinks will cure what socialist experiments worldwide have been doing wrong.
If a socialist country had a dysentery epidemic, they’d have a sh!t shortage. In the Sahara, they’d have a sand shortage. Venezuela has an ocean of oil, and they can’t figure out how to make ends meet? Either drill and sell it yourself, or lease it to a capitalist exploiter who’ll do it for you, on favorable terms to you. But noooooo!
Of all the MSM outlets, CNBC is the only one that actually reports on stories like this fairly and accurately. It is one of the few to even mention the word Socialism in their Venezuela stories. It probably has to do with their reporters interacting on a daily basis with people who are actually grounded in reality. It’s hard to believe that they and MSNBC have the same parent company and that they are still allowed to report accurately.
Smell the desperation.
He's dropping 5 zeros from the banknotes, so it would take 20 bolivars to buy one cup of coffee. He's pegging the new banknote to the petro, a digital "currency" that he is creating.
Still bad. Very bad.
What is the petro pegged to? The bolivar? The dollar? If so, then I can peg these Monopoly dollars to the dollar, and go on a spending spree.
Also, the current currency is losing its value at light speed. Nobody says why. Government printing money? Extreme shortages of goods? (How would that work?)
None of this will work.
Sounds like a plan where Maduro can walk away with Venezuela’s whole economy, when things finally fall down.
Venezuelan oil can’t just be pumped and used. It’s dirty stuff that needs steps to clean. When Chavez confiscated the oil industry, the US companies overseeing extraction and refining disappeared, leaving a processing vacuum that was never filled.
This oil-for-bitcoin thing smells as sure as a 90-yard field goal attempt.
—— Extreme shortages of goods?——
In the course Inflation 101 taken by every prince that would be king, he learns that the way to solve his debt problems is to inflate the currency
One definition of inflation is too much money chasing too few goods.
In venezuela the divide by 0 calculation yields infinity.
That is no goods being chased by all the currency yields an inflation rate of infinity.
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