Financial Times: How Venezuela’s ‘Bolivarian Bourgeoisie’ Profits from Crisis

“The upper echelons of the military are ‘all in’ . . . making money with various schemes,” says Russ Dallen, managing partner of Caracas Capital, a broker. Accusations even stain the ruling family: two nephews of first lady Cilia Flores await sentencing in a New York court on charges of smuggling cocaine into the US.

https://www.ft.com/content/25055a2a-6332-11e7-91a7-502f7ee26895

El Nuevo Herald: Venezuela entra en hiperinflación

venz-money-counterLo que sí está siendo criticado ampliamente, es la decisión de régimen de dar solo tres días para retirar los más de 6,100 millones de billetes de 100 bolívares que circulan en Venezuela, con la amenaza de que estos dejarán de tener valor al término de ese plazo, dijo Russ Dallen, socio gerente de Caracas Capital.

“Eso es demencial”, comentó Dallen desde Miami, en referencia a la incapacidad de la banca venezolana de recoger en taquilla todos los billetes de 100 bolívares que circulan en Venezuela.

“Y lo peor de esto es que la gente de menores ingresos no tiene cuenta bancaria”, y en consecuencia son los que enfrentan los mayores riesgos de perder todo el dinero que poseen, agregó.

CNN: Venezuela’s Currency is in ‘Free Fall’

venezuela-bolivar-november-chartIt’s the latest sign of Venezuela’s extreme economic, political and humanitarian crisis. Sky high food prices — or massive shortages of basic food and medicine — have plagued Venezuelans for years and have gotten worse this year. Inflation in Venezuela is expected to rise 1,660% next year, according to the IMF. The country has been in recession for three years now.

One dollar fetched 1,567 bolivars on November 1. On November 28, a dollar was worth 3,480 bolivars on the widely-used unofficial exchange rate monitored by Dolartoday.com.

“It’s a currency that’s going down the toilet,” says Russ Dallen, managing partner at Caracas Capital Markets, an investing firm in Miami. “No one wants to hold on to something that’s going to be worth 50% less in a month.”

A few factors are behind the bolivar’s most recent plunge. The government has been forced to pump cash into its system because the money in circulation isn’t enough to pay for goods that cost a lot more.

Over the summer, the government was increasing the number of bolivars by 100% a month. But since then, the rate has accelerated: by mid-November, the amount of bolivars in circulation had increased by 130% compared to a year ago, according to central bank statistics.

http://money.cnn.com/2016/11/29/investing/venezuela-worthless-currency/

CNN en Espanol: “Una moneda sin valor” – el bolívar en Venezuela está en caída libre

bolivars-dollarsEl 1 de noviembre un dólar equivalía a 1.567 bolívares, y un mes después, un dólar vale 3.480 bolívares, de acuerdo a la popular página DolarToday.com, que monitorea la tasa no oficial.

“Es una moneda que se está hundiendo”, dice Russ Dallen, socio director de Caracas Capital Markets, una firma de inversiones con base en Miami. “Nadie quiere tener algo que va a valer 50% menos en un mes”.

http://cnnespanol.cnn.com/2016/12/01/una-moneda-sin-valor-el-bolivar-en-venezuela-esta-en-caida-libre/#0

Mata Uang Venezuela Anjlok 55% Selama November

A cashier counts Venezuelan bolivar notes in a state-run supermarket in CaracasNilai tukar USD1 setara dengan 1.567 bolivar pada tanggal 1 November. Namun, pada tanggal 28 November, dolar bernilai 3.480 bolivar pada tingkat resmi pertukaran yang secara luas dipantau oleh Dolartoday.com.

“Tidak ada yang ingin berpegang pada sesuatu yang akan bernilai 50% lebih sedikit dalam satu bulan,” kata Managing Partner di Caracas Capital Markets Russ Dallen.

Beberapa faktor menjadi latar belakang bolivar terjun bebas. Pemerintah telah dipaksa untuk memompa uang tunai ke dalam sistem karena uang yang beredar tidak cukup untuk membayar barang yang harganya lebih banyak.

http://economy.okezone.com/read/2016/11/30/20/1555096/mata-uang-venezuela-anjlok-55-selama-november

El Nuevo Herald: Presagian más escasez en Venezuela para el 2017

Venz ElNeuvHer ShortagesPero incluso PDVSA ha registrado problemas en cancelar las facturas del petróleo liviano que importa para mezclarlo y mejorar el crudo extrapesado que produce en el país, explicó Russell Dallen, socio gerente de Caracas Capital.

La situación ha llegado hasta el extremo que PDVSA se está viendo obligada a pagar por adelantado esos envíos.

“Antes, el pago debía hacerse a la entrega, pero PDVSA no pagaba y el resultado de eso era que los tanqueros quedaban varados frente a la costa de Venezuela esperando semanas y semanas hasta que hicieran el pago. Ahora ya nadie se atreve trabajar así con Venezuela y le exigen que pague por adelantado porque su crédito no es bueno”, dijo Dallen.

El Nuevo Pais: Temen colapso y caos en Venezuela

El Nuevo Pais Portada quoting RMD

 

En la próxima fase Venezuela puede convertirse en algo como Grecia o, peor, como Somalia, sostuvo el experto Russ Dallen en una reunión de expertos sobre Venezuela convocada, la semana pasada, por el almirante Kurt W. Tidd, Jefe del Comando Sur de los Estados Unidos, fuerza militar que cubre la región del Caribe. Dallen es un experto en deuda venezolana consultado por importantes organismos financieros privados.

http://enpaiszeta.com/temen-colapso-caos-venezuela/

Venezuela Ships More Gold to Switzerland in June

It’s official: We are geeks.

We realize we must be some of the few nerds in the world to anticipate with strong coffee and glee the 2:00 am New York time (8:00 am Zurich time) release of the monthly import statistics from the Swiss Federal Customs Administration so that we can cross-reference them with Venezuela Central Bank stats.

Venz Gold to Switzerland Sept 2015 to June 2016

This morning’s Swiss results show that Venezuela shipped $200 million dollars in gold to Switzerland during June.  As we have previously explained, Venezuela and PDVSA have a light interest payment schedule in June and July, with just $80 million due in June and $70 million due in July.

As a result, Central Bank of Venezuela (BCV) head Nelson Merentes made a Gandalfian effort to prevent Venezuela’s International Reserves from passing below $12 billion in June (and the close of the first half of 2016).  As the chart above indicates – the BCV did not sell any gold in May, although Venezuela sold $2.9 billion in the first half of the year and has sold $3.7 billion of their gold reserves since September 2015.

No sooner had the books been closed on the first half of 2016 than Venezuela’s Reserves crashed through that $12 billion line, however.

Venz BCV Reserves 19 July 2016 crop

From the almost $30 billion that the country had when Maduro began running the country in 2013, the country has just $11.826 billion left {To put that in perspective, if Venezuela decided to liquidate and just pay out all the reserves in the BCV equally to its 30 million citizens, each would get less than $400 per person.  In neighboring Colombia – which had to open a humanitarian corridor to feed, clothe and medicate 123,000 Venezuelans this past weekend – Bogota’s $47 billion in reserves would net out at $1,022 per head; Brazil, $1710 per capita; Mexico, $1413 per head.

But Venezuela – with the world’s largest oil reserves — should be more in the proximity of fellow OPEC nations like Algeria ($3,611 per head) or even Saudi Arabia ($18,187.50 per head)}.

At any rate, Venezuela’s reserves will continue down in August as it, PDVSA and Citgo must pay $725 million in interest (You can use our debt calendar here: https://www.scribd.com/doc/286044491/Latinvest-Venezuela-Report-Bond-Debts-20-October-2015 ).

Following that, September requires interest payments of a comparatively modest $310 million, but October comes in at $1.782 billion and November requires $2.946 billion, so more gold sales are coming – if Venezuela and PDVSA are going to pay.

 

LAHT: Venezuela Gold Reserves Fall Below $11 Billion

venz-reserves-23-dec-2015As Venezuela increased its Reserves held by the Central Bank by $1.8 billion in what Latinvest’s Russ Dallen called “the annual end of the year window-dressing”, Dallen also pointed out that Venezuela’s gold reserves had actually fallen below $11 billion in November.

More importantly, says Dallen, the Central Bank quietly released the reserve breakdowns from November, which show that Venezuela’s gold holdings actually fell below $11 billion.

“The reserve figures from November show that Venezuela’s gold holdings fell $120 million to $10.976 billion,” Dallen wrote in a report to Latinvest clients. “That means that Venezuela’s gold holdings have now fallen over $3.5 billion in 2015.”

Venezuela’s reserves had fallen to a 12 year low of $14.583 billion on December 11, the lowest they have been since 2003, notes Dallen.

“In 9 months Venezuela’s reserves fell almost $10 billion from their March high of $24.257 billion,” Dallen said. “And with Venezuela’s mix of heavy oil now fetching under $30 a barrel, with almost $11 billion in foreign debt service next year, inflation over 200%, shortages everywhere, and the country’s institutions set for high intensity political combat, the country is on track for both a financial and civic breakdown.”

http://www.laht.com/article.asp?CategoryId=10717&ArticleId=2402656

Is Venezuela Coming Apart?

venz-coming-apart-panelWhen Russell Dallen, publisher of the Latin American Herald Tribune, asked guests attending the Center for Hemispheric Policy’s discussion on Venezuela this month to open the envelopes taped under their seats for a “special surprise,” no one could miss the irony in his voice. Inside were various denominations of the Venezuelan currency, the bolívar.

As Dallen explained, even as the Venezuelan government officially reports that the exchange rate is 6.3 bolívares to $1 US, the current black market rate is 135 times that, at 850 bolívares to $1. This meant that the “lucky” holder of 10 bolívares had won less than a cent.

All this to say that the current state of Venezuela’s economy is in shambles. In the socialist nation basic staples, such as milk and flour, are hard to find. Inflation is rising while oil production, once the nation’s dominant economic driver, continues to plummet.

Gathered at the Westin Colonnade Hotel in Coral Gables on November 12, Dallen and fellow panelists, Javier Corrales of Amherst College, Beatrice Rangel of AMLA Consulting, and Otto Reich, former U.S. assistant secretary of state for Western Hemisphere Affairs, discussed the current situation in Venezuela and the possible effects of the country’s upcoming parliamentary elections, on December 6. Susan Kaufman Purcell, director of the CHP at the University of Miami, moderate the discussion.

http://news.miami.edu/stories/2015/11/is-venezuela-coming-apart.html

Financial Times: Venezuela Hit by Fears of Hyperinflation and Recession

Handout picture released by the presidential press office showing Venezuelan President Nicolas Maduro as he speaks during a meeting with the Menezuelan military high command in Caracas, on June 3, 2013. AFP PHOTO/PRESIDENCIAFRANCISCO BATISTA/AFP/Getty Images

“The Maduro administration seems to be incapable of acting and is locked in internecine policy and power conflicts that are causing paralysis,” said Russ Dallen, managing partner at Caracas Capital Markets. He doubts whether Venezuela is in hyperinflation territory “yet”.

He says the problem is that the value of the dollar on the currency black market, the result of a decade of strict controls, has more than tripled in the past three years, making imports more expensive.

“If Maduro can find dollars and speed them into the markets, he could turn that situation around. Sadly, the Cubans seem to be running things in the meantime and you end up with Cuban-type solutions like the rationing model in Zulia,” he said.

https://www.ft.com/content/b41fbcb4-d0f1-11e2-be7b-00144feab7de

Washington Post: Maligned Dollar Flourishes in Venezuela

“Essentially, they’ve hit a plateau, and Venezuela’s oil production hasn’t gone up,” said Russell Dallen, head trader at Caracas Capital Markets and a longtime student of Venezuela’s economy. “What that really means is that Venezuela doesn’t have enough dollars to pay for all the things that they need to pay with dollars.”

https://www.washingtonpost.com/world/the_americas/maligned-dollar-flourishes-in-venezuela/2013/05/16/7ce637fc-bdbc-11e2-b537-ab47f0325f7c_story.html?utm_term=.48f4d513efce