Venezuelan Bonds Are Collapsing, FinMin Denies Devaluation Looming | Zero Hedge.
While talking heads proclaim – incorrectly – that low oil prices are unequivocally good for the US economy, it is very much not the case for oil producers around the world. Most notably, Venezuela – which ‘needs’ oil prices above $100 to maintain its socialist utopia – and currently ranks at a lowly 100th on the world’s prosperity index, is in grave trouble if this trend continues. Venezuelan bonds plunged to new record lows today as oil prices hit fresh cycle lows, strongly suggesting default or currency devaluation is imminent. However, as is usual (think Mexico) Finance Minister Rodolfo Marco Torres ruled out devaluation even as oil price drop exacerbates country’s finances. As one analyst noted, “there’s broad understanding that in the absence of any corrective policy measures that these guys are going to be in serious trouble.” It appears they already are.
As we noted previously, While Saudi Arabia tests the mettle of North American producers, it could be Venezuela that is the most vulnerable.(via Nick Cunningham of OilPrice.com)
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