The Cartel Strikes Back: S&P Downgrades Venezuela to B+
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| The New Revolucion is GOLD |
The first retaliatory shot has been fired in the great gold war.
In another Friday night shocker, S&P tonight downgraded Venezuela's credit rating to B+ from BB-.
Shockingly, S&P actually admited that the reason for the downgrade was Hugo Chavez demanding Venezuela's gold be repatriated from the BOE (kept by JP Morgan and friends)!
S&P "expressed concern" that Venezuela's gold will no longer be held at The Morgue.
Bwahahaha!
Standard & Poor's on Friday downgraded Venezuela's credit ratings as it implemented a new methodology more heavily focused on political risk—a key weakness in the oil-producing country.
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Walker and Walker | Getty Images
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Political risk has been a constant issue in Venezuela, where change in economic rules and nationalization of companies are common. Uncertainty about the health of President Hugo Chavez, who had surgery in Cuba earlier this summer to remove a cancerous tumor followed by chemotherapy treatment, has added to those risks, S&P said in a statement.
"In our opinion, changing and arbitrary laws, price and exchange controls, and other distorting and unpredictable economic measures have undermined private-sector investment and hurt productivity, weakening Venezuela's domestic economy," S&P analyst Roberto Sifon Arevalo wrote in a report.
Venezuela's vast oil and gas reserves "somewhat" offset the policy uncertainty, S&P said. The country posts steady current account surpluses which, combined with strict capital controls, result in positive net asset positions.
However, S&P expressed concern about the actual level of Venezuela's gold and foreign exchange reserves after reports that the country plans to repatriate them.
"When you have the reserves held abroad, you do have some level of confidence," Arevalo told Reuters in an interview. "That is not going to be the case anymore. They are going to be held at the central bank domestically, then you fall in the same circle of lack of transparency that everything else has in Venezuela."
Replies to This Discussion
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Permalink Reply by Maria De Wind on
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Hmm, let's review: They've got Oil and they've got Gold. Sounds like Venezuela just became the new land of opportunity. The S&P just lost whatever shred of credibility it still had.
The worry is "they might be next Libya" as Libya had exactly the same oil & gold, since Chavez, is not part of the cartel, they will 'create' a reason to 'regime change'
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Permalink Reply by KingKhan on
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S&P lost "all" credibility when they were giving AAA ratings to mortgage backed security funds days before they collapsed and caused the economic disaster. And we cant forget about the 2 trillion dollar mistake they made when downgrading the US credit rating. Oops.
Their credit ratings are a joke.
In terms of Venezuela, I'm sure the US has sent in their jackals and something is brewing.
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Permalink Reply by Jose Villarreal on
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From the looks of it this seems like it is going to be quite a feat. See this article
http://lonerangersilver.wordpress.com/2011/08/20/traders-brace-for-... -
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Permalink Reply by Nikki on
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I was wondering what the blowback would be
http://12160.info/video/chavez-calls-back-venezuelan-gold-interview...
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Permalink Reply by guest_blog on
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