Venezuela’s debt

From 2007 to 2014, China lent Venezuela a wholesome $63 billion. A decade ago, Venezuela’s Petroleos de Venezuela (PDVSA) – the Venezuelan state-owned oil and gas company – entered into an oil-for-loans deal with China’s state-run China National Petroleum Corporation (CNPC).

Under the agreement, Venezuela borrowed the amount from China and “agreed to pay back in crude and fuel deliveries to state-run Chinese firms”.

Lo and behold, in 2014, the decade-long oil boom ended.

h/t Dr. J

  • Drunk_by_Noon

    China never expected to be paid back.
    This is their wedge of entry, much like how the mafia takes of a business that is in debt to them.
    The people of Venezuela will soon find out that they now owned by China.
    Such are the wages of socialism, enslavement.

    • if you’re inclined to gamble, sounds like a good short-term investment. Apparently Venezuela’s bond market is booming. Bonds are popular in Latin America especially short-term — people invest for three or six months (max two years) then redeem and collect the interest which can be huge. Sometimes 30%. And in this case they have the Chinese propping it up.

      But I’m not a gambler.

      • Norman_In_New_York

        It looks as sound to me as a 2007 investment in mortgage-backed derivatives with an AAA rating by Standard and Poor’s.

      • Drunk_by_Noon

        You assume that it’s an honestly run game, but non-western foreign financial markets rarely are.
        If you are not Chinese or Venezuelan, you will lose your money.

        • ditto. I edited and mentioned “kleptocracy”. Plus the payback will be in local currency — which is worthless in places like Venezuela. Maybe that’s where Chinese “currency manipulation” comes in.

          But in other parts of Latin America I wouldn’t have any problem trusting their bond market, eg Costa Rica etc.