I sent this to Chris Powell, GATA, and he asked, what about the “convertibility”?
Apparently, Venezuelan President Madura is following China’s lead, but
instead of a subtle rollout over time as to not cause some kind of
market shake-up, he has decided that now is as good a time as any to
announce the creation of a new digital currency: the Petro, backed by
Venezuela’s gold, oil and diamond reserves.
Venezuela
is creating a digital currency to combat a financial blockade by the
United States, President Nicolas Maduro announced Sunday.
The
Petro will be backed by Venezuela’s oil and gas reserves and its gold
and diamond holdings, the president said in his weekly television
program.
“This
is going to allow us to move toward new forms of international
financing for the country’s economic and social development,” the
president said.
The
government also announced the creation of a “blockchain observatory” — a
software platform for buying and selling virtual currency.
Although the president did not offer many details, analysts such as Henkel Garcia see the possibility of success as limited.
“You
can build it, but trust, acceptance and use is what will determine the
cryptocurrency’s success. For me, it will be quite limited. The bolivar
is is also backed by reserves and has no strength,” Garcia, director of
consultancy Econometrica.
“Confidence
in a country is going to depend on the levels of production and the
wealth it generates. For example, people trust the dollar for the levels
of wealth associated with it,” he said.
The
announcement comes as Venezuela faces acute financing problems after
creditors and ratings agencies declared the government and state-run oil
firm PDVSA to be in partial default for missing interest and principle
payments on bonds.
Source
The unintended consequences of U.S. sanctions are
beginning to come home to roost. We have been reporting Putin’s
frustration and elation regarding the sanctions against Russia, but now
we see what can happen when dealing with someone without the diplomatic
skills of a statesman.
Maduro
blames sanctions imposed by the United States in August barring
American citizens and companies from buying any new Venezuelan
government or PDVSA bonds.
Venezuela
is mired in a deep economic crisis triggered mainly by a fall in crude
oil prices and a drop in oil production. Petroleum is its main source of
hard currency.
Over the past year, the Venezuelan bolivar has plummeted 95.5 percent against the dollar on the black market.
Virtual currency is not new for Venezuela — considered by specialists a haven for bitcoin production with minimal costs.Source
The next question is the play against bitcoin and
cryptocurrencies. Will TriEvil use this situation to launch more
sophisticated sanctions, taxes and regulations against cryptocurrencies
and bitcoin in particular?
It
is estimated that tens of thousands of people mine bitcoin to protect
themselves from inflation — set to surpass 2,300 percent in 2018 — by
exchanging earnings for dollars or more bitcoin.
In
Venezuela, a the law does not expressly prohibit mining bitcoin —
experts say officials are involved — but the authorities persecute those
who do it for power theft.
Source
Not sure that anyone was expecting this but it is
not surprising as the world has been showing deep concern regarding the
Federal Reserve Note and the abuse the Untied States government has
foisted upon the recipients of world reserve currency. People, in
general, will take abuse only for so long and once they reach their
breaking point that’s it. It sounds like Venezuela has reached their
breaking point.
WOW!! What will this do to the gold, oil and
diamond market? We should be hearing a lot more about this very shortly
or the sounds of market madness may be drowned out by the sound of bombs
dropping in and around President Madura’s palace.
 
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Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.
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