Amid "US Coup", Venezuela Takes Another $5 Billion Loan From China

Tyler Durden's picture

The people of Venezuela can rejoice... not so fast. Amid paranoid-sounding (though not unlikely) rantings about US-created coups (and blaming 'economic' war for his nation's Socialist utopia hyperinflation), it appears President Maduro just got another life-line (or more rope to hang himself). After begging China's leader Xi early in January for moar money (and getting it), China - which is already Venezuela's biggest creditor with over $50 billion loaned since 2007 - as Reuters reports, is said to plan on signing another $5bn loan to Venezuela for "wide-ranging" projects like "mature oil fields." So, it appears China is enabling Maduro to hollow out his economy even more.

 

As Reuters reports,

China is poised to lend Venezuela around $10 billion in coming months, half as part of a bilateral financing deal and the other half for development of oil fields, a senior official at state oil company PDVSAsaid on Thursday.

 

The first $5 billion loan, part of the Joint Chinese-Venezuelan Fund, is due to be signed this month and will be destined for wide-ranging projects in the OPEC country, said the official.

 

The other separate $5 billion loan is set to be clinched in June and will likely stipulate contracting Chinese companies to boost production in PDVSA's mature oil fields, the source added.

 

"China wants to decisively back investments in areas like mature oil fields so that PDVSA can rapidly increase its production," said the source, who asked not to be identified.

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Maybe it's time to stock up on condoms and toilet paper?

*  *  *

Finally, as we noted previously, the thread by which Venezuelan socialism hangs may soon snap...

For many years, the Venezuelan government was able to mask the failures of Hugo Chavez’ “socialist revolution” somewhat with the help of the country’s oil revenues. However, it should be remembered that shortages of basic goods in Venezuela are nothing new; the first press reports appeared about two years ago, when oil prices were still quite high (see also this late 2013 article of ours: “The Hygienically Challenged Crack-Up Boom”). As we quoted from a press report on that occasion, some Marxists – as long as they are members of the ruling class – seem actually not overly worried about scarcity:

 

“Not everyone thinks these shortages spell bad news. Planning Minister Jorge Giordani, an avowed Marxist, famously quipped in 2009 that “socialism has been built based on scarcity.”

 

Of course it was easy to make such quips, callous though they may be, back when the hugely popular Hugo Chavez was still around and able to distribute large oil revenues with both hands. The situation is a lot more difficult for Nicolas Maduro, who is probably slowly but surely getting worried about the potential for a counter-revolution (there has already been intermittent unrest in Caracas – and at the time the bolivar’s black market rate was still 85 to the dollar instead of 185).

 

Russia’s economy is likewise suffering from the decline in oil prices , but its government has a lot more breathing room in terms of debt and foreign exchange reserves and would be able to greatly help its economy merely by getting serious about tackling corruption.

 

Maduro has a much bigger problem, as he would essentially be forced to abandon the very ideology he so wholeheartedly supports if he wants to turn the floundering ship around. He does have one advantage over Putin though: he has very little to lose anymore in terms of his approval ratings. He probably must worry about his party comrades though, many of whom will be reluctant to abandon the late and great Hugo Chavez’ “socialist achievements”. It will be interesting to see how things will play out, in light of Maduro lately adopting steps he would never have taken a year ago. Still, given the government’s debt situation and Venezuela’s monetary statistics, a complete loss of confidence in the currency remains a very real possibility. In other words, the thread by which Venezuelan socialism hangs may soon snap.

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Harbanger's picture

I'm long failed leftist governments having to borrow money to survive.

nmewn's picture

Faaareeeeee! toilet paper & health insurance for everyone!

Vote for Meeeee!

dlmaniac's picture

Another 5B they will not get back from that fraud Latin government

MontgomeryScott's picture

HMMM. Just a thought:

Well, the Chinese have what, 2 TRILLION in U.S. 'securities' laying around without a place to 're-invest'. It's worthless paper, of course (except for the fact that Billary went begging to the Chinese to keep loaning the U.S. money and put up all 'Federal' holdings as collateral, about 3 years ago).

SO...

The Chinese are buying up Venezuela using worthless fedscrips that the American taxpayer is gonna have to pay for (eventually, or SOONER) in land, holdings, etcetera. They (the Chinks; or 'Chinese Communists') have been playing this game for more than 5,000 years, you know. They'll get Venezuela, and make the stoopid Yanquis PAY FOR IT at the same time!

Oh, by the way; FUCK Maduro (that commiesymplant scumbag) for selling his country out like a whore spending all her earnings for a night in Las Vegas. The PLA will OWN his ass because Venezuela won't be able to pay back this (or past) loan(s).

Why do they call Mexicans (and ALL indigenous peoples of South America) 'Latins', anyway? The LATINS were (are) from ITALY.

They don't SPEAK Latin, and they are brown and short and fat (mostly). Is it because they took on the religion of their conquorers, 'Roman Catholiicsm', perhaps? WELL, they like to BREED like rabbits, I guess (and WHY does the religious 'holiday' of EASTER ('ESH-TAR') involve RABBITS that bring EGGS (like rabbits actually LAY eggs, or some bullshit) to celebrate the death and rebirth of the son of the Roman Catholic GODDESS named 'MARY', anyway? Is it because the Roman Catholics decided to sway the stupid 'LATIN' Americans into coming to their 'MASSES' with something that would tittilate them (like FUCKING; akin to domesticated farm animals like RABBITS OR CHICKENS)? Is that why 'Easter Eggs' are made of CHOCOLATE (and the only natural source of chocolate beans is in SOUTH AMERICA)?

I bet most of you never made these tangentical connections.

Maduro's a SICK, TWISTED, DUMB FUCKER. REALLY fucking STUPID. Of course, MOST communist party members are JUST LIKE HIM.

WELL, GEE, 'MONTY', don't hold back now. Tell us all how you REALLY feel...

msamour's picture

Holy Dude!

Here's a Valium. Sit down relax. You are about ready to give yourself a heart attack.

roddy6667's picture

They get it back in farmland and oilfield lease deals.

daveO's picture

More petro Yuan in Yankee's back yard.

Thirst Mutilator's picture

 "Maybe it's time to stock up on condoms and toilet paper?"

 

I thought the Chinese just squat in the bushes...

nmewn's picture

Theres something to that actually.

Had a family (about fiddy of them) move in across the street from us when I was a kid in the city, one of the came out, hiked up her dress and took a piss right there in the yard then just walked back into the house.

Damndest thing I ever saw, I guess the two & a half bathrooms were occupied ;-)

Thirst Mutilator's picture

I wasn't kidding there... [though I got the perfunctory downvotes from CH1, Las Vegas Dave, & iofera, who are 'prowling' these threads at the moment]...

 

It wasn't really meant as disrespect... It's not all that unusual behavior for many of the 1+billion Chinese... [Which, statistically, & by comparison to the entire American population, would make 'squatting in the bushes' more NORMAL than sitting on porcelain toilets that hardly anyone ever cleans afterwards, & which makes 'the bushes' the more sanitary alternative]...

 

Me?

 

Meh ~ I wouldn't be against reserving TOILETS for more CEREMONIAL occasions [like administering 'Swirlies' to anonymous junkers]...

daveO's picture

I knew a guy in the Army who had to pull the mandatory tour in South Korea. Similar stories.

3.7.77's picture

And so China ends up owning Venezuela, bought with US trinket money.

Big Corked Boots's picture

I'm wondering how much printed FRN's it would take to buy a South American colony with high-sulfur oil and a good strategic location. $50bil?

ultimate warrior's picture

Exactly! US prints money from nothing and gives to China. China makes goods and Ships to the U.S. China Gives printed money to Venezuela. Venezuela trades Oil at a depressed price to China.

I guess printing money does work and everyone wins lol

TruthInSunshine's picture

Watch Argentina, Venezuela & Brazil over the immediate term.

Seatbelts. It's gonna' get very, very ugly.

Harbanger's picture

Proof that you can have a financial collapse and not lose your totalitarian state.

jtg's picture

Yes, it will get ugly. The US is pouring all the gasoline it can on the situation.

The US just will not let the rest of the world go its own way. It must be the US way, or the US will kill you.

Oldrepublic's picture

You are right, a wounded  animal is very, very dangerous

Oldrepublic's picture

Whatever  we think of the shortcomings of Rousseff , Maduro or Fernandez we should never fail to applaud their heroic efforts to get out from under the grip of the Imperium

TheReplacement's picture

Why cheer one "socialist" dictator simply because they challenge another?

youngman's picture

You can add Colombia to that list...we are going to hurt to without our oil revenues and all the foreign development money coming in....

Bell's 2 hearted's picture

woot!

 

just what we need ... increased crude production

ted41776's picture

it's all funny money at this point

Bell's 2 hearted's picture

anyone know the skim rate for a pineapple president on $10 billion?

Thirst Mutilator's picture

It's a banana republic... & YES... We have no bananas... [lot's of paper bananas though]...

surf0766's picture

One communist bailing out another communist  .. what's the big deal

TruthInSunshine's picture

China is loaning the money, not the U.S.

Harbanger's picture

Ironically the old commie guard in China is threatened by their new found capitalism.

Yen Cross's picture

 That's incorrect. China has net outflows/ The PBoC is consolidating it's holdings and using RRR and internal lending rates to manage it's economy.

 China is NOT actively lending YUAN. Matter of factly China is internalizing lending, from excess reserves.

ross81's picture

Venezuela, like most of Latin America, would go neither "crazy Socialist" nor "Gringo slave plantation" if Uncle Sam would just butt the fuck out.

Yen Cross's picture

  No más mazorcas de maíz, para limpiar mi culo?

Yen Cross's picture

 Google Translate.

  LMFAO!  Excuse me while I go do some gardening. My apricot trees are blooming and I need to re-pot my bell peppers, that I wintered.

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knukles's picture

Hey Yen!
This Saturday is 10 years.
Booyah!

Yen Cross's picture

   Knuks I'm happy for you. 10 years?   retired, hole-in-one, grandchild, cancer free ?  I'm perplexed....

knukles's picture

Yen, it be all that clean livin', trudgin' along the road of happy destiny.

Best 10 years of my life
Be well, my brother

consider me gone's picture

Congratulations! I'm at nine yrs as of Monday. I forgot until I read your post. Thanks for reminding me.

JustObserving's picture

China lost big in Libya after the Nobel Prize Winner got rid of Gaddafi much to the hilarity of Hillary.  Same thing will happen in Venezuela which has larger oil reserves than Saudi Arabia.  Now if China sends some troops to Venezuela things will get interesting.

Obama failed his coup in Venezuela by Thierry Meyssan http://www.voltairenet.org/article186879.html
Hillary Clinton on Gaddafi: We came, we saw, he died

https://www.youtube.com/watch?v=Fgcd1ghag5Y

Stumpy4516's picture

In the end if they do not commit to engaging militarily then they will lose again.  It will not stop at any locale until it is stopped or it collapses.

China is the competition not Russia.  Russia can only hold it's own, at best.

daveO's picture

Therefore, Russia is the distraction whilst China takes over.

tarabel's picture

 

 

Too bad Greece doesn't have any oil.

Jaspergers's picture

It does, but it doesn't have permission to extract it atm...

Toolshed's picture

Don't they have lots of olive orchards there?

WTFUD's picture

FUCK ME! Soros has taken over Z/H and i demand TRANSPARENCY TYLERS.

STOP FEEDING 19 SHIT ARTICLES ( USSA GDP & OTHER FINANCIAL DIATRIBE ; IT'S WAY PAST THAT ) AND CONCENTRATE ON THE ONE FUCKING ISSUE THAT IS LEADING US TO THE BRINK.

Quality not Quantity.

Like VOTES on important issues passing through CONgress on Christmas Eve someone's SOLD OUT.

The next month or so after Mickey Mouse Elections in UK, Nigeria etc we will see WW111 ( it's begun already ) with a split in countries, regions and communities.

CONTROL is OVER it's Dog eat fucking DOG in every household.

This is such a shitty article and you caught me off-guard. Let me go and check my passport to see if i'm real or just a hologram.

knukles's picture

My dog tastes like chicken

Toolshed's picture

Maybe it's a furry chicken then.

q99x2's picture

Tell him to post photos of all the banking families family members, addresses, phone numbers, emails and social security numbers as well as vehicles, planes, jets, and corporate structure diagrams.