Reuters reports Goldman Sachs bought $2 billion of bonds in Venezuela’s oil company.
In a liquidity crunch, bonds were sold through a European banking syndicate for 30 cents on the dollar.
It appears that communism has wrecked Venezuela’s economy and capitalists are there to bail it out, providing liquidity in a squeeze.
The squeeze plays out from falling oil prices.
Going back to 2009, remember, “peak oil” was in command of prices. Goldman Sachs, for example, was a key player in oil-futures contracts that drove up the price of oil. The high price (which meant that “liar loans” had less income to pay the mortgage against falling wages and salaries) was being attributed to peak oil (limited supply), but it was actually the product of financial engineering (derivative devices).
Causal identity of the squeeze is artfully narrated to align with the failure of communism. The actual squeeze, however, really aligns with the success of capitalism to “make markets.”
Markets are made so that the squeeze can happen.
Whether you are communist or schmomunist, the objective is to consolidate the value of real assets (like the natural resources beneath the surface of the land) into a financial swap. Ownership of useful value (measurable currency) is then within the four corners of a contractual, financial obligation, referred to as the bonding authority, which is directly aligned with being subordinated to the debt — i.e., slavery by another name, described by Objectivist, Ayn-Rand bankers as something that “just happens” (the squeeze) by natural design, existing on demand.
(See other articles by griffithlighton on the use of options and futures to pre-dict commodity prices, and the use of derivative devices to actualize subordination to the debt.)