You don’t need to be an economist to recognize the sad, self-destructive pattern of Venezuela’s financial collapse. If you’ve ever had a friend or family member gripped by gambling addiction or a drug problem, you’ve seen it. You know where this typically ends.
At the pawnshop.
Last week, Goldman Sachs acquired $2.8 billion worth of bonds issued by Venezuela’s state oil company at just 31 cents on the dollar, paying $865 million for the securities. Now Venezuela is looking even more desperate, offering $5 billion worth of bonds at 20 cents on the dollar through a Chinese brokerage, according to the Wall Street Journal, whose reporters have been tracking the country’s attempts to secure emergency cash.
That is the kind of financing typically available to people with trembling hands trying to negotiate through bulletproof glass. …