Before we head Down The Rabbit Hole we have a bit of banking news. BCV (Venezuela Central Bank has reported a fifth month in a row with single digit inflation, the first time since 2015. They have been injecting dollars into the system and it seems to have stemmed the free fall of the bolivar and improved liquidity…Except if you are a customer of the bank BOD. They say they are experiencing liquidity issues and are limiting customer access to 30 bolivars per day. That’s about 6 bucks. We also have the Economy and Finance Ministry reporting the liquidation and cease of operations of banking giant Citi Bank in Venezuela.

 In another money matter it’s been announced that el Petro will be used as a reference the departure tax on domestic flights at Venezuela airports. It reminds me of leaving Venezuela and entering the parking area. There was a sign referencing the parking rate as zero point something, something Petros. I asked everyone in the car if they knew how much that was and nobody had any idea. I asked the parking attendant and he couldn’t tell me how many bolivares to pay. He just said “Give me a dollar.”

 And on the migrant front we have Guatemala expelling 21 Venezuelan migrants headed for the US southern border. This is the first I’ve heard of Guatemala expelling anybody.

 And the UN Office on Drugs and Crime has established a regional headquarters in Columbia to coordinate operations in six South American countries. Venezuela was not listed among them.

 And Tortoise Media has given us the best Maduro nickname in a while…”Caribbean Clingon.” I think they got the spelling wrong but other than that I like it.

 Then we had Stripes doing a piece on former Marine, Matthew Heath, currently detained in Venezuela for over 500 days (approaching two years now) pertaining to the failed coup attempt in May,2020. They say he is a spy and a terrorist and was carrying weapons and explosives at the time of his arrest in Venezuela.Now we don’t know what Matthew Heath’s involvement was,if any, but we’re always a bit skeptical of these types of reports by Venezuelan authorities. Remember the guy that was (allegedly) thrown out of a 10th story window while in custody? Authorities reported that he was so despondent after his apprehension that he threw himself out of the widow of the bathroom on the 10th floor. They had to change their story when it was pointed out that the bathroom in question had no windows.

 That said, here’s what we know. Heath was arrested and there have been accusations of torture and abuse regarding his detention. We also know that six hours after his arrest he was re-arrested, one of those staged for the cameras kinda’ things. While the original arrest report said nothing about weapons or explosives the report following the re-arrest went into great detail regarding the weapons and explosives he allegedly had in the car with him. There’s an issue with that report though. As we’ve previously reported, one of the weapons he supposedly had in his possession at the time of his arrest is too big to fit in the car!

 Then we have the Daily Signal telling us something that we here at TFT have said all along. Nicolas Maduro is undeniably worse than Hugo Chavez was but it was Chavez that set the course for the disaster that is 21st Century Bolivarian Socialism. Chavez just got bailed out by years of record high oil prices (not to mention the $60 billion he borrowed from China).

 And we also have this item which runs contrary to the Chavista narrative of the excellence of the Venezuela healthcare system. A second patient has now died at JM de los Rios Hospital this year while awaiting an organ transplant. The transplant system was shut down a couple of years ago and has yet to be restarted. (note: we didn’t even mention no reliable access to water and electricity at hospitals)

 But no worries folks…Belta (Belarus) tells us they’re sending humanitarian aid to Venezuela.

 Let’s go Down The Rabbit Hole….

 As far as I’ve been able to confirm,as of 2019, there were a little over $300,000 sold, that’s dollars, not Petro units. They have been doing everything they can to generate any kind of sales or use for el Petro. In a highly questionable move in 2019 the government forced el Petro into the retirement system. This was a low blow even for the Chavistas.

 Venezuelan retirees receive their pensions monthly via the “Carnet de la Patria” (the Homeland Card). Don’t get me started.Once again, the Carnet de la Patria will require it’s own chapter as it’s government political and economic extortion. Bolivares are placed into their account which they can then transfer to their personal bank or withdraw cash. Without prior notification the retirees got a surprise. When they received their text message that the deposit had been made it wasn’t in bolivares, it was in Petros! When the uproar commenced as the retirees had no idea what to do with the Petros they were told “Don’t worry, it’s a simple two-step process to convert the Petros to bolivares.” They failed to mention that the “simple process” would delay the arrival of the bolivares into their accounts by a day or two. They also failed to mention that if you were one of those people that would go to Banco Venezuela to conduct your business in person and withdraw cash it would take an extra trip. It was a fiasco that, as far as I know, hasn’t been repeated.

 When Maduro announced the new currency,designated bsS for Bolivar Soberano it was tied to the Petro saying it would provide stability as the Petro was tied to the price of a barrel of oil. Let me see if I’ve got this right. Is this supposed to be like algebra, if A = B and B = C then A =C ?So how did that work out? When the bsS was announced in August,2018 the black market rate (the real value) was 101 bsS / dollar. On June 1st,2019 the rate was 6,000 bsS / dollar and would continue to rise.

 It seemed that good old stable el Petro wouldn’t fare much better. PTR went from 36,000 bsS / PTR  to 196,957 bsS / PTR. It does get curious if you looked at the government website though.It still showed the value of the Petro (PTR) at $60 but if you converted the price in bsS to dollars you would come up with $32.83. So what is it? 60 bucks or less than 33 bucks? Funny thing is…nobody cared.

 Oh, I almost forgot to mention another little eccentricity of el Petro. Unlike other cryptocurrencies like Bitcoin, which I own some of by the way, where you can buy it today and sell it tomorrow, PTR has a 90 day holding period…and guess what… nobody cares!

 Summary : I can understand Maduro’s fascination with cryptocurrency. It’s like they teach in the Red Cross lifeguard certification course. “Drowning people are desperate and will latch on to anything.” I’m sure he thought it  would be creating money out of thin air, just like printing his “Sovereign Bolivares.” Unfortunately for Maduro and the rest of the Chavistas they failed to to understand even the most basic concept of cryptocurrency, lack of centralized control. Once you get past the conceptual level they really didn’t understand anything else about cryptocurrency.

 There has never been a more confusing, convoluted, and contrary initial offering in the history of financial instruments and there have been some doozies. Not surprising when you consider the source but you would think that as they worked their way through the process they might have at least been able to improve the situation a little, clarify the situation a little. You would be wrong.

 The only thing remotely resembling the truth about el Petro is that before the concept phase it was worth ZERO. After it was launched it was worth ZERO. Today it’s worth ZERO. Thankfully, other than the few people that were coerced into buying the $300 K worth of PTR nobody fell for this fraud. Again, from the Washington Post “The Petro might be the most obviously horrible investment ever” !!!!!

 That’s a wrap for this week. We’ll be back Monday with more news and our next Venezuela : Down The Rabbit Hole chapter, “The Real War”….

 Have a great weekend everybody!!!