We’ll go Down The Rabbit Hole in a bit but first…Taipei Times reports that indigenous leaders and environmental activists, meeting in Belem, Brazil, called for “the rich world” to ban illegally mined gold.

 We’ve covered the environmental devastation caused by Nicolas Maduro’s “Mining Arc” numerous times including the deforestation, the poisoning of rivers, etc. in the Amazon region. We already know that gold mining, primarily illegal mining, is the primary driver of deforestation in Venezuela.

 The Amazon Network of Georeferenced Socio-Environmental Information gives a little “bigger picture” view of the problem. Their report shows 4,472 illegal mining locations in the Amazon region, Half are in Brazil and a third are in Venezuela.

 They affect more than 17% of protected natural areas in the region and 10% of indigenous territories. In Roraima, the Brazil/Venezuela border area, the amount of land deforested due to illegal mining is up 54% for the last year.

 Maybe some of these “rich countries” should stop worrying so much about the environmental impact of cattle-produced methane and pay more attention to those buying illegal gold that’s killing the rain forest and destroying the lives of indigenous peoples?

 “Blood Diamonds” comes to mind but illegal gold mining doesn’t have a snappy catch phrase.

 And Reuters reports that Venezuela is making a last-ditch attempt to limit the number of companies that can participate in a court-ordered auction of Citgo Petroleum’s shares, appealing to the US Supreme Court to overturn a lower court ruling.

 About two dozen companies are seeking to have claims satisfied with about $20 billion in claims pending. The petition is a long-shot with about 90% of such claims being denied (and Venezuela’s case is exceedingly weak).

 The Third Circuit Court upheld a lower court ruling that PDVSA (Venezuela government-owned oil company) is the Venezuela government’s “alter ego”, which is obviously true, and a Delaware court has set the auction of Citgo shares, owned by PDVSA, to begin in October.

 As we’ve said before, Citgo’s value is estimated at between $10 billion – $12 billion so Citgo, as we’ve known it, will cease to exist

 Now, lets head Down The Rabbit Hole…

 Chapter 6/ continued…

 …Their concept to solve the credibility problem was actually not that bad an idea. It was common knowledge that Venezuela had (has) the largest proven oil reserves in the world. If they could leverage that as backing for their new “el Petro” maybe they could generate some interest. As with all things Chavismo- related the devil would be in the details.

 In their FIRST white paper, the document containing the concept and goals of the project, “el Petro” would be backed by their unmatched oil reserves (to get around that nasty little credibility issue). Each Petro coin (they initially issued 100 million coins) would be backed by a barrel of oil  and the price would be the same as said barrel, originally set at $60. Sounds good right? Sort of their version of when sovereign currencies still had the gold standard. Details to follow…?

 The usual suspects created quite a buzz. Supportive governments and individuals were quick to pose the question, “Is this the way of the future?”, just as they had all rushed to proclaim 21st Century Bolivarian Socialism as the way of the future, and were now desperately reaching for something positive in the debacle that was Chavismo. It wouldn’t take long for reality to set in although Maduro and his supporters would continue to hype it for years to come.

 Reality comes into play when real people have to invest real money in something. The cryptocurrency community had a lot of questions for Chavismo. The first was “What does backed by a barrel of oil mean?” The answer will surprise absolutely nobody. Lets say you had 100,000 Petros and wanted to sell them but there were no buyers. Could you send a tanker to Venezuela to pick up your 100,000 barrels of oil? Well…no. The barrels of oil backing “el Petro” were designated to come from a couple of blocks in an oil field that had yet to be developed. It was really a glorified IOU.

 Well, uhh,OK, lets say I was still willing to buy some Petros. What blockchain technology is supporting “el Petro”? Originally “el Petro” was to be supported by the Ethereum platform, which was well known in the cryptocurrency community. It seems someone forgot to tell Ethereum. Then they said they would use the NEM platform. NEM wasn’t at the top of the list like Ethereum but they did exist. Well, NEM didn’t get the memo. As the first of several “official launch” dates approached The Chavistas announced the creation of their own platform that would support “el Petro”. Funny thing is, when you went to their website for details about the platform it looked like someone just copied and pasted details of the DASH cryptocurrency platform. Hmm… If you wanted to actually use the platform you could go to “the manual” to find out how to buy PTR, the symbol for “el Petro”. The only problem was that “the manual” was just a cover page that said “Manual”. Hmmm…

 What about ratings agencies or organizations? Maybe they can shed some light on this if I’m still undaunted in my quest to own PTR? I mean, after all, the government has already announced in their “pre-sale” that they had sold $735 million…No wait…they upped it to $3.3 billion…No wait…It’s actually $5 billion. I don’t want to let an opportunity pass me by, do I? (Ever heard the term “FOMO”, fear of missing out?) It turns out that none of the above claims could be verified as sales…shocker! The top four cryptocurrency ratings organizations said it was a scam while the others simply refused to issue a rating. The Washington Post did, however have something to say. “The Petro might be the most obviously horrible investment ever.” It’s also telling that the Chavistas wouldn’t accept their own currency for purchases of PTR, although they would modify that stance when Maduro announced his economic overhaul and the introduction of the “Sovereign Bolivar”.

 More tomorrow….