Venezuela’s March Toward Default

Mises Wire



It is only a matter of time until Venezuela will default on its foreign debt. After a short peak in 2009, when the country’s foreign exchange reserves stood at over $40 billion, Venezuela has been steadily hemorrhaging its reserves down to $10 billion. In 2016, Venezuela started to sell gold in order to compensate for the loss of its monetary reserves. As a consequence, Venezuela’s gold reserves plunged from over 360 tons down to less than 190 tons. Other than in the case that some foreign power, such as China, for example, would jump in as a lender, Venezuela’s default seems unavoidable 



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