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The unemployment rate fell to 3.7%. Trump signals the end of the Petro dollar. When Trump warned Saudi Arabia this was phase I of destroying the entire central bank system.
Venezuela Has Officially Launched Its Oil-Backed Cryptocurrency
Venezuela has officially launched what its President Nicolas Maduro claims is a first state-backed oil-backed cryptocurrency, El Petro, which analysts and experts see as nothing but a scam and another effort to skirt sanctions and mask the inability to overhaul the ailing domestic economy.
Over the past months, Maduro has been touting a new plan for economic recovery, which includes a new policy on gasoline pricing that would raise Venezuela’s ultra-cheap gas pricesfor the first time in two decades. The plan to ease the severe economic crisis also featured a devaluation of the currency and pegging the new bolivars to the Petro.
Maduro claims that the Petro is strengthening his recently announced economic overhaul plan and will “revolutionize” the global crypto economy with a new form of trade, finance, and monetary exchange.
The official public sale of the Petro – which Venezuela say is backed by oil, natural gas, diamonds, and gold—will begin on November 5, Maduro has said.
According to authorities in Venezuela, the “Petro is an instrument to consolidate Venezuela’s economic stability and financial independence, coupled with an ambitious and global vision for the creation of a freer, more balanced and fairer international financial system.”
Just a few months after Maduro first announced the idea of the oil-backed Petro, the U.S. prohibited in March U.S. dealings with any digital currency, coin, or token issued by Venezuela.
Experts and analysts are skeptical that the Venezuelan cryptocurrency is really backed by oil assets and minerals.
“Reaction from the cryptocurrency community has been a mixture of dumbfoundedness and anger,” Alex Tapscott from the Blockchain Research Institute told the BBC.
According to Tapscott, there isn’t any proof at all to back up Venezuela’s claim that each unit of the Petro is backed by oil.
Inflation Currently Running
“There is very little technical information about it,” he told the BBC, adding that the launch of the Petro is eclipsing a more significant development in Venezuelan economy – the trade of Bitcoins in bolivars has soared since the start of the year as people are trying to keep the value of their money amid inflation currently running at 13,860 percent, as per IMF estimates.
PETRO DOLLAR RECYCLING
Petrodollar recycling is the international spending or investment of a country’s revenues from petroleum exports (“petrodollars”). It generally refers to the phenomenon of major petroleum-exporting nations, mainly the OPEC members plus Russia and Norway, earning more money from the export of crude oil than they could efficiently invest in their own economies. The resulting global interdependencies and financial flows, from oil producers back to oil consumers, can reach a scale of hundreds of billions of US dollars per year – including a wide range of transactions in a variety of currencies, some pegged to the US dollar and some not.
These flows are heavily influenced by government-level decisions regarding international investment and aid, with important consequences for both global finance and petroleum politics.
The phenomenon is most pronounced during periods when the price of oil is historically high.The first major petrodollar surge (1974–1981) resulted in more financial complications than the second (2005–2014).