"Unfortunately, A Bleak Future For Venezuelans"

"Yesterday I saw a tweet that I knew was wrong stating that American Airlines had stopped selling tickets in both local currency and dollars, which sort of implied the airline was leaving Venezuela.

...both my travel agent in Caracas and American Airlines in the US had called me to tell me that the airline had opened for sale tickets in US$ until the end of July.

...somehow people think that the Government is not paying airlines because it does not care...

...the airlines have been naive in thinking they would be paid eventually. And Venezuelans have yet to face the reality that, much like Greeks three years ago, the time is coming to pay for the errors of the Government of the past few years. The cheap travel, the Cadivi subsidies, all subsidies, have to be paid down the line with expensive travel costs and no subsidies.
There is simply no money to pay the airlines.

Or the pharmaceutical companies, or the food companies, or the oil service companies…

...the President of the Venezuelan Airline Association (ALAV) said “The debt with the airlines is more than the operating international reserves of the country”

That simple statement summarizes the problem quite clearly, how can the Government pay its debts, when all of its operating (Not liquid, operating!) international reserves are not enough to pay the debt with the airlines?

But think about it, the Government also owes the pharmaceutical sector US$ 4 billion, and more billions here and there. And the days go by and it does not pay any of it (The debts actually increase).

Because there is no money to pay the debts.

The Government keeps trying to stretch it. But at some point, it will have to do something about it. It will have to stop subsides to Petrocaribe and Cuba, or not pay external debt, or devalue, or increase the price of gas, or some of the above or all of the above.

...if the Government is not paying either of them, it is because it does not have the money for either of them. Period. It is not even trying to choose one sector over the other, it is paying none of the debts.

...the longer the Government tries to stretch it, the worse it will be in the end.

The numbers just don’t add up.

Unfortunately, the future is bleak for Venezuelans, unless oil dramatically jumps up.

Adjust accordingly."

http://devilsexcrement.com/2014/05/24/unfortunately-a-bleak-future-for-venezuelans/