Venezuela will no longer honor its debt. Default next

Venezuela: We can't pay our debts anymore

Venezuelan President Nicolas Maduro finally admitted his government can't afford to pay all of its mounting bills.

Maduro said in a televised speech Thursday that Venezuela and its state-run oil company, PDVSA, will seek to restructure their debt payments.

The oil company made a $1.1 billion payment on Thursday, he said, a sizable amount for a country with only $10 billion left in the bank. "But after this payment, starting today, I decree a refinancing and a restructuring of the external debt," Maduro told the country.

Venezuela is already deep into a humanitarian crisis, with people suffering from food and medical shortages. Many can't afford to buy basic items because prices are skyrocketing faster than wages. The country's currency, the bolivar, is worth less than a tenth of a U.S. penny.

If Maduro's government can't reach a new agreement with bondholders over the debt restructuring -- which often means trying to pay less money -- it will end up defaulting.

That would trigger a potentially ugly series of events.

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https://www.msn.com/en-us/news/world/venezuela-we-cant-pay-our-debts-anymore/ar-AAunHx5?li=BBnbcA1#image=1

The problem Maduro faces is, it takes two willing parties to renegotiate and restructure debt. Bond holders, mostly Americans are forbidden from dealing with Chavistas, and anyone else who wants to negotiate with Venezuela risks losing access to American markets. Factor in that Maduro no longer has access to US dollars for his oil (his Bolivars are worthless), and it is safe to assume that Christmas is going to be pretty sparse in Venezuela this year.