The Petro is a Scam — Here’s Why
Pomp’s newsletter this morning prompted me to write this, as I feel that there is a lot of confusion around the Petro, even around the people that should know better. This is my attempt to clean up the narrative around it. I guess it is hard to understand the level of deceit that the Venezuelan regime is capable of unless you have lived through it. That said — let’s explore why the Petro is a scam.
The Venezuelan regime (specifically, Maduro) has sustained a continued attack on its people by printing the Bolivars that it uses to promote “more social programs” and “pay increased salaries.” The world bank recently reported Venezuelan inflation reached 500,000% in September of this year. It is important to note that in most countries, there is a veil of independence in their central banks. This is not the case in Venezuela. The regime effectively controls every single organism that should be independent. From the electoral council, to the central bank, to the supreme court. There is really no one else to blame.
The regime’s complete disregard for human rights has been the focus of many conversations at the OAS, UN, and pretty much every other inter-government body over the last 2 years. It is very hard to stop a rogue government that systematically dismantled the country’s electoral system. As an example, the last election was called — not to consult whether the country wanted to re-write the constitution, but to select who within the regime would re-write it. The massive attempts to stop the election were met with weapons, and despite the boycotting of more than 60% of the country’s voters, the vote went ahead and the government gained “super-powers” while it is being re-drafted.
That criminal act in particular would ignite a wave of sanctions to prevent the government from accessing international funds from “like-minded” political partners (primarily Russia and China). They had consistently bailed out the regime because of their sunk investments in the country that would likely not be honoured by a new, reputable government.
And so, this brings us to the Petro. The Petro is nothing but an attempt to suck in valuable currency from clueless believers overseas. To start, it rests on the beacon of justice that is the Venezuelan legal system — good luck winning a case against the regime. Further to that, those of us that read the legal document through which the Venezuelan Petro legally came to be, have been screaming to the world to READ THE FINE PRINT.
As per the document below, the Venezuelan Petro will be redeemable to the Venezuelan Government, for a barrel of oil or “any other commodity that the Venezuelan regime deems fit.”
To summarize, to believe in the Petro you have to believe in Venezuela’s rogue regime, the Venezuelan legal system, and the ability for them to deliver on what it has not been able to do for 20 years. If you still think this is an attempt to increase cryptocurrency adoption in the developing world, I commend you and suggest that you go visit Venezuela for yourself.