Venezuela In Chaos After Maduro Announces Massive 95% Devaluation, New FX Rate Tied To Cryptocurrency

Chaos and confusion erupted across Venezuela, and most stores were shuttered on Saturday, after president Nicolas Maduro announced that the government would enact a massive currency devaluation, implement a new minimum wage, hike taxes, and also raise gasoline prices for most citizens even as the country struggles with the greatest hyperinflation on record, surpassing even that of the Weimar Republic.

As a result of the enacted actions, the new version of the bolivar will be pegged to the value of the state cryptocurrency, the etro, which according to Bloomberg amounts to a 95% devaluation of the official rate, and will trade in line with where the black market was; the government will also raise the minimum wage more than 3,000 percent, which works out to about $30 a month.

Maduro said the new currency, set to enter circulation on Monday, will be called the "sovereign bolivar" and will be based on the petro, which is valued at $60 or 3,600 sovereign bolivars, after the redenomination planned for August 20 slashes five zeroes off the national currency. The minimum wage will be set at half that, 1,800 sovereign bolivars. The government would cover the minimum wage increase at small and medium-size companies for 90 days, Maduro added. It was not clear what happens after.

"They've dollarized our prices. I am petrolizing salaries and petrolizing prices," Maduro explained in a Friday televised address. "We are going to convert the petro into the reference that pegs the entire economy's movements."

In other words, for the first time ever, an oil-linked cryptocurrency effectively replaces the sovereign currency. As a result the petro, which will fluctuate dramatically, will be used to set prices for goods. The package of measures combine the necessary with the baffling, Luis Vicente Leon, president of the Caracas-based pollster Datanalisis, said in a Twitter post on Friday.

“The government has recognized the need to anchor the economy to an external variable outside of its control, such as the international price of oil. A wise decision, but it does so by hiding it in a vehicle that suffers from lack of confidence and viability, such as the Petro,” Leon said.

"You won’t find the IMF’s claws or ill-gotten prescriptions here,” Maduro said, although after years of socialist torment, it is not clear if Venezuela's ordinary citizens would not have opted for that alternative. Maduro also said that "no experts were involved who do not feel the clamor of the people"… Just dictators.

Maduro also said he intends to create a unified exchange rate across the country. The new petro-to-dollar-to-bolivar rate would bring the official price of one US dollar to six million (or 60 post-redenomination), which is about the same as the current black market exchange rate and about 25 times worse than the official rate.

To implement the bizarre plan, information Minister Jorge Rodriguez said Saturday the government will open 300 currency exchange kiosks in hotels, airports and shopping malls as part of a bid to supersede the country’s black market. Maduro said Friday that the central bank will increase the frequency of weekly foreign exchange auctions to three and eventually five.

Speaking to Bloomberg, Henkel Garcia, director of the Caracas consultancy Econometrica, said the announcements amounted to a head-scratcher. “This series of measures is a mix of incoherent and contradictory ideas. It is a worrying contraption that generates a lot of uncertainty about how it will be executed.”

Cont..

https://www.zerohedge.com/news/2018-08-19/venezuela-chaos-after-maduro-announces-massive-95-devaluation-new-fx-rate-tied

Trump adviser floats formal review of security clearances for former officials

President Donald Trump's National Security Adviser John Bolton floated the possibility of reviewing longstanding policy of maintaining security clearances of former government officials.

In the wake of Trump's revoking the clearance of former CIA Director John Brennan, Bolton told ABC News' “This Week” Co-Anchor and Global Affairs Correspondent Martha Raddatz in an exclusive interview Sunday that he doesn't see "anything wrong" with the possibility of reviewing whether former officials should have access to classified information.

“I think it's certainly appropriate in a time when we're seeing what I believe are unprecedented leaks of highly classified information to look at the question of how many people have clearances, how many people receive this very sensitive information, both inside the government and in the case of former officials,” Bolton said. “I don't see that there would be anything wrong if it were determined to go that way to review the policies about former officials having clearances.”

The national security adviser, who previously served as U.N. ambassador under President George W. Bush, said it may be appropriate at times for former officials to retain their clearances, citing his own time out of government when he was a member of a board of directors of a company that did classified work for the government.

“It was felt important that some of the directors be able to access that information,” Bolton said. He added that at other times, he was a civilian and his clearance was “dormant.”

If former officials are found to be sharing classified information, their security clearances can be revoked.

On Wednesday, when White House Press Secretary Sarah Sanders read a statement from the president in the White House Briefing Room announcing his decision, Sanders said Trump was revoking the clearance because of "risks posed by (Brennan’s) erratic conduct and behavior."

"Mr. Brennan’s lying and recent conduct, characterized by increasingly frenzied commentary, is wholly inconsistent with access to the Nation’s most closely held secrets and facilitates the very aim of our adversaries, which is to sow division and chaos," Sanders read from the podium.

In response to the announcement in Wednesday’s press briefing, Brennan tweeted, “This action is part of a broader effort by Mr. Trump to suppress freedom of speech & punish critics. It should gravely worry all Americans, including intelligence professionals, about the cost of speaking out. My principles are worth far more than clearances. I will not relent.”

Since leaving the White House at the start of Trump’s administration, Brennan has been very critical of the president on Twitter and on TV. Brennan has been (https://twitter.com/NBCNewsPR/status/959189340936179712) an MSNBC national security and intelligence analyst since February.

Bolton said that, in his view, during Brennan’s time in the Obama administration, Brennan “and others in the Obama administration were politicizing intelligence.”

“I think that's a very dangerous thing to do,” he said. Bolton was a Fox News contributor during Brennan’s tenure as CIA director.

Raddatz pressed Bolton on whether he had evidence that Brennan shared classified information, which Brennan has denied.

more:

https://abcnews.go.com/amp/Politics/trump-adviser-john-bolton-floats-formal-review-security/story?id=57261704