Good News! Venezuelan Annual Inflation Slows To … 1,195% (2 Yr Sovereign Yield At 68%, Up From 8.5% in 2014)

While the US Federal Reserve remains puzzled as to why US inflation is so low, President Nicholas Maduro and his Socialist compadres has managed to lower Venezuela’s annual inflation rate from a crippling 1,823% on August 4, 2017 to “only” 1,195% as of August 15, 2017.

Venz 08152017-2

Meanwhile, Venezuela’s 2 year sovereign yield has jumped from around 8.5% when Maduro was first “elected” in April 2014 to almost 70% today.


And Venezuela’s sovereign yield curve has totally flipped from upward sloping when Maduro was first elected (up to 10 years, then downward sloping) to steeply downward sloping today.


Here is Maduro dancing over the reduction in annual inflation.


Venezuela’s 1 YR CDS Hits 9,800 As M2 Money Grows At 384% YoY

Following Venezuela’s economic and monetary meltdown is like watching is like watching the burning train scene from the Tom Cruise flick “War of the Worlds.” Except that Venezuela’s horrors are a reality, not a contrived HG Wells disaster.

The IMF has already warned that Venezuela that is expected to undergo a double dip recession, a 12.5% decline in GDP.

And credit default swaps for 1 year hit 9,800. For comparison, chronic problem nation Greece only has a 1 year CDS of 504.

And their CDS curve AND sovereign yield curve are deeply inverted.

While the US is expanding M2 money at 5.5% YoY,

Venezuela’s M2 money growth is up 384 percent in the last year. And 10% in one week!

And the black market exchange rate? Venezuela’s currency is now worth less than the currency in the game World of Warcraft.

What an unbelievable mess Maduro and his compadres have made.


Venezuela’s 2 Year Sovereign Yield Rises 499 Basis Points To 71.6%

Venezuela’s financial crisis keeps getting worse and worse.

The 2 year sovereign yield for Maduroland rose 499 basis points to 71.6%.


Venezuela’s 10 year yield rose 108 basis points to 31.84%. This is producing a steeply downward sloping sov yield curve.


“But, but, Venezuela is beating Yellen and The Fed in terms of inflation.”



Venezuelan Inflation Hits Either 563% Or 844% (Take Your Pick) – 2Y Yield Now 62%

Federal Reserve Chair Janet Yellen is wishin’ and hopin’ that US inflation somehow climbs to 2%.  Core PCE price growth is currently 1.39% YoY.


Now let’s check out Venezuela. The inflation forecast for Venezuela is 563%.


But Professor Steve Hanke at Johns Hopkins claims that their annual inflation rate is 844.22%.


Venezuela’s 2 year sovereign yield is now a gut-wrenching 62%. And their sovereign yield curve is deeply inverted (who would want to lend to Venezuela and Maduro over 20 years?)


Venezuelan President Nicolas Maduro should go back to driving a bus, his original occupation.


The Heat Is On! Venezuela 10Y Yield Spikes to 30% (2Y Yield at 60%!)

In the immortal words of the late Glenn Frey, “The Heat is on!!”

And its not Arizona-type heat. But protesters outraged at President Nicolas Maduro with threats of a new constitution and staggering inflation. And no toilet paper.

Venezuela’s 10 year sovereign yield just spiked to 30%.

And near 60% at the 2 year mark.

Now that the Dodger’s ace Clayton Kershaw is on injured reserve for a while, here is a possible replacement from Venezuela. I mean, this dude throws fire!

Strange Days! US Treasury Yield Curve Inverts at 6 Months (But Treasury Inflation Indexed Curve Is REALLY Inverted)

Now, here is something you don’t see everyday.

The US Treasury actives curve has inverted at the 6 month mark.

Bur the US Treasury Inflation Indexed Curve is REALLY inverted at 3 years. To near 0%.

This follows of the poor TIPS auction that showed little interest in inflation protection.

Of course, we are waiting for Congress to raise the Federal debt ceiling (which they invariably will) because Congress LOVES to spend your money. The US Federal debt to GDP rose from around 60% in late 2007 to 104% today.

Strange days!

screw the RIAA