Amid the rubble of a nation in freefall, British medical teams are now treating victims of Venezuela’s earthquake disaster in makeshift hospitals. But make no mistake: this isn’t just a geological event. It’s the latest dividend of a currency in freefall, a government that has forgotten the rules of fiscal gravity, and an economy that has traded productive capital for the hollow promise of socialist utopia.
The panic attacks and fractures are the physical manifestation of a systemic failure. When a country prints its way to hyperinflation, the ground beneath its feet becomes intrinsically unstable. The cost of this bailout?
It won’t be borne by the regime in Caracas. No, those bills will land on the desks of international lenders, and ultimately on the taxpayer. The question for the markets now is: when will the contagion spread?
Because in a globalised financial system, a tremor in one corner can send shockwaves through the entire edifice. Expect volatility. Expect capital flight.
And expect the central bankers to reach for their emergency levers. The cost of this rescue is yet to be priced in.
