In a rare piece of good news emerging from the chaos of Venezuela's collapse, British rescue teams have pulled a newborn baby alive from the rubble in what markets might call a 'dead cat bounce' a fleeting moment of hope amid the wreckage. The operation, coordinated with local volunteers, saw the infant extracted after 17 hours trapped beneath a collapsed building. While humanitarian hearts warm, the financial pragmatist must ask: what is the cost of this mission?
UK taxpayers are funding these operations through international aid budgets, money that could otherwise be used to shore up our own fading infrastructure. The rescue is a testament to British expertise, but it underscores the moral hazard of foreign entanglements. Venezuela's government has proven itself a sovereign default risk, and we are effectively underwriting its failures.
The Bank of England should take note: there are no easy rescues. The gilt yield on this kind of bailout is negative. Still, for one family, the discount rate on life is zero.
The baby miraculously survived, but Venezuela's credit rating remains in default. The question for Threadneedle Street is how many of these 'social bonds' we can keep buying before our own balance sheet cracks. The infant's cry was a signal of hope but also a reminder that in emerging markets, the only thing that ever rises is the death toll.
British taxpayers should demand full accountability for this expenditure. The baby is alive, but the price of virtue signaling is high, and the market always settles the bill.
