The first retaliatory shot has been fired in the great gold war.
In another Friday night shocker, S&P tonight downgraded Venezuela's credit rating to B+ from BB-.
Shockingly, S&P actually admitted that the reason for the downgrade was Hugo Chavez demanding Venezuela's gold be repatriated from the Bank of England (kept by JP Morgan and friends)!
S&P "expressed concern" that Venezuela's gold will no longer be held at The Morgue.
Bwahahaha!
Standard & Poor's on Friday downgraded Venezuela's credit ratings as it implemented a new methodology more heavily focused on political risk - a key weakness in the oil-producing country.
S&P cut Venezuela's long-term sovereign rating to B-plus from BB-minus. The outlook on the new rating is stable. The agency's new methodology was published on June 30, a little more than a month before it invoked political concerns to downgrade U.S. credit ratings.
Political risk has been a constant issue in Venezuela, where change in economic rules and nationalization of companies are common. Uncertainty about the health of President Hugo Chavez, who had surgery in Cuba earlier this summer to remove a cancerous tumor followed by chemotherapy treatment, has added to those risks, S&P said in a statement.
"In our opinion, changing and arbitrary laws, price and exchange controls, and other distorting and unpredictable economic measures have undermined private-sector investment and hurt productivity, weakening Venezuela's domestic economy," S&P analyst Roberto Sifon Arevalo wrote in a report.
Venezuela's vast oil and gas reserves "somewhat" offset the policy uncertainty, S&P said. The country posts steady current account surpluses which, combined with strict capital controls, result in positive net asset positions.
However, S&P expressed concern about the actual level of Venezuela's gold and foreign exchange reserves after reports that the country plans to repatriate them.
"When you have the reserves held abroad, you do have some level of confidence," Arevalo told Reuters in an interview. "That is not going to be the case anymore. They are going to be held at the central bank domestically, then you fall in the same circle of lack of transparency that everything else has in Venezuela."
In our opinion, THE PEOPLE OF THE U.S. AND THE PEOPLE OF THE GLOBAL ECONOMY, THE U.S., OVER THE PAST 20 YEARS AT THE VERY LEAST, has been changing and enforcing arbitrary laws, price and exchange controls, and other distorting and unpredictable economic measures have undermined private-sector investment and hurt productivity, weakening U.S's domestic and THE GLOBAL domestic economy.
Therefore, we have concluded by THE PEOPLE OF THE GLOBAL ECONOMY AND THE PEOPLE OF THE U.S., that the U.S. shall have their rating adjusted from D+ to F-.
THE PEOPLE OF THE GLOBAL ECONOMY SHALL ENFORCE THIS RATING BY ADJUSTING THEIR METHOD OF CONSUMER SPENDING, AND DECREASING THEIR PARTICIPATION IN THE U.S. ECONOMY AND ITS CURRENT FORM OF GOVERNMENT UNTIL FURTHER NOTICE.
PLEASE PASS THIS OFFICIAL NOTICE OF THE PEOPLE TO EVERYONE YOU COME INTO CONTACT WITH DIRECTLY AND INDIRECTLY.
THE PEOPLE WILL ENFORCE THIS RATING OFFICIALLY THROUGH THEIR OWN ACTION, OR MORE EXACTLY, THROUGH THEIR INACTION AND NON-SUPPORT OF THOSE IN CONTROL.