Venezuela's state oil company has recently clashed with domestic and foreign service providers that help extract the OPEC nation's heavy crude, accumulating billions of dollars in debts as it aims to renegotiate contracts to reduce costs by 40 percent.
PDVSA says some of those contracts are now overvalued due to falling crude prices that have shrunk government revenue. Venezuela relies on oil for 93 percent of its export income, but has seen world oil prices slide 61 percent since their July peak — to settle at $56.71 on the New York Mercantile Exchange on Thursday.
Let's see if I understand Hugonomics. If the price of oil comes down, then the oil service companies should be willing to be paid less. Therefore, if the price of gold goes up, then.............. I'll let everyone fill in the blank.
Unfortunately for us, Hugo-like all socialists-is a blank.
