Uncertainty reigned in Venezuela Saturday after President Nicolas Maduro unveiled a major economic reform plan aimed at halting the spiraling hyperinflation that has thrown the oil-rich, cash-poor South American country into chaos.

Ahead of a major currency overhaul Monday, when Caracas will start issuing new banknotes after slashing five zeroes off the crippled bolivar, Maduro detailed other measures he hopes will pull Venezuela out of crisis.

Those measures include a massive minimum wage hike, the fifth so far this year.

But analysts say the radical overhaul could only serve to make matters worse.

“There will be a lot of confusion in the next few days, for consumers and the private sector,” said the director of the Ecoanalitica consultancy, Asdrubal Oliveros. “It’s a chaotic scenario.”

​‘Pure lie’

The embattled Maduro, a former bus driver and union leader, said the country needed to show “fiscal discipline” and stop the excessive money printing that has been regular practice in recent years.

The new currency, the sovereign bolivar — to distinguish from the current, and ironically named, strong bolivar — will be anchored to the country’s widely discredited cryptocurrency, the petro.

Each petro will be worth about $60, based on the price of a barrel of Venezuela’s oil. In the new currency, that will be 3,600 sovereign bolivars, signaling a massive devaluation.

In turn, the minimum wage will be fixed at half a petro (1,800 sovereign bolivars), starting Monday. That is about $28, more than 34 times the previous level of less than a dollar at the prevailing black market rate.

Maduro also said the country would have one fluctuating official exchange rate, also anchored to the petro, without saying what the starting level would be.

As it stands, the monthly minimum wage, devastated by inflation and the aggressive devaluation of the bolivar, is still not enough to buy a kilo of meat.

In the capital Caracas, residents were skeptical about the new measures.

“Everything will stay the same, prices will continue to rise,” 39-year-old Bruno Choy, who runs a street food stand, told AFP.

Angel Arias, a 67-year-old retiree, dubbed the new currency a “pure lie!”

1 million percent inflation

The International Monetary Fund predicts inflation will hit a staggering 1 million percent this year in Venezuela, now in a fourth year of recession, hamstrung by shortages of basic goods and crippled by paralyzed public services.

Maduro blames the country’s financial woes on opposition plots and American sanctions, but admits that the government will “learn as we go along” when it comes to the currency redenomination.

His government pushed back Saturday against criticism of the economic reform plan.

“Don’t pay attention to naysayers,” Information Minister Jorge Rodriguez said. “With oil income, with taxes and income from gasoline price hikes … we’ll be able to fund our program.”

Electronic transactions are set to be suspended from Sunday to facilitate the introduction of the new notes.

Economy in turmoil

Oil production accounts for 96 percent of Venezuela’s revenue, but that has slumped to a 30-year low of 1.4 million barrels a day, compared to its record high of 3.2 million 10 years ago.

The fiscal deficit is almost 20 percent of GDP while Venezuela struggles with an external debt of $150 billion.

Venezuela launched the petro in a bid for liquidity to try to circumvent US sanctions that have all but stamped out international financing.

But there’s a good reason the redenomination hasn’t generated renewed hope or investor confidence: Venezuela has done this before.

Maduro’s predecessor Hugo Chavez stripped three zeroes off the bolivar in 2008, but that failed to prevent hyperinflation.

Also, Cryptocurrency rating site ICOindex.com has branded the petro a scam, and the U.S. has banned its nationals from trading in it.
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A budding trade war between the U.S. and Turkey over a detained American pastor is having global consequences. A sharp drop in Turkey’s lira, inflation and the threat of loan defaults, could drag down other economies, particularly in emerging markets. Turkey’s troubles are causing ripple effects in countries as far away as Argentina and Indonesia, while weighing on Asian currency rates and triggering currency fluctuations. VOA’s Diplomatic Correspondent Cindy Saine reports from Washington.
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Turkey’s currency this month has suffered heavy falls triggered by U.S.-Turkish tensions over the ongoing detention of an American pastor. Washington’s threat to impose new economic sanctions sparked another steep currency drop Friday. Dorian Jones reports on the economic fall out for people in Istanbul.
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Tesla shares dropped nearly 9 percent in value Friday, amid reports of CEO and co-founder Elon Musk meeting with the U.S. Securities and Exchange Commission (SEC).

Musk wrote on Twitter last week of his plans to take the company private for a price of $420 per share, writing that he had “funding secured.” On Monday, in a blog post, Musk admitted that was not true, as he was still waiting on a finalized deal with his investors, a Saudi Arabian foreign investment fund.

“I continue to have discussions with the Saudi fund, and I also am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base,” Musk wrote.

Since Musk’s original tweet, the company’s shares have dropped 12 percent overall, and reports of subpoenas being issued by the SEC have sent the company into turmoil.

In a New York Times interview Thursday, Musk said, “This past year has been the most difficult and painful year of my career.” The Times also reported that members of Tesla’s board are concerned with Musk’s drug use, notably his use of the sleep aid Ambien, which some believe have contributed to Musk’s controversial Twitter statements.

Last month, Musk came under fire for calling one of the cave divers who rescued 12 Thai soccer players and their coach a pedophile, citing no evidence. He later apologized for that remark.
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Stocks rose late in the day Friday as investors welcomed signs of progress in resolving the trade dispute between the U.S. and China. The Wall Street Journal reported that the countries hope to have a resolution by November.

Industrial, health care and basic materials companies made some of the biggest gains. The report came a day after China said it will send an envoy to Washington for the first talks between the countries since early June.

Marina Severinovsky, an investment strategist at Schroders, said stocks could jump if the U.S. and China make real progress toward a trade agreement. But stocks in emerging markets might make even bigger gains.

“The rally that could come, if there is a better outcome, would be in emerging markets,” she said. “China has suffered pretty greatly … the U.S. has held up pretty well.”

The late gains came in spite of weak results for several chipmakers. Electric car maker Tesla took its biggest drop in two years on reports of a wider government investigation into the company and concerns about CEO Elon Musk’s health.

The S&P 500 index rose 9.44 points, or 0.3 percent, at 2,850.13. The Dow Jones Industrial Average added 110.59 points, or 0.4 percent, to 25,669.32. The Nasdaq composite edged up 9.81 points, or 0.1 percent, to 7,816.33. The Russell 2000 index of smaller-company stocks gained 7.19 points, or 0.4 percent, to 1,692.95.

The Wall Street Journal cited officials in both the U.S. and China as it said negotiators want to end the trade war before U.S. President Donald Trump and Chinese President Xi Jinping meet at multilateral events in November.

Industrial companies made some of the biggest gains after agricultural equipment maker Deere posted stronger than expected sales. Its stock rose 2.4 percent to $140.59.

Construction equipment maker Caterpillar rose 2.3 percent to $139.34 and engine maker Paccar added 2.3 percent to $67.16.

Chipmakers fell after two companies gave weaker forecasts for the third quarter. Nvidia said it no longer expects much revenue from products used in mining digital currencies, and its stock fell 4.9 percent to $244.82. Applied Materials slumped 7.7 percent to $43.77.

While big names like Netflix, Facebook and Amazon slipped, Apple led technology companies slightly higher overall. Apple stock rose 2 percent to $217.58.

Nordstrom jumped 13.2 percent to $59.18 after raising its annual profit and sales forecasts and posting better earnings and sales than analysts expected. It’s been a mostly difficult week for department stores as Macy’s and J.C. Penney both plunged after issuing their quarterly reports.

The S&P 500 finished this week with a solid gain of 0.6 percent, but it took a difficult path to get there. Stocks fell early this week due to worries about Turkey’s currency crisis, and later investors fretted about China’s economic growth.

The recovery started Thursday as investors hoped the upcoming talks between the U.S. and China will help end the impasse that has resulted in higher tariffs from both countries.

The Hang Seng index in Hong Kong has fallen 13 percent since early June as the dispute has dragged on, and other emerging market indexes have also taken a hit. The S&P 500 has risen over that time.

Tesla was hit with a series of reports that concerned shareholders. The Wall Street Journal reported that the Securities and Exchange Commission started investigating the electric car maker last year to determine if it made false statements about production of its Model 3 sedan.

The SEC is also reportedly looking into CEO Elon Musk’s comment on Twitter about possibly taking the company private.

Tesla stock rose from about $345 a share to about $380 following Musk’s tweet last week, which said Tesla could go private for $420 a share. On Friday it dropped 8.9 percent to $305.50.

Musk also gave an emotional interview to the New York Times, published Friday, about the stress he’s experienced as the company tries to ramp up production. He said this year has been “excruciating” and described working up 120 hours a week, raising concerns about his health.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.86 percent from 2.87 percent.

U.S. crude picked up 0.7 percent to $65.91 a barrel in New York. Brent crude, the standard for international oil prices, added 0.6 percent to $71.83 per barrel in London.

Wholesale gasoline dipped 0.3 percent to $1.98 a gallon. Heating oil inched up 0.1 percent to $2.10 a gallon. Natural gas rose 1.3 percent to $2.95 per 1,000 cubic feet.

Gold was little changed at $1,184.20 an ounce. Silver fell 0.6 percent to $14.63 an ounce. Copper added 0.5 percent to $2.63 a pound.

The dollar dipped to 110.60 yen from 110.88 yen. The euro rose to $1.1443 from $1.1365.

The German DAX lost 0.2 percent and France’s CAC 40 fell 0.1 percent. The FTSE 100 in Britain was little changed.

Japan’s Nikkei 225 index added 0.4 percent and Hong Kong’s Hang Seng gained 0.4 percent. In South Korea, the Kospi gained 0.3 percent.
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Unions at Air France-KLM voiced concern after the company appointed Benjamin Smith as the new CEO with the support of the French state.

The company said Thursday that Smith, who is 46 and was previously Air Canada’s chief operating officer, will fill the role by Sept. 30.

Vincent Salles, unionist at CGT-Air France union, said on France Info radio that unions fear Smith’s mission is to implement plans that would “deteriorate working conditions and wages.”

The previous CEO, Jean-Marc Janaillac, resigned in May after Air France employees held 13 days of strike over pay and rejected the company’s wage proposal, considered too low.

Finance Minister Bruno Le Maire welcomed an “opportunity” for Air France-KLM and expressed his confidence in Smith’s ability to “re-establish social dialogue.”
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President Donald Trump says he’s asking federal regulators to look into the effectiveness of the quarterly financial reports that publicly traded companies are required to file.

In a tweet early Friday, Trump said that after speaking with “some of the world’s top business leaders,” he’s asked the U.S. Securities and Exchange Commission to determine whether shifting to a six-month reporting regimen would make more sense.

The SEC requires such companies to share profit, revenue and other figures publicly every three months.

Some believe executives are making decisions based on short-term thinking to satisfy the market at the expense of the long-term viability of their companies.

There are also tremendous expenses tied to preparing quarterly and annual reports.
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As summer comes to a close and kids prepare to head back to school, retailers are counting on novelty items such as scented markers and glitter glue to help win back some of the market share they’ve lost to iPads and popular electronic gadgets. VOA’s Jill Craig takes a look at retailers back to school strategy.
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A potential ban on the popular herbicide glyphosate in Brazil over concerns it may cause cancer in humans would be a “disaster” for the country’s agricultural industry, Agriculture Minister Blairo Maggi said on Thursday.

A Brazilian court ruled on Aug. 3 that new products containing the chemical could not be registered in the country and existing registrations would be suspended starting from September, until health authority Anvisa issues a decision on its re-evaluation of glyphosate’s safety.

Maggi said that glyphosate is used on around 95 percent of soy, corn and cotton harvested in the country and that there is no readily available substitute. Brazil is the world’s top exporter of soy and a major producer and exporter of corn.

“Glyphosate makes it viable for us to plant and grow crops.

What is the alternative?” Maggi said at an event in Rio de Janeiro.

Brazil’s Solicitor General’s office has said it is preparing an appeal to the court decision with the Agriculture Ministry’s backing. Maggi said he is confident the ruling will be overturned on appeal.

The Brazilian court case is part of a global pushback against the chemical. A U.S. judge ruled last week that Monsanto must pay $289 million in damages to a man who alleged its glyphosate-based products like Roundup caused his cancer.

Monsanto, taken over earlier this year by Bayer AG , said in a statement that more than 800 reviews, including those by the U.S. environmental and health authorities, support that glyphosate does not cause cancer. The company is appealing the U.S. court ruling.

Brazil federal prosecutors brought the case to force Anvisa to make a decision in its re-evaluation of glyphosate, which it started in 2008, said Marco Antonio Delfino de Almeida, a member of a prosecutors’ working group on pesticides.

A 2015 assessment by the World Health Organization’s International Agency for Research on Cancer determined glyphosate probably causes cancer in humans, which provides a basis for reconsidering its safety, Almeida said.

If the Brazil ban on existing product registrations goes into effect, it could disrupt farmers who are set to begin planting soy in September.

The sale of glyphosate products would be halted and farmers who use products with suspended registrations could face legal risks, said Brazil-based agribusiness lawyer Frederico Favacho.

Anvisa told Reuters it is prioritizing its re-evaluation of glyphosate but did not give a timeframe for announcing its findings.
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