A very good idea! All poor countries should do the same.
The leader of Venezuela's National Assembly has said the country might refuse to repay $2.8 billion for bonds that Goldman Sachs recently bought from the country's central bank.
"It is apparent Goldman Sachs decided to make a quick buck off the suffering of the Venezuelan people," Julio Borges, the leader of the opposition-controlled Congress, said in a letter to Goldman CEO Lloyd Blankfein.
"Given the irregular nature of this transaction and the absurd financial terms involved that are to the detriment of Venezuela and its people, the National Assembly will soon launch an investigation into the matter. I also intend to recommend to any future democratic government of Venezuela not to recognize or pay on these bonds," Borges wrote.
Last week Goldman Sachs bought around $2.8 billion worth of bonds issued by Venezuela’s state oil firm PDVSA, betting its investment could more than double if the opposition comes into power, The Wall Street Journal reported on Sunday.
The report claimed Goldman paid $0.31 on the dollar, or around $865 million, for bonds PDVSA issued in 2014 and mature in 2022.
Goldman replied it had bought the bonds not from the government, but on the secondary market from a broker.
"We are invested in PDVSA bonds because, like many in the asset management industry, we believe the situation in the country must improve over time," Goldman told CNBC.
"Many investors make similar investments daily through mutual funds, index funds and ETFs which also hold PDVSA bonds. We recognize the situation is complex and evolving and that Venezuela is in crisis. We agree that life there has to get better, and we made the investment in part because we believe it will," the bank added.