The media fabricated “default” comes before the real one. The stage is slowly being set with economic sanctions; psychological pressure on Venezuelan bondholders and a media campaign that blows out of all proportion routine financial transactions.

Last Sunday, Venezuelan President Nicolas Maduro said that “default” will never come to Venezuela because the South American country “will always have a clear strategy” aimed at the renegotiation and restructuring of debt – as reported by the Spanish daily El Mundo.

However, just a day later, dawn broke in Venezuela with the news that the U.S. rating agency Standard & Poor’s, S&P, downgraded the country’s CC rating (very vulnerable) to “selective default” due to non-payment of US$200 million of the coupon on its bonds 2019 and 2024 within the 30-day grace period, according to a report in the Venezuelan daily El Universal.

So why did S&P jump the gun with a “selective default” classification when for a country to be declared in default, that country must also expressly declare that it accepts that it is insolvent and would be able to repay its commitments. This is the usual mechanism and such an acceptance has not been declared by or in the case of Venezuela. All the economic spokespeople of Venezuela indicate that the country is paying and will continue to pay its commitments.

But such headlines make good reading for a “media default” and good reading in newspapers such as the Financial Times that, as a world leader in its field, should know better than talk about a “default” when officially this cannot happen without Venezuela declaring itself insolvent.

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Let us not forget that Standard & Poor is one of the international rating agencies that had Lehmann Bros at the highest AAA rating in September 2008 – one day before Lehmann collapsed and almost took the whole world financial system down with it. So much for the credibility and expertise of S&P if you want to look at it objectively. And there is little doubt that this arch-capitalist agency is at the beck and call of the U.S. Treasury Department that is hell-bent on trying to force Venezuela into a debt default to contribute to the U.S. Administration’s plans of ousting President Maduro and refounding a newly compliant Venezuela as the “U.S. gas station on the northern coast of South America.” On Monday, a group of bondholders of Venezuelan debt from the U.S., Panama, United Kingdom, Portugal, Colombia, Chile, Argentina, Japan and Germany met in Caracas with the Venezuelan Government as part of the first approach for the renegotiation and restructuring proposed by Maduro.The Venezuelan authorities described this meeting as “highly positive” and “very auspicious,” in a statement in which it was recalled that in the last 36 months the South American country had canceled US$73.359 billion in capital and interest payments.

A pleasant “atmosphere” for the meeting

Last Friday, a new list of sanctioned officials emerged from the U.S. Treasury Department against Caracas. In this group, which is made up of nearly 20 members of the government, including President Maduro, came the warning: “Americans should be cautious in their relations with the Venezuelan government,” added the statement from Washington.

It demanded that they did not get involved in “transactions, agreements, in a manner directly or indirectly” with the officials named on the list of the treasury department under penalty of fines of up to 10 million dollars and imprisonment for a maximum 30 years.

In that atmosphere that was also burdened with the sanctions agreed by the Council of the European Union bondholders met to arrange the refinancing or restructuring of the Venezuelan debt in the White Palace, a building located opposite Miraflores Palace which is the seat of government in the capital city.

Are there non-payments or not?

The economist Luis Enrique Gavazut, Member of the Economic Observatory of the Presidency, told RT that the Standard & Poor’s rating is a “premature declaration,” based on the fact that Venezuela did not pay US$200 million.

“It is nothing but a payment of interest. It is pretty mundane and of low magnitude,” says Gavazut, if compared with the cancellation of the external debt announced Tuesday by Communications Minister Jorge Rodriguez.

In his opinion, both amounts should be compared: US$200 million, with the interests of the “magnitude” of an external debt that amounts – according to the figures of the high government – to about US$150 billion at this time.

This announcement is part of the other two payments for PDVSA bonds made by Venezuela weeks ago, amounting to almost US$2 billion and that “were the last that could be made under these conditions,” before announcing the refinancing and restructuring of the debt.

For Francisco Gonzalez, international analyst interviewed by RT, the media created the so-called default, “The media published that information to generate fear in the private investors,” he said, because that can discourage them from buying bonds and investing in Venezuelan debt.

“They want to cut off foreign investment in the country,” he pointed out. Gonzalez also exposed that this campaign seeks to discredit the South American country and create the opinion that Venezuela is not in a position to meet its financial commitments.

Let us not forget that Standard & Poor is one of the international rating agencies that had Lehmann Bros at the highest AAA rating in September 2008 – one day before Lehmann collapsed and almost took the whole world financial system down with it. So much for the credibility and expertise of S&P if you want to look at it objectively and there is little doubt that this arch-capitalist agency is at the beck and call of the U.S. Treasury Department that is hell-bent on trying to force Venezuela into a debt default to contribute to the U.S. Administration’s plans of ousting President Maduro and refounding a newly compliant Venezuela as the “U.S. gas station on the northern coast of South America”.

On Monday, a group of bondholders of Venezuelan debt from the U.S., Panama, United Kingdom, Portugal, Colombia, Chile, Argentina, Japan and Germany met in Caracas with the Venezuelan Government as part of the first approach for the renegotiation and restructuring proposed by Maduro.

The Venezuelan authorities described this meeting as “highly positive” and “very auspicious,” in a statement in which it was recalled that in the last 36 months the South American country had canceled US$73.359 billion in capital and interest payments.

A pleasant “atmosphere” for the meeting

Last Friday, a new list of sanctioned officials emerged from the U.S. Treasury Department against Caracas. In this group, which is made up of nearly 20 members of the government, including President Maduro, came the warning: “Americans should be cautious in their relations with the Venezuelan government,” added the statement from Washington.

It demanded that they did not get involved in “transactions, agreements, in a manner directly or indirectly” with the officials named on the list of the treasury department under penalty of fines of up to 10 million dollars and imprisonment for a maximum 30 years.

In that atmosphere that was also burdened with the sanctions agreed by the Council of the European Union bondholders met to arrange the refinancing or restructuring of the Venezuelan debt in the White Palace, a building located opposite Miraflores Palace which is the seat of government in the capital city.

Are there non-payments or not?

The economist Luis Enrique Gavazut, Member of the Economic Observatory of the Presidency, told RT that the Standard & Poor’s rating is a “premature declaration,” based on the fact that Venezuela did not pay US$200 million.

“It is nothing but a payment of interest. It is pretty mundane and of low magnitude,” says Gavazut, if compared with the cancellation of the external debt announced Tuesday by Communications Minister Jorge Rodriguez.

In his opinion, both amounts should be compared: US$200 million, with the interests of the “magnitude” of an external debt that amounts – according to the figures of the high government – to about US$150 billion at this time.

This announcement is part of the other two payments for PDVSA bonds made by Venezuela weeks ago, amounting to almost US$2 billion and that “were the last that could be made under these conditions,” before announcing the refinancing and restructuring of the debt.

For Francisco Gonzalez, international analyst interviewed by RT, the media created the so-called default, “The media published that information to generate fear in the private investors,” he said, because that can discourage them from buying bonds and investing in Venezuelan debt.

“They want to cut off foreign investment in the country,” he pointed out. Gonzalez also exposed that this campaign seeks to discredit the South American country and create the opinion that Venezuela is not in a position to meet its financial commitments.

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In the opinion of Professor Gonzalez, they are seeking to asphyxiate the economy and isolate Venezuela politically until it has “no credit possibilities and drown(s) financially little by little.” He also explained that although the issue of possible non-payment has been spread by the U.S. and European media, a “default” in this case does not correspond to the policy of multilateral agencies.

The fact is that a US$200 million interest payment may have arrived late to some bondholders but was this really a late payment or the international banks dawdling on the transfer to paint Venezuela in a bad light? This has been done in the past and Citibank even made a statement that “Venezuela had paid late” when the funds were held up in the system.

Let us not forget that Standard & Poor, Moody and Fitch rating services are financed by the banks and therefore have no real independence. By extension, the banks are beholden to orders from the U.S. Treasury Department and will apply sanctions and blocking measures if required to so. All are the politico-financial arm of the U.S. administration and its perceived global financial hegemony based on a fiat currency.

Gonzalez agreed with Gavazut that the objective is to “generate fear in private investors” not to buy bonds, not to participate in the renegotiation of the debt and finally, not to invest.