New video shot this week and obtained by the FOX Business Network shows in gruesome detail how the meltdown in Venezuela is growing more desperate by the hour.

Continue Reading Below

People in the nation’s capital, Caracas, have resorted to eating and fighting over old food thrown away in garbage bags outside shopping malls where restaurants are located.

"They're ripping through garbage bags searching for food, the government says this is not happening, but we are very hungry here in Venezuela," says a male bystander on camera. A local says: "We are starving, we are eating dog food and food meant for farm animals."

Another video shows drivers in Venezuela pulling over to join in the ambush and looting off grocery trucks. That is what happened on the national highway to Puerto Ordaz, in southern Venezuela, where the country's largest oil reserve and a major steel operation is located. The National Guard is shown on camera standing back, not doing anything.

"People are starving, the last resort for them is to loot and steal rice," one bystander says on camera. "The National Guard is here but no one is paying any attention to them at all, they're letting it happen."

The situation in Venezuela is growing more desperate by the hour as its unraveling socialist economy is trapped in a debt vice. The collapse in oil prices has Venezuela’s President Nicolas Maduro, the handpicked successor of Hugo Chavez, desperately fighting to avoid a default on its $185 billion in debt. Wall Street and government sources indicate that would be the largest default in history, with Venezuela’s debt about double the roughly $100 billion in debt Argentina had when it defaulted in 2001. Estimates of the amount of assets and reserves remaining in Venezuela that could be used to pay back its debt have ranged from Bank of America Corp.’s $50 billion to as low as Nomura Holdings’ $10 billion. Venezuela’s foreign reserves have sunk to their lowest levels in 13 years.

Profits from Venezuela’s state companies, including its oil major, PDVSA, have been expropriated and spent on a massive, teetering welfare state. But Venezuela overspent as it taxed its entrepreneurs by more than 90%. “Why work or start a new business if the government is just going to take everything?” a local small businessman, whose company folded, says.

As Venezuela’s economy contracts into a depression (a sizable 7% in 2015 alone), hyperinflation has set in. A basket of basic goods for a family of five is now 524% more expensive versus last year. Lootings are on the rise, with 170 lootings or attempted lootings from January to April 2016. The country may soon be forced to default on its $185 billion in external debt.

President Maduro recently enacted a 60-day state of emergency, but fears are rising the military could step in and a news blackout could be launched by the government. Maduro has also threatened to effectively close the assembly down, and fears grow that the government is not accepting medical help from outside groups including the World Health Organization. This, as locals report that doctors are resorting to using smartphone flashlights to conduct surgeries due to rolling blackouts, the country faces a shortage of antibiotics, and other drug supplies, and infant mortality is on the rise. Last week, in one hospital alone, 14 prematurely born children died due to lack of medicines, locals report.

As has been reported, a sizable chunk of Venezuela’s debt is denominated in its own currency, which means Venezuela could print away its debt payments, although debt held in other currencies would throw a wrench in a default.