The Enigma Source

Mathias fidgeted with Alejandro’s recounting of their clumsy entrance, but Dutch just blushed at being so distracted by feminine charms.

Alejandro suppressed his smile and sensed that the conversation needed to move forward. He offered, “Gentlemen, let’s progress to the business at hand, shall we? Mr. Petersen, you indicated that you had what you considered to be our economic salvation but failed to provide much more than that statement as a proof point.”

Mathias replied as politely as possible, “Apologies, but I was under the impression that the upfront fund transfer provided most of the proof points to further our discussion. And please, call me Mathias, Director.”

Alejandro, mildly annoyed at the inference, stiffly rebuked, “The funds transfer provided an introduction, not the substance of your claim. You have your introduction and now I want the details, Mr. Petersen.”

Mathias, quickly reeled in his initial irritation from the meetings’ opening farce and replied, “Director Noya, forgive me if I choose words that seem too blunt. To the outside world, Venezuela appears to be collapsing, and frankly, no one seems to be willing to lend a hand. Yes, I know the Russians will sell you their castoff weapons, but there is no corporate or private investment being directed to this country.

“Venezuela is being circled by the investment vultures, waiting for her to expire so they can swoop in and dine on the carcass. Using our economic model on your current circumstances, we are predicting a 20% chance of economic survival as a country. I am afraid our modeling for your personal circumstances is not that high.”

Alejandro’s nostrils flared, and with some difficulty in his agitated state, he managed to maintain a civil tone as he responded, “You’re not the first person to sit in that chair to predict my government’s demise!

“Venezuela has had adversity before, but we will survive it and on our terms. Make no mistake on this accord. Why don’t you tell me what you’re selling, so I can tell you why we don’t need it?”

In a quiet reserved tone, Mathias politely offered, “We don’t doubt your resolve to persevere in your economic plight. However, Director, with hard currency flowing out, economic inflation skyrocketing, and with little food and no medicines to offer your people, your time is limited. The problem, as we see it, is that you are trying to build a new economic model but are using outdated financial tools.

“Your government is trying to re-write the Venezuela economy after a socialist model, but the fundamental flaw with your approach is that you are trying to use Capitalist tools that depend upon a centralized banking model. As we see it, your currency, the bolívar, is evaporating faster than you can print it. On top of that, U.S. dollars as the world reserve currency is being exported through any means possible, and your only asset on the world stage is oil. The problem gets back to paying to extract, move, and store it while there is no reliable transaction medium. I am sure it hasn’t escaped your attention that Venezuelan oil prices are less than everyone else’s?”

Dutch could see Alejandro’s jaw muscles tensing with anger but that he was recognizing everything being said was true. Dutch was impressed, yet again, at the way his partner could weave a story.

Alejandro collected himself mentally and finally asked, “Then what precisely do you propose to help our situation? Of course, the follow-on question we will ask after the first is, how much is your help going to cost?”

Mathias paused a moment for dramatic effect then said, “Take your country to the 21st century with an economic model built upon digital or crypto-currency. Our company already has the computer algorithms to launch and control a state-issued digital currency for your government. You, Director, control the sale blocks of the digital currency initially at a value close to the U.S. dollar. You use the U.S. dollars to pay off back debt and to get your coinage into the hands of your buyers. You eliminate your government-issued currency overnight, which has little to no value in foreign markets, and replace it with the new digital currency.

“With the chance at a vibrant market, your black market disappears overnight as well. Because the e-currency is very easily monitored, tax evasion is a thing of the past. Stability returns to your Venezuelan markets along with confidence in fair value exchange when trading.

“I’m sure you recognize, with your expertise in world economics, this same model has already been deployed in Estonia when they faced the Soviet fallout in 1989. They were simply cut off from the Soviets and had to begin from scratch. They turned to the digital age and walked away from the old Soviet model of analog anything. That includes digital currency. Why, you can even become an e-Citizen of that country and never even live there! Imagine getting tax revenues from your citizens without having to provide physical infrastructure for them to live!”

Alejandro studied Mathias and Dutch a moment before he almost smiled and said, “You know how we translate the name Mathias here in Venezuela? It means, Gift from God.”