What if Venezuela's inflation re-accelerates and forces another redenomination?
Monetizing the oil shortfall with 50%+ monthly inflation is a bolivar-collapse story, near-irrelevant to global crude given Venezuela's collapsed export volumes; short any bolivar exposure, watch PDVSA/Citgo recovery paper. The rhyme is Venezuela's own 2017-19 hyperinflation and serial redenominations. The cascade is mis-built — it prices Brent +2.4%/WTI +2% as if a Strait-of-Hormuz war premium applied, but a domestic-monetization shock in a sanctioned, low-output producer doesn't move the global oil curve. oil_supply_risk is the wrong root.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. Caracas monetizes the oil shortfall and monthly inflation tops 50%, forcing a fresh bolivar redenomination by year-end. The trigger decomposes into signed root‑shocks — Inflation surprise ▲ · Credit spreads ▲ · EM currencies ▼ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Turkish lira TRY 📈 chart | FX | ▼ -0.9% hist -1.53–+0.17% · other way -0.57% (n=12) |
| 2 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -4.09–+0.78% · other way +33.17% (n=12) |
| 3 | Indian rupee INR 📈 chart | FX | ▼ -0.7% hist -0.74–-0.13% · other way -0.44% (n=12) |
| 4 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.6% hist -0.59–-0.13% · other way -0.4% (n=12) |
| 5 | Tech sector XLK 📈 chart | Equity | ▼ -0.6% hist -0.6–+0.37% · other way -0.28% (n=12) |
| 6 | High-yield credit HYG 📈 chart | Rate | ▼ -0.4% hist -0.55–-0.02% · other way -0.36% (n=12) |
| 7 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.4% hist -1.48–+0.54% · other way +7.7% (n=11) |
| 8 | Chinese yuan CNY 📈 chart | FX | ▼ -0.4% hist -0.69–+0.05% · other way -0.62% (n=12) |
| 9 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.5% hist -0.32–-0.18% · other way +1.06% (n=12) |
| 10 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.4% hist -5.05–+3.03% · other way -2.3% (n=11) |
| 11 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.3% hist -1.47–+0.51% · other way +1.31% (n=12) |
| 12 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +5bp hist -3.51–+4.12% · other way -1.1% (n=12) |
| 13 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +4bp hist -6.47–+5.27% · other way -0.3% (n=12) |
| 14 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -0.3% hist -2.51–+4.35% · other way +24.19% (n=11) |
Probable recommendation
Why we may diverge from history
Trust the cascade's SHORT MSTR: the +7% reflects 2023 bank-panic windows where BTC was bid (+63% Signature), not Venezuelan hyperinflation — the on-channel 2008/2021 default prints were -37%/-22%.
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| MSTR MSTR | SHORT | -3.3% · 5d -2.9% | 66% | 32 | 0.25 | ✓ matches cascade |
| COIN COIN | LONG | +4.5% · 5d +4.4% | 65% | 14 | 0.24 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.3% · 5d +0.1% ↺ fades | 63% | 30 | 0.22 | ✓ matches cascade |
| XHB XHB | SHORT | -0.4% · 5d +0.1% ↺ fades | 63% | 31 | 0.22 | ✓ matches cascade |
| SMH SMH | LONG | +1.9% · 5d -0.8% ↺ fades | 61% | 32 | 0.18 | ⚠ differs |
| ARM ARM | SHORT | -5.1% · 5d -3.9% | 62% | 8 | 0.16 | ✓ matches cascade |
| GBPUSD GBPUSD | SHORT | -0.4% · 5d -0.1% | 57% | 31 | 0.13 | ✓ matches cascade |
| 30y yield DGS30 | SHORT | -6bp · 5d -4bp | 56% | 39 | 0.11 | ⚠ differs |
| 10y yield DGS10 | SHORT | -8bp · 5d -5bp | 54% | 40 | 0.08 | ⚠ differs |
| Bitcoin BTC | SHORT | -1.2% · 5d -3.3% | 54% | 16 | 0.07 | ✓ matches cascade |
| SOL SOL | SHORT | -5.0% · 5d -9.1% | 55% | 14 | 0.07 | ✓ matches cascade |
| US dollar DXY | LONG | +0.4% · 5d +0.2% | 54% | 40 | 0.07 | ✓ matches cascade |
| ETH ETH | SHORT | -2.2% · 5d -3.8% | 55% | 15 | 0.06 | ✓ matches cascade |
| XLK XLK | LONG | +0.7% · 5d -0.6% ↺ fades | 52% | 32 | 0.03 | ⚠ differs |
Why this probability
Venezuela chronically monetizes oil shortfalls; high monthly inflation recurrent, but >50% + redenomination by year-end specific. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.