Venezuela: Economic Warfare Brings Nation To Its Knees

Featured article from Mint Press News.

Which is mightier; the pen or the sword? In the case of the recent upheaval in Venezuela, the pen is the obvious answer.

The bankers fight using the pen — the pen that signs the paperwork to impose the sanctions that incur mass starvation, dissolve order, hike prices, and bring nations to their knees — Venezuela is in the crosshairs this time.

Last year, U.S. President Donald Trump signed a determination that singled out Venezuela for failing to adhere to counternarcotics obligations. The accusation came – perhaps not so coincidentally – on the same day that Venezuela declared it would no longer participate in the U.S.’ petrodollar trade system.

Venezuelan President Nicolás Maduro made his position clear, he had stated earlier in that month that the country would look to “free” itself from the dollar within a week’s time, following the U.S.’ sanctions against the embattled nation.

The decision is similar to that once made by former Iraqi leader Saddam Hussein, who dropped the dollar in favor of the euro a few years prior to the 2003 U.S. invasion of Iraq, we all know how that ended.

International markets thus far have failed to noticeably react to the policy shift, despite the threat it presents to the petrodollar system. The system, created in the 1970s, calls for OPEC nations to sell their oil in dollars in order to create artificial demand for the U.S. currency, a fiat currency based on thin air — held together by force.

Venezuela, home to the world’s largest oil reserves, is likely to exert some effect on the demand for dollars through its new policy, though the extent of the potential damage remains unclear. What is clear is that it means enough for the U.S. to declare a financial soft war in retaliation.

Millions of Venezuelans have seen their living conditions vastly improved through the Bolivarian process which shifted the focus away from compliance to the Western Banking Cartel.

The problems plaguing the Venezuelan economy are not due to some inherent fault in socialism, but to artificially low oil prices and sabotage by forces hostile to the revolution.

Starting in 2014, the Kingdom of Saudi Arabia flooded the market with cheap oil. This is not a mere business decision, but a calculated move coordinated with U.S. and Israeli foreign policy goals. Despite not just losing money, but even falling deep into debt, the Saudi monarchy continues to expand its oil production apparatus. The result has been driving the price of oil down from $110 per barrel, to $28 in the early months of this year. The goal is to weaken these opponents of Wall Street, London, and Tel Aviv, whose economies are centered around oil and natural gas exports.

Venezuela is one of those countries. Saudi efforts to drive down oil prices have drastically reduced Venezuela’s state budget and led to enormous consequences for the Venezuelan economy.

At the same time, private food processing and importing corporations launched a coordinated campaign of sabotage. This, coupled with the weakening of a vitally important state sector of the economy, has resulted in inflation and food shortages. The artificially low oil prices have left the Venezuelan state cash-starved, prompting a crisis in the funding of the social programs that were key to strengthening the United Socialist Party.

Corruption is a big problem in Venezuela and many third-world countries. This was true prior to the Bolivarian process, as well as after Hugo Chavez launched his massive economic reforms. In situations of extreme poverty, people learn to take care of each other. People who work in government are almost expected to use their position to take care of their friends and family. Corruption is a big problem under any system, but it is much easier to tolerate in conditions of greater abundance. The problem has been magnified in Venezuela due to the drop in state revenue caused by the low oil prices and sabotage from food importers.

Venezuelans told of how the privatizations mandated by the International Monetary Fund made life in Venezuela almost unlivable during the 1990s. Garbage wouldn’t be collected. Electricity would go off for weeks. Haido Ortega, a member of a local governing body in Venezuela, said: “Under previous governments we had to burn tires and go on strike just to get electricity, have the streets fixed, or get any investment.”

Chavez took office on a platform advocating a path between capitalism and socialism. He restructured the government-owned oil company so that the profits would go into the Venezuelan state, not the pockets of Wall Street corporations. With the proceeds of Venezuela’s oil exports, Chavez funded a huge apparatus of social programs.

After defeating an attempted coup against him in 2002, Chavez announced the goal of bringing Venezuela toward “21st Century Socialism.” Chavez quoted Marx and Lenin in his many TV addresses to the country, and mobilized the country around the goal of creating a prosperous, non-capitalist society.

In 1998, Venezuela had only 12 public universities, today it has 32. Cuban doctors were brought to Venezuela to provide free health care in community clinics. The government provides cooking and heating gas to low-income neighborhoods, and it’s launched a literacy campaign for uneducated adults.

During the George W. Bush administration, oil prices were the highest they had ever been. The destruction of Iraq, sanctions on Iran and Russia, strikes and turmoil in Nigeria — these events created a shortage on the international markets, driving prices up.

Big oil revenues enabled Chavez and the United Socialist Party to bring millions of Venezuelans out of poverty. Between 1995 and 2009, poverty and unemployment in Venezuela were both cut in half.

After the death of Chavez, Nicolas Maduro has continued the Bolivarian program. “Housing Missions” have been built across the country, providing low-income families in Venezuela with places to live. The Venezuelan government reports that over 1 million modern apartment buildings had been constructed by the end of 2015.

The problems currently facing Venezuela started in 2014. The already growing abundance of oil due to hydraulic fracturing, or fracking, was compounded by Saudi Arabia flooding the markets with cheap oil. The result: massive price drops. Despite facing a domestic fiscal crisis, Saudi Arabia continues to expand its oil production apparatus.

The price of oil remains low, as negotiations among OPEC states are taking place in the hopes that prices can be driven back up. While American media insists the low oil prices are just the natural cycle of the market at work, it’s rather convenient for U.S. foreign policy. Russia, Venezuela, Ecuador, and the Islamic Republic of Iran all have economies centered around state-owned oil companies and oil exports, and each of these countries has suffered the sting of low oil prices.

The leftist president of Brazil, Dilma Rousseff, has already been deposed due to scandal surrounding Petrobras, the state-owned oil company which is experiencing economic problems due to the falling price of oil. Although much of Brazil’s oil is for domestic consumption, it has been revealed that those who deposed her coordinated with the CIA and other forces in Washington and Wall Street, utilizing the economic fallout of low oil prices to bring down the Brazilian president.

The son of President Ronald Reagan has argued that Obama intentionally drove down oil prices not just to weaken the Venezuelan economy, but also to tamper the influence of Russia and Iran, Trump has continued this foreign policy.

Writing for Townhall in 2014, Michael Reagan bragged that his father did the same thing to hurt the Soviet Union during the 1980s:

“Since selling oil was the source of the Kremlin’s wealth, my father got the Saudis to flood the market with cheap oil.

Lower oil prices devalued the ruble, causing the USSR to go bankrupt, which led to perestroika and Mikhail Gorbachev and the collapse of the Soviet Empire.”

Read more here.

 

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Trump Officially Declares Trade War on China Days Before Launch of Petroyuan

D-Day for the US Dollar: China’s Petroyuan oil futures contracts to be issued from 26th March 2018.

Between 1944 and 1971, the international monetary system, known colloquially as the Bretton Woods System, revolved around the gold backed US Dollar. Whether in Africa or Asia, a US Dollar was literally as good as gold, because it was pegged to and therefore could be converted to gold anywhere in the world. Then in 1971, US President Richard Nixon made the decision to un-peg the US Dollar from a gold standard, thus transforming the world’s major currency into a floating fiat currency.

In order to maintain the Dollar’s position as the world’s leading currency, the US reached an agreement with the leaders of OPEC, Saudi Arabia in particular, to sell oil exclusively in US Dollars, irrespective of who the buyer was.

This system remained largely unchallenged until the the arrival of a non-Dollar based economy, China, as the new leading economic power of the world, whose GDP will soon eclipse that of the US. Already, China purchases more oil than any other country in the world, in spite of its increased domestic energy production and furthermore, China now has the world’s highest purchasing power of any nation on earth. Even before oil became the highly valued commodity it became in the 20th century, the nation with the largest economy and more importantly, the largest and most wide reaching purchasing power, has traditionally set the bar for their own currency becoming the de-facto global currency of exchange and the most pervasive reserve currency for global treasuries.

Western-aligned states will shift to Eastern alignment.

For China and China’s partners this means that they will be able to set the terms of major international trade deals. For OPEC, it means intensifying discussions with China and China’s long term partners, as opposed to the US and its long term partners. This means that even traditional US allies like Saudi Arabia will begin looking to open new doors with China in preparation for an oil export market that will see banknotes featuring images of Mao Zedong supplant those with images of George Washington.

This will have a knock on-effect in geopolitics, making the richest countries in the Arab world, particularly those in the Gulf Cooperation Council, less attached to US foreign policy making. If China becomes their biggest trading partner and if the trade is conducted in the Petroyuan, it will be China whose geostrategic goals will be able to hold sway in the court of Gulfi Arab monarchies rather than the whims of Washington. Already, Saudi Arabia has begun courting China, likely in order to attract investment for its new megaproject, the creation of a massive new city on the Gulf of Aqaba.

U.S. sanctions will lose their effectiveness.

The Petroyuan will also help to render US Treasury sanctions far less effective, as countries whose global trade is linked in with Chinese monetary and trade policies, will be out of the loop of the US Dollar based system. This represents new opportunities for countries as diverse as Syria, Venezuela, Iran and if the right conditions are met from Beijing’s perspective, also the DPRK.

While Washington denies that its Federal Reserve system is now the biggest basis for its continued, however waning international influence, the fact that US political leaders are openly horrified by the arrival of China and its Petroyuan, is a prima facie admission that while China has industry, innovation, military might and is on the cusp of edging the Dollar out as the world’s leading reserve and trading currency, soon the US will have little but military might to show for its superpower status and given how expensive this military might is for the US, the changes in world monetary markets, could also impact America’s ability to invest in its own military-industrial complex.

The myth of an “undervalued” Yuan.

Of course, the US accuses China of purposefully undervaluing the Yuan so as to make Chinese exports more affordable and thus attractive. What the US hasn’t considered is that when the Yuan becomes the de-facto global reserve currency, it’s floating rate will likely be higher than that of the US Dollar. In this sense, the lesson for the US is “be careful what you wish for” and the lesson for China is that if the US seeks to shut Chinese goods out of the US market with tariffs, sanctions or even embargoes – then China has nothing to lose by floating the Yuan and letting the Dollar’s value sink vis-a-vis the Yuan.

China is in a win-win position vis-a-vis the US Dollar, while for the US, Washington and Wall Street will have to examine how major European currencies coped in the post-Bretton Woods and pre-Euro period. Ultimately, the only way the US will be able to cope in such an environment is to invest more into domestic production in order to regenerate confidence in a Dollar whose value will have to be based on what America does, rather than what America was. While technically the US still is a monetary leader, when the Yuan inevitably eclipses the Dollar, the US will have to get used to the word was in respect of global hegemonic monetary dominance. Much to the relief of millions, the US will no longer be able to peddle the lie that US hegemony is due to a somehow superior political and social system. The reality that US hegemony is based on the accepted value of the Dollar will be starring the US, its allies and its adversaries in the face like an emperor without clothes.


As China takes a decisive economic step away from the dollar; the international bankers move in.

Now, in the run up to the launch of the Chinese Petroyuan on March 26th 2018, U.S. President Donald Trump is declaring economic war on China on the behalf of international banking interests.

Protectionism has its time and place and this is usually in a newly industrializing nation that has not yet reached its peak output.

When countries like Britain, the US, Germany, Japan and China began their unique and highly notable industrial revolutions, they did so under the cover of protectionist policies. In this sense, as a nation develops an industrial base, in order to reach the zenith of development, it is important not to rest on someone else’s laurels in the form of easy imports. Protection turns the industrializing nation into an industrial island, thus testing the limits of self-sufficiency in terms of industrial development and the development of an internal market.

This is exactly what is happening, a second planned industrial revolution — a shift away from Tertiary and Quaternary imbalanced economies back to the industrial roots that will make the West once more a major economic contender.

Once such a revolution reaches a comfortable level of self-sufficiency, a protectionist economy has reached maturity and is ready to test the waters of free trade.

In the short to mid-term, the Globalists are promoting an artificial divide of trade protectionism, pursuing a split between Western and Eastern exchange in a bid to isolate China and its partners, Trump’s latest sanctions are one facet of this, for example; artificially inflating the price of Chinese goods to stimulate confidence in domestic economies. Protectionist blocs and trade agreements such as the EU are at the forefront of these protectionist efforts to sever ties with non-Globalist economies.

In the longer term, Globalist agents seek to boost the third world population of Europe to create a low-paid, manufacturing powerhouse to challenge China, as well as shift manufacturing and industry back to Western soil to reduce dependencies on non-Western imports and diversify Western import-reliant economies.

To successfully do this, they must eliminate or reduce the majority Western white middle class that demands higher wages and tends to avoid work in laborious, low-pay jobs.

This is something they are actively pursuing by promoting the migrant crisis, promoting anti-nationalism, promoting white-guilt, and the racism hysteria, all intended to ‘water-down’ the West and give emphasis to a more lucrative, lower IQ, third world population.

Many economists call the sanctions ‘damaging’ for both economies, but that’s the point, that the West is filing for a near total divorce from the economies of the non-Globalist variety, this is just the beginning.

New Tariffs.

Trump has signed a Section 301 Action of the 1974 Trade Act, authorizing the implementation of new wide reaching tariffs covering the import of a wide variety of Chinese goods into the United States, with an emphasis on barring Chinese technology and technology investment from the US market. Trump also threatened to take further action against alleged intellectual property rights violations in China. During his speech he also threatened the European Union, Japan and South Korea, but most of his ire was aimed at China. Where weeks ago it was suggested that the US would pass $30 billion worth of tariffs on Chinese goods, today Trump doubled the figure to $60 billion. By invoking the Trade Act of 1974, Trump has bypassed the Congress to take unilateral action in a trade war that most of the Congress and the US Chamber of Commerce does not support.

Donald Trump reaffirmed that while the new measures will be implemented immediately, he will be willing to negotiate with all parties, including China regarding establishing what he calls a better trade balance. He even suggested that the countries whose goods he is slapping new tariffs on would welcome the move because they were “taking advantage” of the US for years. In reality, China, South Korea, the EU, Canada and others have already strongly criticised Trump’s reactionary approach to trade.

It beggars belief that Trump purposefully held off on attempting to negotiate new trade deals until after ordering tariffs which have a punitive effect on both America’s trading partners and the American tax payer. This kind of bullying of powerful nations will if anything, make countries less likely to negotiate a favourable deal in the future. Rather than use tariffs as a last resort after a respectful negotiating process, Trump has decided to use tariffs as a means of blackmailing other nations. The US will now learn the hard way, that there are many markets for goods other than the US market. If anything, this will enforce China’s decision to sell-off even more US Treasury bonds in preparation for a larger divestment of assets from the US, which itself is a requisite to the Yuan detaching its value from the Dollar and floating freely on global currency markets. A floating Yuan was always a matter of ‘when’ rather than ‘if’. Trump’s zero-sum attitude has now made the question of ‘when’, a matter of ‘sooner rather than later’. The result will be less investment in the US economy which means fewer jobs, combined with a weakening dollar which means less purchasing power for both US companies and US consumers. Trump’s move has made this reality all the more inevitable.

When signing the executive order, he claimed “This is only one…it is the first of many”. The markets are likely to respond negatively to this development, but in the medium term, Trump’s move could usher in a pivot away from the US on the part of wider international trading, including in the all important areas of currency and energy commodities markets.

On the 26th of March, China will formally introduce the Petroyuan. The issuing of oil futures contracts in China’s national currency looks to threaten the long term efficacy of the Petrodollar – something the US has used to artificially inflate the value of its currency ever since Richard Nixon detached the Dollar from a gold standard in 1971.

With the US failing to produce desirable quality goods as efficiently as other major industrial powers, Washington has resorted to a combination of tariffs and sanctions as its only remaining weapons to try and inflect economic harm on other nations. Just as sanctions have not caused any significant damage to the Russian economy, so too will China which now has the most powerful internal market in the world, not suffer from Trump’s tariffs, certainly not as much as American businesses and consumers. China’s rapid expansion into new global markets combined with its own continually growing internal market, will rapidly compensate for losses in terms of exports to the US.

U.S. Building Military Garrison To Control Largest Syrian Oilfield

According to recent reporting, the US is building another military base in Syria, this time near the Syrian oil fields in the north east of the country.

Why does the US want to control Syrian oil production? Is it looking to steal Syrian resources? After all, ISIS is all but defeated and the reason given for US involvement no longer makes sense. Is the US looking for a direct conflict with Russia? Is Washington staging for a war on Iran? US ambassador to the UN Nikki Haley has repeatedly warned that the US is ready for a large-scale attack on the Assad government.


New U.S. garrison being established near the Syrian Omar oil fields.

The US is reportedly establishing an at-Tanf-like military garrison in the Omar oil fields area in the province of Deir Ezzor. Considering the US attempt to maintain a military presence in Syria for as long as possible, Washington may see the Syrian oil and gas resources as useful tool to gain an additional financial revenue from its occupation of the eastern part of the country.

A video has also appeared allegedly showing two US-led coalition Blackhawk helicopters landing in the area.

On March 19, the Syrian state-run news agency SANA accused the US-led coalition of evacuating four ISIS members from the area between the villages of al-Jissi and Kalu in southeastern countryside of Qamishli.

SANA also recalled that on February 26 the US allegedly evacuated a number of ISIS members to the Sabah al-Kheir center, 20 km south of Hasaka, which the US forces are using as center for training militant groups.

According to one version, the US is going to use the evacuated ISIS members to create “security threates” in Central Asia. In late 2017 and early 2018 reports appeared that the US had already redeployed some ISIS members from Syria and Iraq to Afghanistan. The ISIS threat will serve as justification for a continued US military presence in the country.

Following the military success of the Turkish Army and the Free Syrian Army in Afrin, Turkish President Recep Tayip Erdogan vowed to clear the entire Syrian north, from Manbij to Qamishli, of Kurdish militias, mostly the People’s Protection Units (YPG).

He also hinted that the Turkish Army may conduct a large-scale military operation against the PKK in northern Iraq.

The Kurdistan Workers’ Party (PKK) is a Kurdish militant separatist organization operating in southern Turkey, northern Syria and northern Iraq. The PKK has for a long time been involved in militancy against the Turkish government and de-facto seeks to establish an independent Kurdish state, which would include territories from Turkey, Syria and Iraq.

Ankara describes the YPG as a branch of the PKK. The YPG is at the core of the US-backed Syrian Democratic Forces. US support for the YPG is one of the reasons behind the current Turkish-US tensions in the diplomatic sphere.

In Eastern Ghouta, Syrian and Russian forces continued evacuating civilians from the militant-held areas. According to Chief of the Russian General Staff’s Main Operations Department Colonel-General Sergei Rudskoi, 44,639 people have been evacuated in recent days.

The Russian military has also warned that militants in Eastern Ghouta have not abandoned their attempts to stage false flag chemical attacks which they plan to blame on the Syrian government.


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