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.