[News] Why should the US care who is the President of Venezuela?

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Tue Jun 29 11:51:50 EDT 2004


Why should the United States care who is the President of Venezuela?


VHeadline.com commentarist Karl B. Koth writes: The recent verbal threats 
from the imperialist titan made by US sub-secretary of State Robert Noriega 
and reiterated by Otto Reich [i] recently raise the question of not what 
the USA is trying to accomplish with its hostility towards Venezuela, but 
the more important question why.

We know, for example, that the US wishes to get rid of 
constitutionally-elected President Hugo Chavez Frias, but what precisely is 
behind this goal is less clear.

Let us first eliminate some of the more obvious perceived reasons behind 
the US attitude:

1) We know that the claim that Venezuela is undemocratic does not hold 
water. Venezuela just happens to be one of the models in the Americas for 
an unsurpassed adherence to democratic constitutional principles and 
practices. Besides, the US, at least considering their incumbent rascal's 
own election four years ago, is no shining example of democracy in action.

2) We know also that charges that President Chavez is "a communist" are as 
ridiculous as calling George W. Bush an enlightened ruler.

3) We know that the reasons have nothing to do with the allegations that 
President Chavez is a dictator, since first, the charge is idiotic, and 
second, the US has never had a problem cozying up to the vilest of tyrants.

4) We also know that the hostility has little to do with controlling the 
supply of oil to the US, because Venezuela has never considered cutting off 
that supply. It would not be in its own interest to do so!! One might argue 
here that the US wants to ensure the supply of oil because of the latent 
threat from a very successful Chinese economy. However, even were it to 
control Venezuelan oil production, the pressures on the oil patch are going 
to increase so drastically in the near future, that controlling one 
country's output would not help either. Still, that is not a good argument 
since maintaining good relations with Venezuela would be the far cheaper 
and easier way of ensuring that supply.

So, what then is the reason? What is behind the constant manipulation, the 
virulent hostility, the verbal abuse, and the probable (I admit, not yet 
proven) support to Colombian paramilitaries who recently invaded the 
country? I believe that the answer, albeit complicated, is to be found in 
the interesting thesis constructed by a Californian lawyer by the name of 
William Clarke, and which, obviously, has not been given wide coverage in 
the news media [ii]. I say interesting, because this plausible and 
well-constructed analysis allows us inter alia to understand primarily the 
real reasons behind the attack on Iraq, as well the hostility towards Iran 
and North Korea, the so-called Axis of Evil. What we are dealing with, in 
fact, is geo-politics in its most serious strategic implications!

The Clark Thesis : Clark's thesis was first made public via the Internet 
about a year ago. He deftly argues that the economic problem plaguing the 
US at the moment is the financing of a huge external trade deficit (almost 
$500 billion per annum), not to speak of the total debt, which has reached 
more than US $7 trillion [iii]. His thesis is made more plausible when one 
considers that other countries, especially China, now hold an economic club 
over the head of the US because of their holdings of US treasury bills [iv].

But how has the US managed to live so "high off the hog" and run up such a 
massive debt? Primarily, it has been made possible by the use of the US 
dollar as the favored petro-currency. In other words, all oil bought and 
sold on the world market is done through the exchange of the commodity for 
US dollars, allowing the US to run this huge deficit. Basically a long-term 
strategy, it began with a deal struck with Saudi Arabia in the 1970s. 
Writes Clark:

"According to research by Dr. David Spiro, in 1974 the Nixon administration 
negotiated assurances from Saudi Arabia to price oil in dollars only, and 
invest their surplus oil proceeds in U.S. Treasury Bills. In return the 
U.S. would protect the Saudi regime. According to his book, The Hidden Hand 
of American Hegemony: Petrodollar Recycling and International Markets, 
these purchases were done in relative secrecy. These agreements created the 
phenomenon known as "petrodollar recycling." In effect, global oil 
consumption via OPEC provides a healthy subsidy to the U.S. economy. Hence, 
the Europeans created the euro to compete with the dollar as an alternative 
international reserve currency. Obviously the E.U. would also like oil 
priced in euros as well, as this would reduce or eliminate their currency 
risk for oil purchases." [v]

In January 2003, before the invasion of Iraq, Clark outlined his thesis. 
Basically, he argued that the attack was due to fears in the US 
administration that 1) future oil supplies had to be ensured since the 
arrival of Peak Oil (after which production will begin to decline) was 
approaching, and 2) it had to keep OPEC from following Iraq's lead and 
converting to the Euro as favored petro-currency.

Let's omit the discussion of Peak Oil, which has been explained fully by 
<http://www.hubbertpeak.com/campbell/>Colin J. Campbell.

The petro-currency argument, however, has never, to my own knowledge, been 
given much exposure by the media. "The Real Reasons," Clark explains," for 
this upcoming war is this administration's [Bush's] goal of preventing 
further OPEC momentum towards the euro as an oil transaction currency 
standard, and to secure control of Iraq's oil before the onset of Peak Oil 
(predicted to occur around 2010) [vi]." Were oil-producing nations to start 
converting to sales in Euros, the oil-consuming countries would have to 
sell their US dollar holdings and buy Euros instead. This would have the 
dramatic effect of causing a crash in the value of the US dollar on world 
markets (estimated at between 20-40%) and produce massive inflation. The 
consequence of that would be a run on the markets and a flight of bond and 
security holders out of the US dollar and into other currencies [vii].

It is interesting to note that the conversion to Euros was precisely what 
Iraq did in 2002, followed by Iran, where half the central banks assets 
were converted to Euros in the same year. Effective December 2002, North 
Korea, although not an oil-producing country, did the same. Just 
coincidentally these three are part of what the US president called the 
Axis of Evil. Does it start to make sense? Hell yes!

So what does this have to do with the interference and hostility towards 

Why should the US care who is the President there?

The answer is that a president favorable to Washington would be one who did 
not implement a nationalist Venezuela policy, which is to say doing what it 
deems right and honorable with its oil production and sales. In other 
words, a pro-US president would not be making the deals that President 
Chavez has done, namely swapping oil for commodities and supporting OPEC's 
move to the Euro as these actions impinge on the exclusivity of the 
Petrodollar as intermediary currency in oil transactions. Yes, Venezuela is 
supporting an OPEC move to switch from the US dollar to the Euro, and that 
in the foreseeable future [viii]. This makes President Chavez anathema in 
the eyes of the US. But that is not all. He is guilty of even a worse 
"crime" in the eyes of the US: Venezuela accepts oil-for-service swaps with 
poor countries, such as Cuba, that don't have sufficient US dollar reserves 
with which to buy the oil it desperately needs, effectively avoiding the 
use of the Petrodollar [ix].

So what does the US plan for Venezuela?

Obviously the answer is the installation of a President favorable to 
Washington. As in the case of Iraq, the idea is to replace Chavez with a 
pro-US President; in other words, one who would not implement a nationalist 
Venezuela policy; and by whatever means.

The coming months leading up to the referendum are going to be the test. If 
one believes that instigating Colombian paramilitaries to invade Venezuela 
was the ultimate, then just wait and see.

There is nothing as dangerous as a wounded animal. By invading Iraq, the US 
embarked on an insane gamble. The entire world is watching the plan 
backfire, which is why Bush must now travel to "Old Europe," hat in hand, 
begging for a bailout. But the lash of the tail of a downed creature can be 
lethal to smaller beings who get in the way.

Venezuelans: be on your guard. The worst desperate efforts are yet to come.

Karl B. Koth
<mailto:kkoth at hotmail.com>kkoth at hotmail.com

Dr. Karl B. Koth is former professor of Latin American History at Okanagan 
University College in Kelowna, British Columbia, Canada. He is the author 
of Waking the Dictator: Veracruz, the Struggle for Federalism, and the 
Mexican Revolution, 1870-1927, Calgary, Alberta: University of Calgary 
Press, 2002. He divides his time between Canada and Brazil.

[i] <http://www.vheadline.com/readnews.asp?id=21723>Otto Reich: Mastermind 
of the April 2002 coup d'etat against President Hugo Chavez VHeadline.com, 
June 24, 2004

[ii] William Clark, 
"<http://www.ratical.org/ratville/CAH/RRiraqWar.html>Revisited-The Real 
Reasons for the Upcoming War in Iraq: A Macroeconomic and Geostrategic 
Analysis of the Unspoken Truth." See also "Oil, the Dollar, and US 
Prosperity," Richard Benson, SFGroup, August 8, 2003

[iii] "<http://www.cincypost.com/2004/06/25/edita062504.html>Our $8 
trillion headache," Cincinnati Post (On-Line Edition), 25 Jun 2004

[iv] Martin Walker, 
"<http://www.upi.com/print.cfm?StoryID=20031218-064204-4007r>U.S distracted 
- and the world changed," UPI, December 26 2003

[v] Ibid. See Spiro, David E., The Hidden Hand of American Hegemony: 
Petrodollar Recycling and International Markets, Cornell University Press 

[vi] Clark, "<http://www.ratical.org/ratville/CAH/RRiraqWar.html>Revisited"

[vii] This is not idle speculation. Writes David R. Francis, "Foreigners 
own far more of their direct investments (plants, equipment, office 
buildings) and financial assets than Americans own in other nations." David 
R. Francis, "US financial power: a bang and a whimper," The Christian 
Science Monitor, 1 Jan. 2004.

[viii] Patrick Brethour, "OPEC mulls move toward euro for its pricing of 
crude oil," Globe and Mail (Toronto), Tuesday, Jan. 13, 2004, p. B1.

[ix] Hazel Henderson, "Beyond Bush's Unilateralism: Another Bi-Polar World 
or A New Era of Win-Win?" InterPress Service, June 2002, quoted in Clark.

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