[News] Petrodollars, Not Corruption Is the Reason for Brazilian Coup

Anti-Imperialist News news at freedomarchives.org
Fri May 27 14:26:30 EDT 2016


  Petrodollars, Not Corruption Is the Reason for Brazilian Coup

Haneul Na’avi - May 27, 2016

Dilma Rousseff’s impeachment was motivated by her efforts to circumvent 
U.S. dollar dominance through trade with Iran.

In ancient times, communities would place their sins on the body of an 
al-Azazel, or scapegoat, and cast it into the desert to die. This was 
done every year in order to garner favoritism in the eyes of God and 
ensure a bountiful harvest. In the same ritualistic fashion, Brazil’s 
acting government has chosen to honor this tradition at the expense of 
the consent of the governed.

Ousted President and Worker’s Party (PT) leader Dilma Rousseff awaits a 
fabricated impeachment trial despite the chagrin of the Chamber of 
Deputies Speaker Waldir Maranhao who ordered an annulment. A defiant 
Congress has hurled its entire weight at the gates of Brasilia’s 
Superior Courts with burnt offerings of her political career; with the 
hope her sacrifice will birth a neocolonial Dark Age. Hands clasped, 
they await the blessings of Chevron, Royal Dutch Shell, and the U.S. 
State Department to affirm their convictions.

Brazilian Democratic Movement Party (PMDB) leader, coup initiator and 
interim president Michel Temer has longed to sell out Rousseff for his 
30 pieces of silver, according to WikiLeaks 
<https://wikileaks.org/plusd/cables/06SAOPAULO30_a.html>, and despite 
the endless sins permeating Brazil’s legislative branch, the mainstream 
media has equated her financial mistakes to treason, completely 
obscuring the bigger picture.“Dilma Rousseff has not been accused of any 
financial impropriety. However, 318 members of the Brazilian Congress, 
including many who backed her impeachment, are under investigation or 
face charges,” Democracy Now highlights 

The undercurrents of the coup flow directly from Petrobras, Brazil’s 
state-owned oil enterprise, currently under fire after Operation 
Wash <http://pandeia.eu/staff/greg-bianchi/what-is-operation-car-wash/> 
unearthed several massive corruption scandals in 2014, and 
multi-partisan thievery saw Rousseff inherit the company’s US$130 
billion debt. Fortunately, to protect the country’s national currency, 
the Brazilian real, Petrobras cleverly retained its debt in U.S. dollars 
for easy convertibility into bonds, while maintaining revenue in reals. 
“[…] 80 percent of the company’s debts are dollar-denominated, but much 
of its revenue comes from domestic fuel sales in reals”, an Energy Fuse 
article stated 

Unfortunately, last year the dollar strengthened and fluctuated, which 
inflamed the nation’s debt burden. “Inflated by a stronger dollar, 
Petrobras' gross debt swelled to 799.25 billion reals [$223 billion] at 
the end of 2015 […] even as the company slashed investment spending and 
spent the last six months of the year trying - with limited success - to 
sell off assets,”MarketWatch states 
A combination of weakening exchange rates, high global oil supply, and 
falling domestic demand, did little to stop Petrobras’s hemorrhaging 
revenues amidst the corruption scandal.

The swell in global supply was attributed to failed OPEC negotiations 
with Saudi Arabia, the cartel’s undisputed leader, after it childishly 
responded to 
North America’s “shale oil revolution” with a textbook oil glut that 
needlessly shrank global revenues to historic lows and threatened 
Petrobras’s limited 2.7 bpd upstream rates. With dwindling funds, the 
company was forced to sell assets 
to avert the onset of reverse Dutch disease. "If oil prices stay low, 
I'm not very hopeful,” Fabio Fuzette of Antares Capital mentioned 

With rising debt in U.S. dollars and tanking profits in reals, Petrobras 
found itself at the mercy of the petrodollar. The company’s Q4 report 
reflected staggering losses, where market prices had “decreased 49.6 
percent from the year earlier to $33.50 per barrel,” Zack’s Research 
This had been aggravated by a previous Moody’s downgrade to “junk” 
status, which “rocked the country’s equities and currency, with […] the 
real tumbling 1.3 percent,” the group also discovered 

Another Energy Fuse article also revealed increasing bouts of 
in-fighting between the government and private investors after the 2007 
discovery of pre-salt extraction reserves. “A 2010 reform under former 
President Luiz Inacio Lula da Silva requires Petrobras to be the sole 
operator in all pre-salt fields with a minimum 30 percent stake, 
severely limiting private investment in those areas.” To protect them 
from corporate exploitation, the Worker’s Party leadership mandated this 
to safeguard current and future welfare programs, but still required 
borrowing from the Central Bank of Brazil. Borrowing also heavily 
subsidized <https://www.imf.org/external/pubs/ft/wp/2015/wp1530.pdf> 
petrol costs to domestic consumers using the state bank. “Petrobras was 
not allowed by the government to pass on higher input costs to its end 
consumers and the company had to sell gasoline, diesel, and other 
refined petroleum products in Brazil at a sharp discount to 
international prices,” a Seeking Alpha article 

This explains the rampant embezzlement and the central bank’s egregious 
of Selic benchmark rates at 14.25 percent. Recently, Temer replaced 
<http://www.ynetnews.com/articles/0,7340,L-4803273,00.html> the bank’s 
leadership with IMF/ World Bank crony Ilan Goldfein to limit borrowing 
to all state-funded programs and impose austerity regulations.

Heads also began to roll at Pemex, Mexico’s Petrobras equivalent to 
which Brazil joined forces via Latin America’s largest trade agreement 
dealing a heavy blow to the continent’s energy reform plans. “Emilio 
Lozoya (Pemex's CEO) lost his job back in February, after failing to 
stop a production decline despite heavy leverage.” As a result, Rousseff 
was forced to continue selling off Petrobras assets, but continued to 
subsidize oil costs with borrowed money. This was a mistake, but not a 

To prepare a motive, the overthrow was preplanned in a businesslike 
manner. A Folha de Sao Paolo report 
containing leaked recordings 
confirmed the pivotal moment in which Temer’s allies moved into position 
weeks before the coup. In it, Planning Minister Romero Juca and former 
Transperto President Sergio Machado commented that they wanted to “stop 
the bleeding” in Petrobras’s finances; a casus belli to form a national 
pact with Temer as the acting president. “I think we need to articulate 
a political action,” mentioned Juca to Machado. Juca has since stepped 
in response to the leak.

However, it was her new methodology to reduce company debt that was the 
final straw. Reuters saliently reported 
that, following her January lifting of sanctions against Iran, the two 
countries met on the sidelines 
prior to the April 17 OPEC summit in Doha to discuss lucrative trading 
opportunities and bilateral agreements. “[Trade Minister Armando] 
Monteiro said Brazil aims to triple trade with Iran to $5 billion by 
2019” and that “Rousseff lifted UN-imposed sanctions against the OPEC 
nation last week after meeting with the Iranian ambassador, […] despite 
tensions with the West,” Reuters continued. This trade was to occur in 
“euros and other currencies”, not dollars, and fit seamlessly with 
Petrobras’s 2015-2019 Business and Management Plan 
Additionally, Brazil’s recent row 
with UNASUR and OPEC member Venezuela further encouraged Rousseff to 
seek new partnerships. With increasing fallout 
between Saudi Arabia and the U.S. over the 9/11 bill, coupled with 
embarrassing results from the Doha summit, Rousseff’s plan became an 
extra headache for the administration. Amidst all the hostile 
finger-pointing, she was in fact taking genuine steps to correct the 
company’s mismanagement using the P5+1 talks as a springboard for 
cooperation. “Relations between Brazil and Iran […] experienced new 
momentum in the context of implementation of the Joint 
Plan of Action 
(JCPoA) last January and of the lifting of international sanctions 
against Iran,” Brazil’s Ministry of Foreign Affairs quoted 

This is precisely what prompted the desperate political coup, which 
occurred <http://www.bbc.com/news/world-latin-america-36021230> the day 
after (April 12) Brazil’s meeting with Iran - Congress voted during the 
OPEC summit after Iran’s absence confirmed this. Washington panicked at 
the thought of endangering petrodollar dominance and losing control of 
Iran’s post-sanction partnerships. Even Reuters perceived this threat by 
voicing “…although it is not clear whether any attempt to circumvent the 
U.S. financial system could raise tensions with Washington, Brazil's 
leftist government in the past has annoyed the United States by drawing 
closer to Tehran.”

Apparently, it did, and Brazil’s plans for reform eventually ran 
diametrically opposed to Washington’s future Iran ambitions, activating 
the CIA assets in the Brazilian Congress to overthrow Rousseff. With her 
impeachment underway, speculators were practically speaking in tongues 
at the possibility of raking in profits to the private sector. “Brazil's 
currency climbed by 1.7 percent to 3.6262 per dollar earlier today on 
heightened speculation that President Dilma Rousseff is nearing 
impeachment,” The Street rejoiced 

Unrelentingly, Temer has opted for massive budget and department cuts, 
rather than continuing with Rousseff’s socialist trajectory, threatening 
Brazil’s long-term autonomy with nearsighted profits and further dollar 
dependency. Additionally, appointing new FM Jose Serra also poses a 
serious threat to the BRICS alliance by moving away from a clear and 
holistic strategy. “Relations with new partners in Asia, especially 
China […] and India, will be a priority,” expressed Serra, insinuating 
that, armed with new pre-salt field reserves, it may not honor ties to 

Furthermore, Temer has also replaced Petrobras CEO Aldemir Bendine with 
Pedro Parente, another favorite of the U.S. financial elite, who was 
“formerly the top executive at the Brazilian unit of U.S. agribusiness 
giant Bunge Ltd. and currently chairman of stock-market operator 
BM&FBovespa SA,” MarketWatch explained 

It is important to recognize that Brazil’s current ‘leadership’ benefits 
both the American empire and Brazilian capitalists. On the U.S. side, 
Brazilian debt continues under the U.S. dollar, and U.S. President 
Barack Obama can maintain the CIA tradition of supporting the “moderate 
opposition” around the world in order to stifle democracy and plunder 
foreign markets. While Brazil’s terrorists aren’t chopping heads, they 
are slashing budgets; bleeding Brazil’s fragile democracy dry, and over 
the next 180 days, this will reflect in the will of the people as they 
take to the streets to fight their puppet government. Temer couldn’t 
have picked a better time, as the Olympics will see him and his enablers 
persistently humiliated through by a rapturous organization of the 
masses; from the grassroots to the Most High, until President Dilma 
Rousseff’s miraculous resurrection.

/Haneul Na’avi, independent analyst for RT. The article was originally 
published on RT. 

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