Category Archives: EconomicWarfare

The US Covert War on Venezuela in 2015

By Arturo Rosales and Les Blough in Venezuela

Source: Axis of Logic

2014 was a year filled with the goodness and beauty that has made Venezuela one of the most livable countries on earth for the last 15 years. The music, art, climate, food and the spectacular beaches, stunning mountains and views and expansive plains are part of the charm. But it’s the people themselves, their racial & ethnic plurality, sense of community, warm spirit, patience and the inevitable smile one receives immediately upon eye contact that brings joy to daily life here, even in the midst of adversity.

2014 was also a year here in Venezuela that was scarred by actions of the political opposition, funded by Washington and supported by the Western media. Bereft of support by the majority of Venezuelans and unable to gain power through a peaceful electoral process, the opposition resorted to: sabotage of the infrastructure (e.g. attacks on the electrical grid); hoarding and dumping food and daily household products to keep them off the retail markets; manipulating food distribution to create the appearance of “shortages;’ smuggling subsidized products across the border into Colombia for huge profits; attacks on the economy with speculation and an illegal black-market dollar system, driving up a manipulated rate of inflation with spiraling prices in retail markets; causing capital flight by abusing the government’s system of making dollars available for imports and leisure traveling and the violence we saw for 3 months from February to April in the guarimbas in which more than 40 people were killed under the pretext of “student protests.” The greater violence in 2014 ended with the assassination of the foremost leader of Venezuelan youth, youngest member of congress, Robert Serra along with his spouse in their home on October 1, 2014.

The attacks on the Venezuelan economy are manifold. The attempt to destroy the national currency, the bolivar, began in earnest in October 2012 after the re-election of former President Hugo Chávez Frías. At that time, the bolivar was trading at 13.4 bolivars to the dollar. By means of speculation and the illegal black-market dollar, the official exchange rate for most items was forced to soar to 50:1 and the black market dollar rate is currently at about 200:1 and increasing from week to week. By all these means, high prices, making food and products unavailable, standing in long lines waiting to purchase anything from laundry detergent to corn meal, electrical outages, etc, Washington is bent on making life as miserable as possible for the people to turn them against the government. Moreover, the violence is meant to cause fear and a climate of insecurity among the people – in a word, terrorism, laying blame on the government and to portray Venezuela in the media as one of the most dangerous countries on earth.

Vice President Jorge Arreaza inspecting some of the 814,000 pounds (407 tons) of laundry detergent that has been missing from Venezuela's retail stores for months.Vice President Jorge Arreaza inspecting some of the 814,000 pounds (407 tons) of laundry detergent that has been missing from Venezuela’s retail stores for months.

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Russia Just Pulled Itself Out Of The Petrodollar

Source: Zero Hedge

Back in November, before most grasped just how serious the collapse in crude was (and would become, as well as its massive implications), we wrote “How The Petrodollar Quietly Died, And Nobody Noticed“, because for the first time in almost two decades, energy-exporting countries would pull their “petrodollars” out of world markets in 2015.

This empirical death of Petrodollar followed years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling.

We added that in 2014 “the oil producers will effectively import capital amounting to $7.6 billion. By comparison, they exported $60 billion in 2013 and $248 billion in 2012, according to the following graphic based on BNP Paribas calculations.”

petrodollar chart

The problem was compounded by its own positive feedback loop: as the last few weeks vividly demonstrated, plunging oil would lead to a further liquidation in foreign  reserves for the oil exporters who rushed to preserve their currencies, leading to even greater drops in oil as the viable producers rushed to pump out as much crude out of the ground as possible in a scramble to put the weakest producers out of business, and to crush marginal production. Call it Game Theory gone mad and on steroids.

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THE UNITED STATES PREPARES TO END PRECIOUS METALS TRADING AND SET THE DOLLAR’S VALUE OFFICIALLY, by Stratediplo

Source: The French Saker

Translation: Jack & Robin

December 22, 2014

Starting today, December 22, 2014, fluctuations in precious metal prices, which were not truly free of manipulation, will be strictly regulated in US markets. The dollar’s value in terms of gold will be an officially set constant amount and will in no way be representative of any inability to buy an ounce of gold, even for an astronomical amount of dollars.

cme-group

On December 11, the futures market regulator announced new rules for the two main markets, the Comex (Commodity Exchange) and the Nymex (New York Mercantile Exchange), based on rule no. 589, Special Price Fluctuation Limits.[1] The spirit of this maneuver is adroitly buried in technical complexities summed up in a clever grid of permitted fluctuations in absolute values (not percentages), with price ranges that differ from one metal to another, since obviously the same absolute value (e.g., $100) does not in any way represent the same percentage of the value of an ounce of a given metal, such as copper or platinum.

appendixC

It will not be said that the maximum fluctuation is 20% for all metals. But a careful reading of the grid shows, for example, that if the last price of gold was less than $1,000, the maximum fluctuation allowed (upward or downward) is $100, and if the last price was in the range of $1,000 to $2,000, the allowable fluctuation is $200, with the maximum range for gold in the grid being $3,000 to $4,000 (there is no open-ended range of, say, “$4,000 or more”).

With this new rule, the reader of the grid can only imagine what will happen when the price of gold reaches $4,000 (barely more than twice its price on 6 September 2011) – will it be unlimited free fluctuations or a definitive closure of the markets? – unless the regulatory authorities of the world’s leading marketplace believe, and expect everyone else to believe, that it is inconceivable that the price of gold in dollars could double from the price freely determined by supply and demand before the outrageous manipulations of September 2011.

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The Depreciation of the Euro, by Stratediplo

Economists say that the euro is falling. Since currencies are no more measured in gold terms but in comparison to other currencies, they mean that the euro is depreciating compared to the dollar.

It cannot be explained by Greece, which gross domestic product represents 1,9% of the euro area GDP (242 out of 12750 billion dollars in 2013): even the total closing down of Greek economy would not reduce Eurozone economy by more than 2%. It cannot be explained by rumors of intended projects of “quantitative easing” (money printing), in comparison to a dollar that did see a real active policy multiplying its monetary base by five (+400%) since 2008, representing a doubling of the monetary base every three years: it is almost impossible to print enough euros to match the amount of dollars printed in the last six years, let alone increasing the euro monetary base faster than the dollar one. In other terms, every year there are much more dollars in circulation for each euro than the year before. It cannot be explained by a possible future deflation that would not strike the USA less than the Eurozone. None of these explanations presented by economists can justify a serious loss of value ot the euro against the dollar, and when studied carefully they would rather advocate for a devaluation of the dollar against the euro. All arithmetical data are in favor of the euro compared to the dollar.
The only explanation is the strong renewed anti-euro propaganda waged by the USA, which will increase in the next two months, in order to deflect attention from the USA declaration of insolvability, total loss of debt-control and giving up on any restraint, that will (discreetly) come in March, by the definitive lifting of their famous “debt ceiling”.
If the euro goes further down against the dollar, it will not be for economic reasons but for political ones: the incapacity (or the lack of will) of European authorities to explain real figures and fight back the communication war. Because it is a war, as the one against Russia, that destroys more goods than the French bombing of Libya in 2011. And this war will intensify.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of Oceania Saker.
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U.S Ramps Up Economic Warfare with heavy penalties for Russian steel industry

Source: Reuters

Dec 22 (Reuters) – Russia has complained that a U.S. move to scrap a 15-year-old deal sheltering Russian flat-rolled steel producers from high import duties is inconsistent with World Trade Organization rules.

The move comes as Western sanctions over Moscow’s actions in Ukraine, together with a plunge in world oil prices, have pushed the Russian economy to the brink of recession.

The so-called U.S. suspension agreement has sheltered Russian steelmakers from steep anti-dumping duties on hot-rolled, flat-rolled, carbon quality steel, instead setting a cap on imports and a minimum price.

It was scrapped on Dec. 19. As a result, Russian steelmaker Severstal now faces anti-dumping duties of 73.59 percent, while other producers like Novolipetsk Steel and Magnitogorsk Iron and Steel Works face duties of 184.56 percent.

In a letter to the U.S. Department of Commerce this month, Russia’s trade representative to the United States, Alexander Stadnik, said the rates calculated were originally based on methodologies used for countries with non-market economies.

Commerce ruled in 2002 that Russia was no longer a non-market economy, and the country joined the WTO in 2012.

“Since the original investigation Russia has joined the WTO, and has implemented further market reforms that have increased the transparency and predictability of its marketplace, and thus made it easier for foreign firms to compete in Russia and have therefore expanded competition within that market,” said Stadnik in the letter, dated Dec. 12. “In this case, imposing a non-market economy rate is inconsistent with the WTO rules.”

U.S. steel prices ST-CRUNAM-IDX are at their lowest since October last year, according to data compiler CRU, and industry representatives hope protective measures against imports of Russian steel could support them.

In their submission to Commerce, Severstal, Novolipetsk and Magnitogorsk said the duties were punitive because they were calculated 15 years ago under a different economic situation and dumping methodology and based on outdated prices.

But U.S. producer Nucor Corp said it was normal procedure to apply the duty rates calculated in the original investigation.

The U.S. Commerce Department was not immediately available for comment. (Additional reporting by Krista Hughes in Washington, editing by David Evans)

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of Oceania Saker.

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