Fear of the petro

[luzribeiro]

Petro cryptocurrency BANNED in United States as Venezuela claims Trump is RUNNING SCARED

Just a day before March 20, when the new Venezuelan crypto-currency Petro started mass circulation (launched a month earlier with great interest from the foreign investors), US president Donald Trump announced a ban on petro transactions. Then he signed a bill banning US citizens from operating with any digital currencies or accounts related to the Venezuelan goernment. Trump also instructed secretary of the economy Mnuchin to prepare the mechanisms for carrying out the ban. Furthermore, the list of Venezuelan officials who are under US sanctions was expanded.

Doubtless, the US sanctions policy is an outright attempt to further suffocate the Venezuelan economy and pave the ground to a regime change in Caracas. Hugo Chavez started the Left Wave in Latin America and was a big thorn in America's ass ever since he launched the peaceful Bolivarist Revolution. The US efforts to reverse that course peaked in 2002 when they attempted to stage a coup against Chavez, and they haven't stopped ever since. The US methods are well-known: constantly isolating and undermining the Venezuelan economy, stirring discontent among the population, and looking for ways to cause a political change in Venezuela, a sovereign country. That's been much in line with the US pattern of removing "unfriendly" governments throughout Latin America and elsewhere, at times violently.

Keep that in mind when you're thinking about the Russian meddling in US politics.

Now, lots of Western mainstream media have tried to sell the story that Venezuela's economic woes are entirely caused by the ineptitude and corruption of the Venezuelan political elite. Conversely, the Venezuelan government has attempted many times to make a different case, presenting data illustrating the full scope of the economic war that's being waged against their country. Things got worse last year when in August 2017 new US sanctions were added and the rope tightened around Venezuela's neck, practically blocking any capability of financial and trade transactions with other countries. The EU, being the obedient US puppy, also joined the pressure with sanctions of their own. The result is an ever deteriorating economic situation in Venezuela that prevents the government to import essential goods to meet the needs of its population. Essentially, Venezuela is being starved.

That's why last year Maduro announced the creation of the Petro, a crypto-currency that, unlike other crypto-curencies which are entirely virtual, was to be supported with a guarantee of natural resources such as oil, gold and diamonts. The purpose of this currency was to bypass the US financial and economic blockade, and allow Venezuela to function as a country.

So on February 20 this year, Caracas officially launched the Petro, and it instantly called significant interest among foreign investors like Colombia, China, Japan, Brazil, Spain, Turkey, Palestine, St. Vincent and Singapore, all of them buying Petros worth a total of 1 billion dollars. The huge interest was due to the fact that the Petro is not a digital currency, but is guaranteed with 5 billion barrels of Venezuelan oil from the Orinoco basin.

This good start of the new crypto-currency gives Venezuela hope that Trump's embargo will fail, and the investors won't be deterred. In the meantime, Maduro reacted to Washington's attempt to further worsen his country's economic situation, issuing a special declaration where he reminded of the conclusion of UN special expert Alfred de Zayas, who recently characterized the US sanctions as "a crime against humanity", because it directly affected the supply of foods, medicines and other goods that are crucial for the survival of the Venezuelan people. Such a charge against the US could potentially be sent to the International Criminal Court, by the way.

The Venezuelan official position states that Venezuela wants to alert the international community of a cynical US plot to subject his country to colonization and an attack on a free and sovereign nation. Maduro also noted that the new crypto-currency would allow his country to break the chains of the dollar, and open an opportunity for restoring the Venezuelan economy.

In turn, renowned historian and political scientist Juan Romero told TeleSur of another important aspect of the current situation. He believes Trump's reaction betrays a serious fear in the US about the Petro currency, because it could potentially destabilize the current global US-dominated financial system. Apparently, the US views the prospect of a stable crypto-currency as a considerable threat to their global domination, because it could set a precedent that would spread in other corners of the world, and give some countries the notion that the dollar is not that invincible and irreplaceable after all. So we could expect further, even more extreme and more hysterical reactions from the US and their network of cronies in the near future.

Comments

[johnny9fingers]

All of this seems about right up to a point. If we are going to draw the comparison further the US hasn't yet invaded the irritant in its back yard and siphoned off the oil-producing bit. Also, however shaky the US economy is, the dollar, backed by the US, is still seen as a more reliable currency even than a good cryptocurrency based on 5 billion barrels of oil... ATM and maybe for quite some time.

The US hasn't really understood that such comparisons with other regimes would even appear to be valid until now. It's easier for us all to believe in our national mythologies. The US now has to up its game, as we all have to; which may be structurally difficult for it given the present rather chaotic revolving-door-administration's approach to things.

I'd contend that these are value-defining times. Let's hope we can get through them without too much of the traditional bloodshed and descent into barbarism.

[halialkers]

Hugo Chavez and Maduro aren't exactly Leftist. Unless, of course, Francisco Franco and Salazar were Leftists. I have no doubt the USA is trying to interfere in Venezuela's economy but the implosion started under Barack "Never met a chance to backtrack imperialism rhetorically he didn't like" Obama, not Donnie "Walking Snack Food" Trump.

Of course Maduro is also just the kind of person to drive a country straight over a cliff of its own making and blame the easily scapegoated Colossus of the North as opposed to dealing with the reality that Chavism without the benevolent PR shell game is a classical Caudillo trainwreck.

Besides, if I recall, hasn't Maduro repeatedly refused to accept any kind of foreign aid at all? And not simply US aid here, any at all?

https://www.nytimes.com/interactive/2017/12/17/world/americas/venezuela-children-starving.html

What do we call someone who denies his country aid and then bleats that it's being deliberately starved?

[mikeyxw]

Not really buying that the US was afraid of the Petro in any way. Venezuela hasn't been able to manage their own currency. Okay, if you believe classical economics where exponential expansion of your money supply (https://tradingeconomics.com/venezuela/money-supply-m2) while your economy is shrinking lowers the value of your currency, they mismanaged their currency. Venezuela's take is that the CIA did it. Anyhow, their own currency lost about 99.9% of it's value since their current president took office, so the idea that they're the ones to manage a crypto currency seems rather suspect. Sure, it's backed by oil, but it might as well be backed by the gold on Jupiter. The Venezuelan government controls the extraction of oil and even Exxon has bailed out. I suspect someone with a dozen Petros who wanted to exchange them for barrels of oil would find that the particular barrels of oil that back their bit-bucks are still in the ground and will be for the foreseeable future.

Rather than because it's a threat to the dollar, I'd say that Trump banned the Petro because it was an attempt to go around existing US sanctions against new debt... you know, like both Presidents Maduro and Trump say it is. The National Assembly of Venezuela has already declared that the Petro is unconstitutional (https://www.ccn.com/venezuelas-national-assembly-declares-petro-unconstitutional/) as it represents a debt against national assets and as such would need to be approved by the National Assembly.

Oh, the international press has been pretty unified in blaming the Venezuelan government for tanking the economy. I'd say they deserve to be listened to because for the past 10 years they've been saying that Venezuela was headed towards disaster.
https://www.cnbc.com/2013/11/25/economy-mismanagement-makes-collapse-look-likely.html
http://www.bbc.co.uk/news/business-20795781
http://abcnews.go.com/ABC_Univision/News/ways-chavez-destroyed-venezuelan-economy/story?id=18239956
Pointing out things like Venezuela's increased dependency a decreasing oil production, the messy currency controls, inflation, and crime were dangers. At this time, this was referred to as the media war against Venezuela. Now that those things have come to pass, it's now an economic war. Between 2012 and the middle of 2017, when Trump's sanctions took effect, Venezuela's economy shrank by 35% or so. It's hard to say exactly because the Venezuelan government has stopped publishing economic data. This is about how much the Russian economy shrank in 1998 and more than the US economy shrank during the great depression. To blame this on the sanctions that went into place towards the end of last year misses out on an important factor of cause and effect, that the cause precedes the effect. So yeah, maybe the mainstream media is united in some conspiracy, along with Amnesty International, Transparency International and the UN, to misplace the blame for why Venezuela is in crisis. Another explanation is that they've screwed up their own country.

[johnny9fingers]

The thing is every little helps, as we know; but the little can be exaggerated and made scapegoat for the whole FUBAR.

This is why we have to be beyond reproach. This is why we have to acknowledge that any comparison with other states, regimes, or polities outside our democratic sphere should just never be able to be made. We have to up our game, and observably.

[mikeyxw]

I'm not really sure I buy that. There have been two rounds of US sanctions. The first ones that targeted individuals who were shown to have been naughty. These folks were denied entry to the US and prevented from having their funds there. These seemed like a fine idea and there were some pretty good reasons articulated for doing so. Sure, there are plenty of other folks who should have had similar sanctions against them, but that's not a reason for not sanctioning those the US did.

The second round, which prevented US banks from purchasing newly issued Venezuelan debt, was aimed at preventing odious debt. Odious debt, where a corrupt dictator leaves a country saddled with debt that the people need to pay back, seems like a good thing to combat as well. Again, there are plenty of other countries that the US might add to the list, but Venezuela seems like a pretty good example. Good enough that the EU, Canada, Brazil, Argentina, Chile, and Colombia joined in. Mr. Maduro has sold many of Venezuela's assets for cheap to various foreign countries. Venezuelan debt also needs to be approved by the National Assembly, an opposition controlled body that Mr. Maduro is trying to replace with his own set of yes-men and women. Disallowing this new debt seems like a good way to oppose this move and limit the size of the mess that will be left behind.

Simply extending more credit seems to be a throwback to the policies of the 70's which led to the debt forgiveness of the 90's, you know, because the third world was unfairly saddled with debt. Why not oppose irresponsible borrowing by a government that has lost it's popular mandate to begin with?

[johnny9fingers]

I'm not suggesting that we don't impose sanctions ever. I'm suggesting they should be transparent in process and aim when applied; and specific too. We in the "West" should have clean hands and be seen to have them. I think we are entering a phase in history where moral advantage will count for a lot. Social media and instantaneous communication has changed the game, but the equilibrium point for all these varied interactions settles around what we might at present term "Liberal consensus" because it includes more people - and people have the vote.

[mikeyxw]

The sanctions were applied to prevent a government that has lost its constitutional authority to issue debt from issuing more debt. Both the EU and US made pretty clear statements that this breakdown in democracy was behind the sanctions. I don't see how they could be much more transparent. Of course, a lot of folks will ignore any statement from the US or EU about democracy and say it's about an economic war to ensure socialism doesn't produce the paradise it always would have if the CIA didn't get in the way or some fear that the Petro will displace the US dollar as the world's reserve currency. Adding in links to the state run media in the country in question to imply there is some conspiracy in the mainstream media to cover up the real story doesn't show an abundance of critical thinking that will be countered by cleaner hands.

[johnny9fingers]

I'm not going disagree about this specific case, because I don't think I can and I don't especially feel a need to defend Venezuela's government.

I'm talking about the endemic and general opinion of the non-aligned world. We have rather lost the hearts and minds campaign, and we need to win it back if we can.

[oportet]

I wonder why we haven't tried more, or tried harder. They kinda meet the criteria...is it a fear of a war on two fronts (or four, or five - whatever an extra one would make it)?

Seeing as Maduro doesn't have cancer, and Trump hasn't tweeted out that he has a tremendous button that could give him cancer - maybe we didn't kill Chavez like he thought/they think (or, Maduro is just preferable to the next in line...)