From the Wilderness is a blog or internet newsletter that focuses on the impending effects of peak oil. It posts stories relating to the effects on our economy as oil supply inexorably falls behind demand. Survivalist in tone, and indeed in intention, it understands that food production, industry, and transportation in our society are all totally dependent on oil, and considers the inevitable collapse of our civilization that this implies. Story items tend to fall in two categories–ideas for survival, during and after collapse, and signposts along the way to impending disaster. Today’s signpost comes from Venezuela.
For months the US has been escalating the tensions between the two countries. Having tried to overthrow the Venezuelan president Hugo Chavez–first by assassination and then through a recall referendum, and failed–the US has now been escalating the rhetoric of war. For his part, Chavez seems to have been taking the US at its word, arming his supporters with light automatic rifles in preparation for a war that the US will probably fight under the guise of the War on Drugs, by proxy through Colombia.
And now Chavez makes another move. He has just pulled out of US investments.
But as FTW explains, Venezuela is just part of a larger picture:
It is clear to the whole world what is coming for the US economy. Gulf [of Mexico–Gaianne] energy production is still almost completely shut in and won’t be repaired for years. It makes no difference if half of the refineries are back up because they can’t get product. Rig damage is far worse than expected and there is still no full assessment of the pipelines running from platforms to shore. Bush just added $300 billion in new expenditures for clean up and said he wouldn’t raise taxes. Consumer confidence is plunging. Credit card late pays and defaults are soaring. Venezuela will not be the last nation to pull its reserves out this fall and winter. To put it bluntly, the US is now a bad investment. And the two-plus billion dollars a day needed to finance our economy is going to dry up very quickly.
The US house of economic cards is starting to come down. – MCR
The story FTW is refering to comes from
(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)
Chavez: Venezuela Moves Reserves to Europe
September 30, 2005 01:50 PM ET
CARACAS, Venezuela (AP) – Venezuela has moved its central bank foreign reserves out of U.S. banks, liquidated its investments in U.S. Treasury securities and placed the funds in Europe, Venezuelan President Hugo Chavez said Friday.
“We’ve had to move the international reserves from U.S. banks because of the threats,” from the U.S., Chavez said during televised remarks from a South American summit in Brazil.
“The reserves we had (invested) in U.S. Treasury bonds, we’ve sold them and we moved them to Europe and other countries,” he said.
Two points here–one small and one large:
The Bush regime has not even begun this military campaign and already it is botching it: There is now no chance to freeze and seize Venezuelan bank assets. Further, Venezuela is building alliances even as the US tears down its own. Presumably, the Bush people are too worried about impending criminal indictments to think about the planning for their next war. Which is very funny, though it does not bode well for success at all.
FTW emphasises the second point: This is the straw in the wind. Venezuela is pulling out of US investments from strategic necessity; is this the signal for others to pull out from economic advantage? FTW thinks so. They add:
Chavez, a sharp critic of what he calls “imperialist” U.S.-style capitalism, has often criticized foreign banks for the power they wield in international financial markets at the expense of poorer countries.
Chavez again proposed the creation of a South American central bank that would hold the foreign exchange reserves of all the central banks in the region.
“I’m ready right now with the Venezuelan central bank … to move $5 billion (euro4.15 billion) (of Venezuelan reserves), to a South American bank,” Chavez said.
I am not sure what to make of this. Astute propaganda surely. But is Chavez seriously proposing a new banking system outside the purview of US and European banking interests? Why not?–Venezuela does not stand to lose. Perhaps more important: Could it work? I don’t expect countries to be flocking to this, but it is an idea that may gain support over time, as the US collapses, depending on how much of Europe and Asia go down at the same time.
In any case, it is not something we will hear much about here in the States. It may be a hard story to follow.
The world is preparing to get along without us.