Bloomberg News
Venezuela's oil accounts to dump the US dollar
Mon Sep 17, 2007 19:24
Venezuela's oil accounts to dump the US dollar
Submitted by cpowell on 12:14PM ET Monday, September 17, 2007. Section: Daily Dispatches
By Steven Bodzin
Bloomberg News Service
Monday, September 17, 2007
http://www.bloomberg.com/apps/news?pid=20601086&sid=aGBuWpZJ9cPI
CARACAS, Venezuela -- Venezuelan President Hugo Chavez instructed Petroleos de Venezuela SA, the state oil company, to convert its investment accounts from dollars to euros and Asian currencies to reduce risk.
The decision may help weaken the dollar as the Federal Reserve prepares to lower interest rates this week, said Philip Wee, an economist at DBS Bank Ltd. in Singapore. The currency has fallen against 14 of the 16 most-active over the past year, partly as governments signaled they may diversify their holdings away from the U.S., the world's primary destination for reserves.
Venezuela moved some of its reserves into euros last year, along with other oil producers including the United Arab Emirates, Kuwait and Qatar. The $50 billion Qatar Investment Authority said Sept. 4 it was looking for options in Asia to counter a weak dollar. China is starting a fund to look for higher returns on some of its almost $1.4 trillion holdings.
"Central banks will be switching more of the dollar into other currencies," said Wee, senior currency economist at DBS. "This should be another negative in a trend that's already set in the interest-rate outlook" and the Fed may lower borrowing costs to 4.75 percent by year-end from 5.25 percent, he said.
Chavez, speaking in his weekly address on national television yesterday, said the U.S. has bought goods from around the world, paying with paper that is "a bubble." The president said he instructed Energy and Oil Minister Rafael Ramirez to change currencies after the Fed increased the U.S. money supply to alleviate a shortage of cash sparked by concerns about debt backed by sub-prime mortgages.
The dollar traded at $1.3883 per euro at 7:20 a.m. in London from $1.3875 late in New York on Sept. 14. It reached $1.3927 on Sept. 13, the lowest since the single European currency was introduced in 1999. The dollar may weaken to $1.40 per euro by year-end, Wee forecasts.
The world's oil trading system has primarily used dollars for decades. Iran in July requested yen rather than dollars for all shipments to Japan, boosting that currency.
Petroleos de Venezuela had $23 billion in current assets, including $1.88 billion in cash, $848 million in restricted cash and $9.55 billion in accounts receivable, at the end of 2006, according to its audited financial statement. In addition, the company finances the national development fund known as Fonden, which held $27.3 billion as of May 11.
Chavez speaks frequently about the need to increase his country's independence from the U.S., which he calls "the empire." He has sought to diversify his country's customer base for oil by signing supply contracts with Japan and China.
Oil Minister Ramirez said Sept. 11 that Venezuela and China will work together on a $10 billion project to build six refineries and a shipping company to make Venezuela one of China's most important suppliers. Still, the U.S. continues to import 1.36 million barrels a day of crude and refined products from Venezuela, more than half its estimated 2.4 million barrels a day of output.
* * *
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The Silver Summit
Thursday-Friday, September 20-21, 2007
Coeur d'Alene, Idaho
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Sunday-Thursday, October 21-25, 2007
New Orleans, Louisiana
http://www.neworleansconference.com
* * *
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http://www.apfn.net/pogo25/L002I070810-moyer2.MP3
AUDIO RECORDED 8/10/07 PART III
BILL MOYERS JOURNAL: BUYING THE WAR
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Submitted by cpowell on 12:14PM ET Monday, September 17, 2007. Section: Daily Dispatches
By Steven Bodzin
Bloomberg News Service
Monday, September 17, 2007
http://www.bloomberg.com/apps/news?pid=20601086&sid=aGBuWpZJ9cPI
CARACAS, Venezuela -- Venezuelan President Hugo Chavez instructed Petroleos de Venezuela SA, the state oil company, to convert its investment accounts from dollars to euros and Asian currencies to reduce risk.
The decision may help weaken the dollar as the Federal Reserve prepares to lower interest rates this week, said Philip Wee, an economist at DBS Bank Ltd. in Singapore. The currency has fallen against 14 of the 16 most-active over the past year, partly as governments signaled they may diversify their holdings away from the U.S., the world's primary destination for reserves.
Venezuela moved some of its reserves into euros last year, along with other oil producers including the United Arab Emirates, Kuwait and Qatar. The $50 billion Qatar Investment Authority said Sept. 4 it was looking for options in Asia to counter a weak dollar. China is starting a fund to look for higher returns on some of its almost $1.4 trillion holdings.
"Central banks will be switching more of the dollar into other currencies," said Wee, senior currency economist at DBS. "This should be another negative in a trend that's already set in the interest-rate outlook" and the Fed may lower borrowing costs to 4.75 percent by year-end from 5.25 percent, he said.
Chavez, speaking in his weekly address on national television yesterday, said the U.S. has bought goods from around the world, paying with paper that is "a bubble." The president said he instructed Energy and Oil Minister Rafael Ramirez to change currencies after the Fed increased the U.S. money supply to alleviate a shortage of cash sparked by concerns about debt backed by sub-prime mortgages.
The dollar traded at $1.3883 per euro at 7:20 a.m. in London from $1.3875 late in New York on Sept. 14. It reached $1.3927 on Sept. 13, the lowest since the single European currency was introduced in 1999. The dollar may weaken to $1.40 per euro by year-end, Wee forecasts.
The world's oil trading system has primarily used dollars for decades. Iran in July requested yen rather than dollars for all shipments to Japan, boosting that currency.
Petroleos de Venezuela had $23 billion in current assets, including $1.88 billion in cash, $848 million in restricted cash and $9.55 billion in accounts receivable, at the end of 2006, according to its audited financial statement. In addition, the company finances the national development fund known as Fonden, which held $27.3 billion as of May 11.
Chavez speaks frequently about the need to increase his country's independence from the U.S., which he calls "the empire." He has sought to diversify his country's customer base for oil by signing supply contracts with Japan and China.
Oil Minister Ramirez said Sept. 11 that Venezuela and China will work together on a $10 billion project to build six refineries and a shipping company to make Venezuela one of China's most important suppliers. Still, the U.S. continues to import 1.36 million barrels a day of crude and refined products from Venezuela, more than half its estimated 2.4 million barrels a day of output.
* * *
Join GATA at these conferences:
The Silver Summit
Thursday-Friday, September 20-21, 2007
Coeur d'Alene, Idaho
http://thesilversummit.com
New Orleans Investment Conference
Sunday-Thursday, October 21-25, 2007
New Orleans, Louisiana
http://www.neworleansconference.com
* * *
Greenspan Defends Low Interest Rates
Former Federal Reserve Chairman Alan Greenspan tells Lesley Stahl he knew about abuses in subprime lending but failed to foresee their paralyzing market effects until late 2005. More...
http://www.cbsnews.com/sections/60minutes/main3415.shtml
BILL MOYERS JOURNAL: BUYING THE WAR
http://www.pbs.org/moyers/journal/blog/2007/04/preview_buying_the_war.html
AUDIO RECORDED 8/10/07 PART I
BILL MOYERS JOURNAL: BUYING THE WAR
http://www.apfn.net/pogo25/L001I070810-moyer1.MP3
AUDIO RECORDED 8/10/07 PART II
BILL MOYERS JOURNAL: BUYING THE WAR
http://www.apfn.net/pogo25/L002I070810-moyer2.MP3
AUDIO RECORDED 8/10/07 PART III
BILL MOYERS JOURNAL: BUYING THE WAR
http://www.apfn.net/pogo25/L003I070810-moyer3.MP3
IRAQ WAR INFO AND LINKS:
http://www.apfn.org/apfn/Iraq_war.htm
he Rules of War Has Changed
With over $100 Billion in annual revenues and 70000 employees in Iraq alone, the private military industry is booming, yet few civilians know anything about it. Shadow Company, a groundbreaking feature-length documentary, takes you deep inside this secret world that is changing the face of modern warfare. What are we really risking by allowing profit-motivated corporations into the business of war?
See Shadow Company and decide for yourself.
SEE MOVIE TRAILER:
http://www.shadowcompanythemovie.com/
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- Venezuela's oil accounts to dump the US dollar — Bloomberg News, Mon Sep 17 19:24
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