Chavez: Venezuela Moves Reserves to EuropeSun Oct 2, 2005 18:4164.140.158.93
Chavez: Venezuela Moves Reserves to Europe
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=AP&Date=20050930&ID=5157487
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.
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.
Central bank officials could not be immediately reached for more details.
Chavez has also argued against central bank autonomy, saying excess foreign reserves should be spent on economic development projects.
Under his presidency, Venezuela's mostly pro-Chavez Congress changed central bank laws earlier this year so the government could tap reserves for spending, despite criticism that it would lead to devaluation of the local currency and higher inflation.
Every year the central bank must now compute an "optimum" amount of reserves and hand over the rest to a newly created national development fund.
Money held in the fund will be used for overseas purchases and to pay off outstanding debt.
Foreign exchange reserves held by the central bank stood at $30.434 billion (euro25.27 billion) as of Sept. 28, according to central bank data.
© 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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ATTACL PM ORAQ
THE REAL REASON WE ARE AT WAR!
http://www.apfn.org/apfn/iraq_reason.htm
TIME MAGAZINE NOVEMBER 13, 2000 - Page 34
FOREIGN EXCHANGE
SADDAM TURNS HIS BACK ON GREENBACKS
Europe's dream of promoting the euro as a competitor
to the U.S. dollar may get a boost from SADDAM HUSSEIN.
Iraq says that from now on, it wants payments for its
oil in euros, despite the fact that the battered
European currency unit, which use to be worth quite
a bit more than $1, has dropped to about 82 cents.
Iraq says it will no longer accept dollars for oil
because it does not want to deal "in currency of the
enemy."
The switch to euros would cost the U.N. a small
fortune in accounting paperwork changes. It would also
reduce the interest earnings and reparations payments
that Iraq is making for damage it caused during the Gulf War,
a shortfall the Iraqis would have to make up.
The move hurts Iraq, the U.N. and the countries receiving
reparations. So why is Saddam doing it? Diplomatic
sources say switching to the euro will favor European
suppliers over U.S. ones in competing for Iraqi contracts,
and the p.r. boost that Baghdad would probably get in
Europe would be another plus.
-By William Dowell/ New York City
====================================================================
Saddam Turns His Back on Greenbacks
By WILLIAM DOWELL/NEW YORK CITY
http://www.time.com/time/archive/preview/0,10987,998512,00.html
=================================================================
The Euro And The War On Iraq
By Amir Butler
ATrueWord.com
info@atrueword.com
3-29-3
http://atrueword.com/index.php/article/articleview/49/1/1/
As Mark Twain once noted, prophecy is always difficult, particularly
with regards to the future. However, it is a safe bet that as soon as
Saddam is toppled one of the first tasks of the America-backed regime
will be to restore the US dollar as the nation's oil currency.
In November 2000, Iraq began selling its oil for euros, moving away from
the post-World War II standard of the US dollar as the currency of
international trade. Whilst seen by many at the time as a bizarre act of
political defiance, it has proved beneficial for Iraq, with the euro
gaining almost 25% against the dollar during 2001. It now costs around
USD$1.05 to buy one Euro.
Iraq's move towards the euro is indicative of a growing trend. Iran has
already converted the majority of its central bank reserve funds to the
euro, and has hinted at adopting the euro for all oil sales. On December
7th, 2002, the third member of the axis of evil, North Korea, officially
dropped the dollar and began using euros for trade. Venezuela, not a
member of the axis of evil yet, but a large oil producer nonetheless, is
also considering a switch to the euro. More importantly, at its April
14th, 2002 meeting in Spain, OPEC expressed an interest in leaving the
dollar in favour of the euro.
If OPEC were to switch to the euro as the standard for oil transactions,
it would have serious ramifications for the US economy. Oil-consuming
economies would have to flush the dollars out of their central bank
holdings and convert them to euros. Some economists estimate that with
the market flooded, the US dollar could drop up to 40% in value. As the
currency falls, there would be a monetary evacuation by foreign
investors abandoning the US stock markets and dollar-denominated assets.
Imported products would cost Americans a lot more, and the trade deficit
would be magnified.
It is foreign demand for the US dollar that funds the US federal budget
deficits. Foreign investors flush with dollars typically look to US
treasury securities as a means of secure investment. With a large
reduction in such investment, the country could potentially go into
default. Things could turn very bad, very quickly.
In May 2004 an additional 10 member nations will join the European
Union. At that point, the EU will represent an oil consumer 33% larger
than the United States. In order to mitigate currency risks, the
Europeans will increasingly pressure OPEC to trade in euros, and with
the EU at that stage buying over half of OPEC oil production, such a
change seems likely.
This is a scenario that America cannot afford to see eventuate. The US
will go to any length to fend off an attempt by OPEC to dump greenbacks
as its reserve currency. Attacking Iraq and installing a client regime
in Baghdad may have a preventative effect. It will certainly ensure that
Iraq returns to using dollars and provide a violent example to any other
nation in the region contemplating a migration to the euro.
An American-backed junta in Iraq would also enable the US to smash
OPEC's hold over oil prices. The US or its client regime could increase
Iraqi oil production to levels well beyond OPEC quotas, driving prices
down worldwide and weakening the economies of the oil producing nations,
thus lessening their likelihood of abandoning the dollar. It would have
the short term effect of reducing the profits of domestic oil companies,
but the long term effect of securing America's economic hegemony.
The frequently offered canard of the Left that this war is being fought
to secure oil revenues for American oil companies may have some truth to
it. However, a more plausible explanation may be that the Bush
administration is waging war to protect the dollar and smash the OPEC
hold over international oil prices. It's a war whose purpose is bigger
than Halliburton or Exxon: it's a war being fought to maintain America's
position in the world.
Attending the 1992 Earth Summit in Rio, George Bush Senior told the
world that, "the American way of life is not negotiable". As cruise
missiles rain on Iraq, we are learning just how 'non-negotiable' that
way of life really is.
Amir Butler is executive director of the Australian Muslim Public
Affairs Committee (AMPAC), and writes for ATrueWord.com. He can be
contacted at abutler@atrueword.com.
MUCH MORE: http://www.apfn.org/apfn/iraq_reason.htm
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