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Coping with Crisis, Latin America Bucks the System
As the U.S. economy tumbles into greater depths of disaster and ignominy--dragging the rest of the world with it--some countries in Latin America have decided it's time to strike out on their own.
At a Nov. 26 meeting in Caracas, barely mentioned in the U.S. press, the nations that make up Alba (the Bolivarian Alternative for the Americas) agreed to form a regional monetary zone. The idea is to immediately create a new accounting unit to be called the "sucre" (standing for Unitary System of Regional Compensation and also the name of a historical figure) and move toward adopting it as the legal tender. The financial ministers of the six Alba countries (Bolivia, Honduras, Nicaragua, the Dominican Republic, Venezuela, Cuba, with Ecuador) later met to begin technical studies.
Venezuela's finance minister, Ali Rodríguez, stated to the press, "When there's a crisis that has among its factors the weakness of the dollar--profoundly affected by extremely high levels of speculation--that means that other regions must seek their own solutions, and that's what is happening."
While proposals from Venezuela to reduce U.S. influence in the region are nothing new, the other countries at the meeting showed equal enthusiasm for paths that would enable them to get out from under the shadow of the now not-so-mighty dollar.
Honduran economic minister Pedro Paez affirmed "At a time when the international financial crisis creates a horizon of compression of traditional markets, we are creating new markets to guarantee the adequate flow of resources and defend employment in our countries."
Ecuador's president Rafael Correa, which is an "observer" to Alba, excoriated the dollar system. "Imperialism of the XXI century is no longer boots, no longer planes, no longer aircraft carriers, ships, or cannons. It's called 'dollars', that's how they seek to dominate us, and we've had enough of these pressures." Ecuador switched to the dollar in 2000 (last time I was there you bought your sancochos with Sacajawea dollars, which solves the mystery of whatever happened to the second failed attempt to circulate a woman's image on U.S. currency).
Other proposals to come out of the meeting include decreasing reliance on the International Monetary Fund and other U.S.-dominated international finance institutions (IFIs). The Group of 20 wealthy nations and President Bush have urged using these to bail out developing economies hard-hit by the same policies they promote.
"We're not going to wait here with our arms crossed for the World Bank or the International Monetary Fund to come and solve the problems that this great threat unleashed on the world," Chavez said at the Alba summit in Caracas. Although Chavez stopped short of calling for withdrawal from the IMF, both the IMF and the Inter-American Development Bank came under fire for placing political conditions on loans that limit countries' political options in dealing with the impact of the crisis.
Chavez also criticized the Andean Development Corporation, a regional bank made up of governments and private banks, for operating along the same lines. Chavez proposed strengthening the role of the Bank of the South, and pledged $500 million of Venezuelan funds to establish a regional "common monetary fund" for the region and asked other countries to commit portions of their reserves to back up economies in crisis.
Correa slammed "certain international bureaucracies" in reference to the IFIs and their legal apparatus. He was quoted in the Ecuadorean newspaper El Telegrafo saying, "As usual, they are accomplices to the lenders and exploiters of our country, but they will find a new Latin America, one full of dignity, that will know how to respond in case they try to blackmail us." Ecuador recently completed an audit of its foreign debt that shows that a large part of the debt was contracted illegally and under unfair terms. At the Alba meeting he got the support of the other six nations to face down the global financial system regarding payment of the illegitimate debt.
Experience shows that real results in building Latin American regional integration fall far short of the pronouncements. But the recent flurry of diplomatic activity--to be followed up by more meetings and a summit on Dec. 17 in Brazil--has an unprecedented urgency now: the result of not acting could be chaos.
The World Bank's "optimistic" estimate is for about 2% average growth in the region, while other estimates predict a slight contraction. This compares to an average 5% growth a year over the past five years. In countries where so many people live on the edge, a few points uptick in inflation or a couple of percentage points drop in GDP affects survival. This isn't a game of statistics.
The macroeconomic statistics, gloomy as they are, don't even show the worst of it. In the most unequal region of the world, some will suffer more than others--and some will make money off disaster hand-over-fist. Although a few major companies are taking mega-losses, it's the poor who feel the pain. In Mexico, the average real wage fell, as inflation ate up the tiny nominal rise. Currency devaluation has pummelled consumers reliant on U.S. imports, and over a quarter of a million jobs were lost in the third quarter. Central American countries are suffering a drop in remittances from family members working in the United States, strangling the many small businesses and family economies that depend on that money. Inter-American Development Bank analyst Santiago Levy says employment will come to a standstill in the region in 2009, announcing plans to divert $6 billion of Bank funds to address the crisis.
The international financial institutions are salivating at the prospect of lending massive amounts of money to rescue Latin American countries and restore indebtedness in the region. Many countries, sick of the neoliberal conditions placed on loans, have turned their backs on the IFIs in recent years and regional loan portfolios seriously dwindled. Crisis means new clients--unless the Alba plan and others like it take off.
No-one knows how far this declaration of independence from U.S. financial hegemony will ultimately reach. Or even what "independence" looks like, beyond cutting ties to the dollar system. The Alba group promotes a trade model called the Trade Agreement of the Peoples as an alternative to U.S. Free Trade Agreements. While the Central American members have the Central American Free Trade Agreement (CAFTA) with the United States, the other members have refused to sign FTAs.
The prospect of a unified Latin America that could finally stand up, not only to the U.S. but to the global financial system, appeals to global justice activists. But the truth is it's not just around the corner. Each step is hard and obstacles, from internal divisions to conflicting visions, abound.
Once again, though, a refreshing wind from the south has blown the dust off conventional "wisdom". For people in the United States who work to see the crisis open up real avenues for change, building alliances to help our southern neighbors who are doing the same thing makes a lot of sense.
- Posted in
126 Comments so far
Show Allbligh4
Venezuela needs to address their runaway inflation. No currency conversion will fix this.
There you go with that "gringo" comment again. I am sure it makes you feel better, but, to the rest of us, you just come off as a bitter old lady with an inferiority complex.
I feel sorry for you, my fellow blue passport holding gringa. Your life must be very full of misery.
I suppose that is good for your inferiority complexes.
Just don't look in the mirror....
The stink of "Rotting sour grapes?", "You folks"?, "blatant ignorance?" - trying to charm us all again, eh Serena?
Personally I like Chavez, he's a breath of fresh air in the hemisphere. I hope his Bolivarian revolution succeeds.
All together now...Jingo bells, jingo bells, jingo all the way...
signed,
Tar baby
bligh4
Wow serena, you got me there. Now if you could explain how the Venezuelan stock market went up on Black Monday because its reserves were in euros- when the euro wasn't created until 10 years after Black Monday? Quit a trick.
Serena--
You use "gringo" with the same frequency a Klansman uses "nigger" or a neocon uses "Islamofascist". Such juvenile name calling is beneath your latin sophistication and sensitivity.
Poet
She is not Latin, she is an American Citizen Gringa...
Bligh, you beat me to it. 36% inflation, and a budget predicated on $90 a barrel oil are not going to solve anything. Unless your plan is to become another Zimbabwe...
jonabark
We may catch up with the bolivar in lost value soon enough. I find myself increasingly interested in these issues but limited in my understanding. The economist Henry Liu thinks that the Oil/ US dollar connection is effectively undermining other economies. Can anyone suggest some non-US-patriot global economist who explains some of these things in layman's terms? Stiglitz?
This article seems to be talking about unfair and illegal loans, but that sounds like a different problem than currency issues. If there was a regional currency it seems like it would have to be very stable and resistant to inflation to provide a strong bargaining power against US currency and political pressures.
Why not turn to the EURO?
I think the idea of the Sucre goes along this lines....
Venezuela's oil and all the other export products will have to be paid in Sucres, no longer 'petro dollars' which continue to lose value due to the American downward economic spiral, which ultimately may end in a worthless dollar.
Why the Sucre and not the Euro ? ...perhaps they way to start their own Latina American Union of countries, much like the European one, with their own currency.
The US would LOVE to pay for oil in a devaluing local currency. Venezuela INSISTS on being paid in dollars or Euros, the US does not insist on paying in dollars. Venezuela does not do this because they love the dollar....
Unless you drive a fuel efficient vehicle and don't drive a lot, you're already giving your money to Hugo and shooting yourself in the foot. If you don't like Chavez, then throw away your gas guzzler and get a life.
Great point. "Liberty" is probably too embarrassed to admit it.
I ride a motorcycle. 52 MPG. Is that good enough?
What do you drive?
I don't drive since I lost my limbs and an arm in Vietnam but my wife drives a Honda and happily fills up at gas stations such as Citgo. Of course, she doesn't drive a lot so MPG even at 35 is not so relevant. Besides, you're one of the few getting a higher MPG but as long as you support Washington oversubsidizing gas guzzlers all the while slashing critical funding for public transportation, Hugo will be getting more money to keep you foaming at the mouth.
First of all, the Sucre was the name of the old Ecuadorian currency, before the conversion to the dollar. The general perception in Ecuador is that dollarization led to a sort of instant inflation in prices, especially in basic survival goods.
Unfortunately, this attempt to compete with the dollar is paired with a developmental model focused on export products like petroleum and petrochemicals, a model that may not be sustainable. For example, Correa and Chavez met last summer to enaugurate a new petrochemical factory to be built not far from the US base at Manta, soon to be shut down. Unfortunately, the new plant will be hogging the principle water supply for the region and possibly polluting it. The left and indigenous protested these moves and faced a pretty hostile reaction from Correa. For some reports I posted from Ecuador as these events unfolded, see www.phillipbannowsky.com.
For this comment you will now be roundly dammed by all of those here who have accepted Saint Huguito Chavez as their own personal Messiah....
You may, by the way, want to look up INFLATION rates in Ecuador BEFORE dollarization...
Someday everyone is going to have to stop blaming us for every problem in their country.
Chavez had plenty of money, but he wasted it. His country is in real trouble but because of their own policies and his leadership. We haven't done a thing there. Win or lose, its his baby.
Comparing Venezuela under Chavez, which is S.O.L. with low oil prices, since they basically produce nothing else, with CHILE, which has seen a similar or worse drop in copper prices is enlightening.
While Chavez was blustering and throwing money around like it was candy, the moderately leftist government of Chile was quietly saving all the extra money they were getting when copper was high. Now they have a $21 Billion "stabilazition fund", which is HUGE for a country of their size, and should weather this downturn better than any other resourse exporter in Latin America.
Not entirely true, friend Thomas. We did interfere by instigating and supporting the disastrous coup attempt on Chavez. And the Bush people, and those they represent, have made it quite clear that Venezuela is next, after Iraq and Afghanistan, on the hit list. My guess is that even now they're in-country trying to figure out a way to oust Chavez.
As for Chavez 'wasting' Venezuela's money, it may be only a matter of my opinion, but I would contend that trying to break up the ruling class and finally doing something to help the poor with agricultural reform, health care, housing, literacy, and political and indigenous rights - which is what he did with a lot of the money - is not wasting it.
"We did interfere by instigating and supporting the disastrous coup attempt on Chavez."
Thats what they claim...could be true, but it was a bump in the road anyway with no effect.
Chavez replaced the ruling class with his own bunch my friend. Most of their money has gone there and for arms. Show programs for the poor and only in the cities. Impressment in the countryside for the army. Food prices set so low that the farnmers are in trouble.
I believe you'll find soon enough what the truth is about Chavez. Many people support him and admire him for giving the US the proverbial finger, but the truth is, he's just another tin pot dictator. I know he was elected....so were many of the worst dictators. Though he does get most of the urban votes with bread and etc.
"Thats what they claim...could be true,"
Could be true? And if it is true, what's your opinion?
..."but it was a bump in the road anyway with no effect."
No Thomas, the effect was that once again the US is seen around the world as a corrupt bully that hates democracy. You don't think that will have any effect?
"Chavez replaced the ruling class with his own bunch my friend."
So does any and every government. He replaced a corrupt government with people he could trust to initiate his policies. What would you have him do, keep the same corrupt guys in office and let them sabotage his efforts to change his country?
"Most of their money has gone there and for arms."
This is somewhat hypocritical when the US spends, more on arms then most if not all the other nations in the world put together and threatens everybody that doesn't toe its line. We are also one of the biggest, if not the biggest, arm dealers in the world. Besides arms, the only other thing we export of any consequence is food. By the way, could you provide some numbers on how much Venezuela spends on arms or as a percentage of its gross domestic product? Or are you just guessing?
"Food prices set so low that the farnmers are in trouble."
Another good one. We in the US, of course, have no such troubles. Our economy is doing fine. Just ask your local family farmer what he thinks - if you can still find one.
"I believe you'll find soon enough what the truth is about Chavez. Many people support him and admire him for giving the US the proverbial finger, but the truth is, he's just another tin pot dictator. I know he was elected....so were many of the worst dictators. Though he does get most of the urban votes with bread and etc."
Imaginary threats of some impending doom of 'truth'. Chavez is admired in much of Latin America, though granted not in much of the US, not only for standing up to the US, but by doing something for somebody else in his country other than the ruling class. And he gets most of the rural vote as well. Why shouldn't the majority of Venezuelan people support him. We could probably learn the same lesson here - if we were open to learning anything from anybody else.
As for being a democratically elected 'tin pot dictator'. Some of us know all about that here in the homeland. Remember 9/11?
No Thomas, 9/11/1973 when the coup we instigated and assisted in killed Allende in Chile because as it is so often claimed - but never demonstrated - that he was another existential threat to the poor defenseless little ol' US of A. We paid the assassins and provided the weapons that killed Allende and put in Pinochet, a first class 'tin pot dictator' who killed and tortured thousands of his people. We did this simply because we didn't like the outcome of their election. The bottom line is you either respect democracy or you don't. We dont. Not internationally, not domestically.
Finally, who Venezuela elects is their business. We should have nothing to say about it and deal with its reality. The problem is many homelanders believe that everything in the world should be done for our benefit and if it's not, we have a right to do something about it.
By the way, did you visit the links I sent earlier and if so do you have any comment? You will find, I think, that the reason so many comparatively powerless countries may buy weapons is that the US is constantly on the prowl.
I'll just say lets see how Venezuela is doing in a year or so. Maybe I'm wrong. I don't think so (and I know this will stun you) but I'm not infallible.
"As for being a democratically elected 'tin pot dictator'. Some of us know all about that here in the homeland. Remember 9/11?"
Darn....got me there!
Finally, who Venezuela elects is their business.
Absolutely correct. Its just seeing those farmers suffering, seeing thiose kids impressed into military service....he has a lot of propaganda out there as far as I could see. We spent very little time in the city though.
"No Thomas, 9/11/1973"
We agree, but we are going to have to stop going back to the seventies or even Raygun's shenanigans eventually.
"the effect was that once again the US is seen around the world as a corrupt bully that hates democracy. You don't think that will have any effect?"
Very little. The reports of hating America except in certain parts of the world are vastly overstated. I don't find that around the world. (exception-I don't go to the middle east anymore)
"So does any and every government. He replaced a corrupt government with people he could trust to initiate his policies."
A good point.
"By the way, could you provide some numbers on how much Venezuela spends on arms or as a percentage of its gross domestic product? Or are you just guessing?"
The figure I remember was 4 billion in the NYT so be guided accordingly.
The GDP number I'm sure of, 1.8% as compared to the 4% we spend.
Serena, you're a pip. While I agree with your sentiments here, I find your approach frankly counterproductive to the cause. It's people like you (that is, abusive, insulting, arrogant, and dismissive - don't take my word for it, read your posts) who those 'reactionaries' you despise (remember them) can point to and say "there's one, she's a loon, therefore those who espouse what she does must all be loons." That technique should be familiar to you, it's the same one you use about white folks when you derisively call everybody who sounds 'white' to you an 'ignorant', 'arrogant', 'gringo' or a 'fascist', or a 'four-flusher', or well you get the idea.
The name calling, your scatter-shot abuse - particularly where you blame 'whites' for all the ills in the world, your absurd demands, a sadly obvious persecution complex (whether you feel so irrationally defensive because you're old, a woman, or a Native American), the unwarranted assumptions you make about others rather than just responding to what they write - all provide ample fodder for ridicule and a busy weekend psychiatric conference. If you want respect for the arguments you make, which often deserve respect, try changing your approach. Who knows, you might be able to make a point or two for your side.
signed,
tar baby
"I won't change a hair for you--"
Not for me, dear Serena, - you can do nothing for nor to me - but for you. Your childish insults only demean yourself and detract from what arguments you do have.
"You must be nuts."
Could be, but can't you at least frame an intelligent insult?
And of course you have a 'cause' - its Serena. Serena, Serena, Serena.
signed,
tar baby
"The reports of hating America except in certain parts of the world are vastly overstated"
http://pewglobal.org/reports/display.php?ReportID=252
Pew poll comparing attitudes about Americans since Bush took office all show a greater disapproval about US in selected countries. I think if they included most of Europe, the numbers would be comparable. You will note that those where the disapproval rating did not increase are our 'allies' or recipients of American largesse. Compare them with the polling about specifice like invasion of Iraq, etc. and you will find that people still like and respect America, but despise our actions in the world. Still, the overstatement is relative I suppose.
"The GDP number I'm sure of, 1.8% as compared to the 4% we spend."
So given the relative sizes of GDP and levels of military spending, you still think Venezuela is somehow a threat or out of line?
>>Chavez replaced the ruling class with his own bunch my friend. Most of their money has gone there and for arms. Show programs for the poor and only in the cities. Impressment in the countryside for the army. Food prices set so low that the farnmers are in trouble.
Can you cite sources please?
Their military spending PER YEAR is around 2 billion dollars. (2006)
For this he is condemned by America for starting an arms race in South America.
In the 1990s under a MILITARY DICTATOR whom the US supported Venezuela was spending more on arms then they are today. Chavez has in fact CUT overall Military spending.
I think Mr Mores issue is that Chavez buys arms from Russia rather then the United States .
http://oilwars.blogspot.com/2007/06/venezuelan-military-spending-busting.html
Percent of GDP spent on arms...less then 2 percent total. This spiked upwards last year as Venezuela modernizes her arm forces .
Unlike the United States of America, Venezuela has enemies on her borders and s superpower that has attempted to overthrow its Government and who has had members of its administration suggest Chavez be toppled.
Columbia, Chile and Mexico all spend more on arms as per the link above which uses the the Numbers from the reputable stockholm institute.
Actually he does by American arms. My problem with him is his country has so many other needs.
"Unlike the United States of America, Venezuela has enemies on her borders and s superpower that has attempted to overthrow its Government and who has had members of its administration suggest Chavez be toppled."
Thats correct. Poor guy, just an innocent.
And just for grins, lets suppose the US decided to invade, would his arms buying help him?
"Columbia, Chile and Mexico all spend more on arms as per the link above which uses the the Numbers from the reputable stockholm institute."
Considering the difference in population, are you surprised?
"In the 1990s under a MILITARY DICTATOR whom the US supported Venezuela was spending more on arms then they are today."
I think thats true and if you say so I'm sure it is, but that has nothing to do with now as far as I'm concerned.
For GwNorth and Tirebiter....I base my opinions on what I saw in country, so it could have seen a bad pocket, a bad region. Perfectly possible. I was told that the rest of the rural areas were about the same and I have no reason to disbelieve it. But I did not see them myself. I don't discount the possibility though.
WHO are the enemies on Venezuela's borders, and WHEN have they done anything threatening TOWARDS Venezuela? Be specific, please.
Columbia would be most appreciative if Venezuela would stop arming the FARCs, but has at no point, for example, moved tanks toward the Venezuelan border, or threatened war. Venezuela has, toward Columbia.
If something gets started between Venezuela and Brazil, it will not matter how much Chavez spends on outdated Russian weapons, the Brazilians will squash him.
That kind of narrows it down, unless you consider Guiana to be a serious military threat.
You have got to be kidding me. Liberty, who, according to the UN and every independent international organization, commits the majority of the violence in Colombia? The (not innocent) FARC or the right wing paramilitary network associated with Uribe and the US? Was the right wing paramilitary network (created by the US itself with right wing Colombians after the assassination of Gaitán? Was the FARC not created in response to attacks by this very network (you'd better check if you don't know) not itself created by an outside entity, the US? Who receives the most US military aid in the entire region, to the worse human rights violating government in the Western Hemisphere (run by a man with connections to death squads and drug runners that goes back decades, acknowledged by our government, has a cousin & dozens of his party members indicted because of connections to these groups, and whose former campaign manager was busted at a US airport with pounds of drug making materials)? Colombia. Most of what is claimed about Chavez's links to the FARC are overblown (read the actual report from Interpol where they say there has been evidence of tampering and that the laptops were held in opposition to international standards when uncovering evidence and the writing of Greg Palast on the matter, there is no evidence in those laptops that holds up to scrutiny), especially with how involved he is with hostage negotiations (see the gratitude released prisoners have towards his work), the links between the US government and the most violent and reactionary government in the region is well known and far bigger. More unionists are killed in Colombia annually than the rest of the world combined, opposition newspapers are shut down and when the president of Colombia wants to change the constitution to have more terms in office he doesn't hold it up for a vote that must be approved by a majority (like in Venezuela, which is why people are happiest there than any other country in the region with their democracy). No, in Colombia he has his party managers in government simply change the constitution. What does the press say about the grave threats to Colombian democracy and press freedoms? Not a damn thing. Do you, as a person concerned with "liberty", hold ALL governments to equal standards or are you a blatant hypocrite?
I provided a link to declassified US government documents, is there a verifiable paper trail that proves any definitive link between Chavez and the FARC? No, the laptop story was revealed, the difference in propaganda and fact, like usual, grew with the corporate press. The US has extensive and well known connections to the violent, right wing Colombian government and the right wing in Venezuela (who in 2002 attempted a coup to establish a military dictatorship, who ripped up the Venezuelan constitution that was voted on in a national referendum, dissolved all branches of government and the central bank). Is there anything comparable to THIS that you can uncover?:
http://www.zmag.org/znet/viewArticle/8583
"Some 88 Colombian paramilitaries were apprehended on Sunday May 9 at a ranch, El Hatillo, near Caracas, in Venezuela. These 88 were part of a larger group of 130 who had entered the country. According to the testimony of one of these captured Colombians, the group was training and preparing for yet another operation to overthrow the Venezuelan government."
"According to statements released this morning [May 9] by [Venezuelan Police] Commissioner Miguel Rodriguez, the terrorist plan consisted of attacking a military installation in Caracas this week, possibly the Urban Security Command of the National Guard. On Monday, the paramilitaries were to be taken to another ranch, where they would receive final training with arms and ammunition, and do the assault on Wednesday. "We were going to attack a military base that has tunnels underneath containing arms," said the presumed paramilitary. The purpose, according to one of the anti-Chavez "generals," was to steal arms from the base to give to a 3,000 strong paramilitary group who were to come to Venezuela in 8 days."
"Chavez had plenty of money, but he wasted it."
Oh really ??? So let me get this straight. Hugo uses the oil revenue to improve his country's infrastructure and you call that wasting it? God damn it, I voted against Dubya twice out here in El Paso while you probably cancelled my vote and helped him get another term. Name me one single country whose leader actually used the oil revenue to improve the country's infrastructure just like Chavez for Venezuela. Chavez was reelected in a landslide and he's actually improving the country. Let's see if your man Obama can come even close.
"His country is in real trouble but because of their own policies and his leadership."
His country is doing far better than this country despite your pathetic CIA trying to screw things up. I can see why you defended Obama's decision to keep Robert Gates as Secretary of War when folks such as Ray Mcgovern or even Chalmers Johnson proved to be better. It's people like you who give us good Texans a bad rap.
The trouble is, he did NOT use it on infrastructure, he threw it away buying influence and interfering in other countrys' affairs abroad.
At home, Caracas suffers almost daily blackouts, due to, guess what, lack of investment in the electricity grid, and PDVSA's output is falling (Venezuela does not even meet its OPEC production quota) due to the same lack of investment...
"he threw it away buying influence and interfering in other countrys' affairs abroad."
Hugo Chavez is no Dubya sir.
"Caracas suffers almost daily blackouts"
Not true. There was a brief blackout but that was only temporary.
And why should Venezuela listen to the corrupt OPEC system that got this country into the mess that we're in?
Care to comment on PDVSA production trends?
Yeah, we saw how well THAT worked today. Oil went under $40 a barrel, which mean the crud that your Messiah produces is even cheaper.
The rightwing lunatic that calls itself "liberty" should tell us its opinion on the meddlesome CIA. There's nothing in the U.S. that's going right anyway.
bligh4
Chavez has not so much invested in infrastructure as he has invested in his own popularity. The power grid, roads, bridges, sewers, ect continue to be seriously neglected.
Meanwhile he has his minions hand out free washers on election day....
JWVerez
Your suggestion that I voted for GWB is almost as insulting as the tone of the rest of your "post"
You obviously have not been there. Improving the infrastructure? I'm willing to bet my group oversaw the building of more bridges in the rural area than Chavez built in the whole country.
But let me say he has done some good things early on, the guy is not all bad for his country. But he wasted their greatest opportunity in 40 years. You will find they have little to show for all the cash thats come to them.
Its people like you that give Texans a reputation for speaking about things they obviously know knothing about.
And if you had any military experience or even logistical experience you'd know why keeping Gates was a good idea.
"Your suggestion that I voted for GWB is almost as insulting as the tone of the rest of your "post""
Oh really ??? Well, you're sounding more like you did. There's nothing insulting about my post and you know it !
"You obviously have not been there. Improving the infrastructure? I'm willing to bet my group oversaw the building of more bridges in the rural area than Chavez built in the whole country."
Maybe not but I've met plenty who've been there these past 3 years and they've seen more improvements than you'd see all over this state of Texas or for that matter the rest of this country. There's no improvement in this nation that you can discuss of the past 30 years so I wouldn't be complaining about Hugo if I were you.
"But he wasted their greatest opportunity in 40 years. "
Chavez wasn't in office for 40 years and why blame him when it was the previous leaders on the Far Right that wrecked the country to begin with. It's like blaming Clinton for Dubya and the idiots in Congress for destroying this nation.
"Its people like you that give Texans a reputation for speaking about things they obviously know knothing about."
I'm a real progressive god damn it and like myself, a lot of us in this state are sick and tired of you phonies who call yourselves "moderates" and you know it unless you weren't paying attention. You and I are not the same Texans. I may be a real progressive while you're trying to tell us to "accept" phonies. If it weren't for you screwed up rightwingers, our state of Texas wouldn't be a fucking disgrace that it is today. I'm a big fan of Texas pols such as Ralph Yarborough and Ron Paul. Who's your favorite Texas pol?
"And if you had any military experience or even logistical experience you'd know why keeping Gates was a good idea."
Excuse me but I went through hell in Vietnam as a veteran and I know why Gates was installed to begin with. If you even knew Gates, you'd already be ashamed at Obama for choosing status quo for building and exporting more nuclear wmds to rogue regimes even when this country strongly disapproves of it. Gates is nothing but a phony who just so happened to fill in Rumsfeld's position and he ain't much different so quit lying.
"only one person I know in Ecuador has a bank account"
You are most observant, for a Gringa.
Has it ever occurred to you that the problem may not be confidence in the DOLLAR, but rather a lack of confidence in Ecuadorian BANKS?
The US floods the world with dollars, that shit will hit the fan in due course. 10 trillion in debt with a deficit estimated of over 1 trillion for next year.
This compares to Venezualan debt sitting at what...20 percent of GDP?
Right now the Us is pulling every rabbit it can out of the hat trying to GET a wee bit of inflation. Deflation scares the beejesus out of those "maestros" who have manufactured this disaster.
Hey another 50 billion dollar fraud? Just print up money and pay off the investors. Chavez sends money to the poor and is called corrupt. In the USA that sort of money goes to the thieves...and it called "Capitalism".
Having wages drop, debt grow and prices drop is not BETTER then seeing wages grow debt shrink and prices climb.
this will give you a calm.,clear, account of the history of Dollar Hegemony ,, how it was artificially - unjustifiably imposed through manipulations to render the globe "subject" to american imperialism: thus a title of chapters of the long historical explanation was also about:
"DOLLAR HEGEMONY = US IMPERIALISM".
below are the initial paragraphs as the subject matter covered is VAST -- right down to details of which was which and who did what , these are things american capitalists will NOT want americans to know about.
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Jul 30, 2008
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CHINA'S DOLLAR MILLSTONE, Part 1
Breaking free from dollar hegemony
By Henry C K Liu
The vast expansion of US-led globalized trade since the Cold War ended in 1991 had been fueled by unsustainable serial debt bubbles built on dollar hegemony, which came into existence on a global scale with the emergence of deregulated global financial markets that made cross-border flow of funds routine since the 1990s.
Dollar hegemony is a geopolitically constructed peculiarity through which critical commodities, the most notable being oil, are denominated in fiat dollars, not backed by gold or other species since then president Richard Nixon took the US dollar off gold in 1971. The recycling of petro-dollars into other dollar assets is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973. After that, everyone accepts dollars because dollars can buy oil, and every
economy needs oil. Dollar hegemony separates the trade value of every currency from direct connection to the productivity of the issuing economy to link it directly to the size of dollar reserves held by the issuing central bank. Dollar hegemony enables the US to own indirectly but essentially the entire global economy by requiring its wealth to be denominated in fiat dollars that the US can print at will with little in the way of monetary penalties.
World trade is now a game in which the US produces fiat dollars of uncertain exchange value and zero intrinsic value, and the rest of the world produces goods and services that fiat dollars can buy at "market prices" quoted in dollars. Such market prices are no longer based on mark-ups over production costs set by socio-economic conditions in the producing countries. They are kept artificially low to compensate for the effect of overcapacity in the global economy created by a combination of overinvestment and weak demand due to low wages in every economy.
Such low market prices in turn push further down already low wages to further cut cost in an unending race to the bottom. The higher the production volume above market demand, the lower the unit market price of a product must go in order to increase sales volume to keep revenue from falling. Lower market prices require lower production costs which in turn push wages lower. Lower wages in turn further reduce demand.
To prevent loss of revenue from falling prices, producers must produce at still higher volume, thus further lowering market prices and wages in a downward spiral. Export economies are forced to compete for market share in the global market by lowering both domestic wages and the exchange rate of their currencies. Lower exchange rates push up the market price of commodities which must be compensated for by even lower wages. The adverse effects of dollar hegemony on wages apply not only to the emerging export economies but also to the importing US economy. Workers all over the world are oppressed victims of dollar hegemony, which turns the labor theory of value up-side-down.
In a global market operating under dollar hegemony, the world's interlinked economies no longer trade to capture Ricardian comparative advantage. The theory of comparative advantage as espoused by British economist David Ricardo (1772-1823) asserts that trade can benefit all participating nations, even those that command no absolute advantage, because such nations can still benefit from specializing in producing products with the lowest opportunity cost, which is measured by how much production of another good needs to be reduced to increase production by one additional unit of that good.
for the rest and other related articles - the history of capitalism itself, banking, finance, concepts of inflation, wage velocity, and other very involed subjects -- go to the link of
"The Complete Henry CK Liu" -- it is like going into a library that reveals the real story behind the facades of freedom , democracy and prosperity that lifts all boats boasted about by capitalists...
http://www.atimes.com/atimes/China_Business/JG30Cb01.html
===============below is a continuation of the above article - one of MANY exhaustive articles...that also show how the dollar "as fiat currency" is really a worthless piece of paper that is backed up by nothing - as part of the USA's schemes to maintain its global supremacy.
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This theory reflected British national opinion at the 19th century when free trade benefited Britain more than its trade partners. However, in today's globalized trade when factors of production such as capital, credit, technology, management, information, branding, distribution and sales are mobile across national borders and can generate profit much greater than manufacturing, the theory of comparative advantage has a hard time holding up against measurable data.
Under dollar hegemony, exporting nations compete in the global market to capture needed dollars to service dollar-denominated foreign capital and debt, to pay for imported energy, raw material and capital goods, to pay intellectual property fees and information technology fees. Moreover, their central banks must accumulate dollar reserves to ward off speculative attacks on the value of their currencies in world currency markets. The higher the market pressure to devalue a particular currency, the more dollar reserves its central bank must hold. Only the Federal Reserve, the US central bank, is exempt from this pressure to accumulate dollars because it can issue theoretically unlimited additional dollars at will with monetary immunity. The dollar is merely a Federal Reserve note, no more, no less.
Dollar hegemony has created a built-in support for a strong dollar that in turn forces the world's other central banks to acquire and hold more dollar reserves, making the dollar stronger, fueling a massive global debt bubble denominated in dollars as the US becomes the world's largest debtor nation. Yet a strong dollar, while viewed by US authorities as in the US national interest, in reality drives the defacement of all fiat currencies that operate as derivative currencies of the dollar, in turn driving the current commodity-led inflation. When the dollar falls against the euro, it does not mean the euro is rising in purchasing power. It only means the dollar is losing purchasing power faster than the euro. A strong dollar does not always mean high dollar exchange rates. It means only that the dollars will stay firmly anchored as the prime reserve currency for international trade even as it falls in exchange value against other trading currencies.
In recent decades, central banks of all governments, led by the US Federal Reserve during Alan Greenspan's watch, had bought economic growth with loose money to feed debt bubbles and to contain inflation with "structural unemployment", which has been defined as up to 6% of the workforce, to keep the labor market from being inflationary. Central banking has mutated from being an institution to safeguard the value of money so as to ensure wages from full employment do not lose purchasing power into one with a perverted mandate to promote and preserve dollar hegemony by releasing debt bubbles denominated in fiat dollars. (See Critique of Central Banking, Asia Times Online, November 6, 2002.)
Despite all the talk about globalization as an irresistible trend of progress, the priority for the United States in the final analysis has been to advance its superpower economic objectives, not its obligations as the center of the global monetary system. This superpower economic objective includes the global expansion of US economic dominance through dollar hegemony, reducing all domestic economies, including that of the US, to be merely local units of a global empire. Thus when the US asserts that a healthy and strong economy in Europe, Japan and even Russia and China, all former enemies, is part of the Pax Americana, it is essentially declaring a neocolonial claim on these economies.
The concept of "stakeholder" in the global geopolitical-economic order advanced by Robert B Zoellick, former US deputy secretary of state and now president of the World Bank, is a solicitation from the US to emerging economic powerhouses to support this Pax Americana. The device for accomplishing this neo-imperialism is a coordinated monetary policy managed by a global system of central banking, first adopted in the US in 1913 to allow a financial elite to gain monetary control of the US national economy, and after the Cold War, to allow the US as the sole remaining superpower controlled by a financial oligarchy to gain monetary control of the entire global economy.
With the help of supranational institutions such as the International Monetary Fund and the Bank of International Settlements, the US aims to negate national economic sovereignty with globalization of unregulated trade conducted under dollar hegemony. Unregulated trade globalization in the 21st century aims to neutralize national economic sovereignty to preempt national development financed by sovereign credit. Trade through export has become the sole operative path for national economic growth in a political world order of sovereign nation states that has existed since the Treaty of Westphalia of 1648. No national domestic economy can henceforth prosper without first adding to the prosperity of US-controlled global economy denominated in dollars.
Holy Dollar Empire
Echoing the Holy Roman Empire, the global economy has been operating as a global Holy Dollar Empire with the Federal Reserve as the Holy Dollar Emperor. Similar to the Holy Roman Empire, which disintegrated from the rise of Lutheran nationalism, this Holy Dollar Empire will eventually disintegrate from progressive centrifugal forces of a new populist economic nationalism. This new nationalism is not to be confused with regressive trade protectionism. The formation of the new Group of Five (G5 - China, Brazil, India, Mexico and South Africa) in the 2008 Group of Eight Summit in Tokyo (G8 - the US, UK, Germany, France, Italy, Japan, Russia and the European Union) is a sign of this new trend of progressive economic nationalism. The 2008 US presidential election may herald in a new populism in US history to reform the structure of US debt capitalism.
In his speech to the G5 leaders, China's President Hu Jintao said: "It is necessary to take into full account the issue of food security in tackling the challenges in energy, climate change and other fields." Apart from calling for the setting up of an UN-led international co-operation mechanism and a global food-security safeguard system, Hu said all countries should strengthen cooperation in grain reserves, a process of proven success in China but not recommended by the UN Food and Agriculture Organization, which views such scheme as a distortion of trade.
Liberation from this Holy Dollar Empire of dollar hegemony can only come from sovereign nations withdrawing from the global central banking regime to return to a national banking regime within a world order of sovereign nation states to put monetary policy back in its proper role of supporting national development goals, rather than sacrificing national development to support global dollar hegemony through wage-suppressing export-led growth.
Continued 1 2 3 4
The Complete Henry C K Liu
Strong yuan may be China's savior
(Apr 8, '08)
China's yuan, trade surplus climb
(Jan 15, '08)
1. If McCain were a Democrat ...
2. Bailout cure worse than disease
3. Snub for Iran eases nuclear crisis
4. Why do nations exist?
5. Pakistan feels the heat in Washington
6. The problems-solving Paulson package
7. India ripe for more attacks
8. Tehran seeks a new alignment
(24 hours to 11:59pm ET, Jul 28, 2008)
The Complete Henry C K Liu
Dec 18, 2008
Henry C K Liu was born in Hong Kong and educated at Harvard University, US, in architecture and urban design. His interest in economics and international relations started when he participated in interdisciplinary work on urban and regional development as a professor at the University of California Los Angeles, Harvard and Columbia. He is currently chairman of a New York-based private investment group.
Restoring China's national destiny
Different nations profess different destinies at different stages of their history, be it the Ottoman dominion's to maintain peace or that of the US to expand into Central America and the Pacific. Until China realizes that export based on low wages is a self-diminishing strategy, the country's destiny to be restored to its rightful position in the world will be held back. - Henry C K Liu (Dec 15,'08)
This is the fifth part of a continuing series
Part 1: Breaking free from dollar hegemony
Part 2: Developing China with sovereign credit
Part 3: History of monetary imperialism
Part 4: Gold, manipulation and domination
Beijing holds key to prosperity
China's best contribution to stabilizing the world economy is to develop the country's domestic market, raise earnings and pursue full employment - a strategy opposite to that being pursued in the United States. It should also cease importing dysfunctional economic systems such as predatory, neo-liberal, cowboy market capitalism. - Henry C K Liu (Dec 5,'08)
Denial amid the storm
It took more than a year for President George W Bush to belatedly acknowledge that the financial crisis resulting from decades of US irresponsibility is not merely a passing shower. Even then, the terms of his ideological surrender, bloated by self-deception, sought merely to perpetuate the causes of collapse.(Dec 4,'08)
Black hole gapes for pensions
Assets of public pension funds are crumbling - Calpers by 20% in its most recent quarter. Public employees now face having to contribute more towards their retirement schemes as the bankers responsible for the crisis that led to such losses are rewarded obscenely. - Henry C K Liu (Oct 30,'08)
Killer touch for market capitalism
The US government has predictably failed to jump-start credit and capital markets, failing to recognize that assets will stay illiquid until price adjustments bring about market transactions. Government monetization of illiquid assets will only prolong their illiquid life span. This approach risks the total destruction of market capitalism. - Henry C K Liu (Oct 29,'08)
This concludes a two-part series.
Part I: US government throws oil on fire
US government throws oil on fire
The US government, by continuing to misdiagnose the credit crisis, perhaps even purposely, has become part of the problem thanks to flawed responses backed by the people's money. On top of a trickle down of prosperity during the boom phase of the bubble in which wealth stayed mostly at the top, there will be a pouring down of the hot oil of loss on taxpayers. - Henry C K Liu (Oct 22,'08)
This is the first of a two-part series.
CHINA'S DOLLAR MILLSTONE
Gold, manipulation and domination
For China, the world's biggest creditor nation, to allow successful national development it must cease having its currency a derivative of the US dollar and stop relying on a US-dollar denominated trade surplus to finance domestic development. The historic role of gold and its manipulation tells it as much. (Oct 1, '08)
This is the fourth part of a continuing series.
Part 1: Breaking free from dollar hegemony
Part 2: Developing China with sovereign credit
Part 3: History of monetary imperialism
Too big to fail versus moral hazard
Alan Greenspan, when Federal Reserve chairman, noted that the US economy, "with its wide financial safety net, fiat money, and highly leveraged financial institutions, has been a conscious choice of the American people since the 1930s". The costs of that choice are coming headlong like a runaway freight train. (Sep 22, '08)
COMMENT
Friedman's misplaced monument
The University of Chicago's plans to establish a research institute commemorating economist Milton Friedman, whose now increasingly discredited influence shaped the world, are inappropriate. Opposition can help expose Friedmanite market fundamentalism as a device that rationalizes the exploitation of the many by a few the world over. More than money matters. (Sep 4, '08)
CHINA'S DOLLAR MILLSTONE, Part 1
Breaking free from dollar hegemony
China, by seeking growth through exports for US dollars, has trapped itself in a crisis-prone mismatch between domestic policies to assure sustainable growth and monetary policy dictated by dollar hegemony. Only sovereign credit can redress the numerous resulting problems, including a shortage of capital needed to develop its economy. (Jul 29, '08)
This is the first part in a two-part analysis.
CHINA'S DOLLAR MILLSTONE, Part 2
Developing China with sovereign credit
The privatization of China's public sector and opening of its financial sector to predatory global capital continues even as neo-liberals in the crisis-hit West clamor for government intervention. This is a con game China should not seek to emulate. (Sep 3, '08)
This is the second part of a four-part analysis
Part I: Breaking free from dollar hegemony
CHINA'S DOLLAR MILLSTONE, Part 3
History of monetary imperialism
Given US dollar hegenomy, China and Japan have little choice but to invest their export earnings in US Treasuries or other dollar-denominated assets. In consequence, China now lends to the US more than double the vast sums Washington lent to war-torn Europe in 1947 under the Marshall Plan. And the US is anything but war-torn. (Sep 25, '08)
This series will be continued
http://www.atimes.com/atimes/others/Henry.html
The mushrooming of industrial agriculture, especially sugar cane, in Brazil is largely responsible to rural exodus (urban problems), pollution, intense slave labor problems, abrogation of indigenous rights, loss of biodiversity, lies about sugar cane in Amazonia, GM crops, disregard for water sources as a human right ...
The export industrial model favored by WB and IMF, the profit driven model is no longer applicable in todays world. To support it is to deny a hidden history both old and current of abuses of natural resources that are limited, the sanctity of human life, the appaling record of industrial irresponsibility, immorality to a degree that it produces costs that can neither be borne nor corrected by humanity.
http://www.grassrootsonline.org/news/blog/new-report-agro-fuels-grassroots%E2%80%99-brazilian-partners
Perhaps we should not interfere in the internal affairs of a sovereign democracy like Brazil. For the first time in a century, they have had over a decade of low inflation and sustained growth, with a HUGE decrease in the poverty rate. Leave em alone, they are doing something right...
Amen!