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from dollars to petro-euros in the news

It's the financial threat of Iran introducing a euro-based energy 
by Allen L Roland, Ph.D

Iran is Cheney's next target ( note , I did not mention Bush who is 
the cheerleader for the Cheney/Rumsfeld cabal ) and the reason Iran 
is next has nothing to do with a nuclear threat and everything to do 
with the financial threat of Iran introducing a euro-based energy 

Stay with me ~ this is high powered global gamesmanship and Ryan 
McGreal , Raise the Hammer, nails it in this short but most 
informative expose'.

Excerpt: " One of the major unstated reasons the United States 
invaded Iraq was to stop Saddam Hussein from trading oil for euros, 
which he had begun in 2000. Hussein actually made more money selling 
oil for euros, as the euro appreciated 17 percent against the dollar 
between 2000 and 2003. Other countries in the region, particulary 
Iran and Syria, began public musing about switching from dollars to 
euros around the same time.... All three countries were subject to a 
barrage of threats from the United States government, but only Iraq 
went through with the switch, and it was summarily invaded. One of 
the US government's first acts in Iraq was to switch oil sales back 
to dollars."

Allen L Roland

Iran in the Crosshairs 

By Ryan McGreal

08/24/05 "RTH" -- -- Starting in 2006, Iran will start up an "oil 
bourse", or a stock exchange for trading energy, that will be based 
on the euro, not the US dollar. While this may seem innocuous, it 
will be a grave risk to continued American global hegemony.

Petrodollar Hegemony

Today, most oil trading takes place on the New York Mercantile 
Exchange (NYMEX) and the London-based International Petroleum 
Exchange (IPE). Since the 1970s, the OPEC countries have all agreed 
to sell oil for US dollars only. This means every country that wants 
to buy oil must first acquire enough US dollars to buy what it needs.

Year after year, America imports much more than it exports. It must 
pay out that difference (its current accounts deficit) in dollars. 
Last year, the US ran a current accounts deficit of over $600 
billion USD; this year, it's expected to increase to $700 billion.

If there were no good reason for other countries to buy all those 
American dollars, then the dollar would decline in value until the 
US economy could no longer afford to import goods from abroad. This 
is what happens when other countries run large current accounts 
deficits over long periods.

However, the deal with OPEC means other countries have no choice but 
to buy all those excess American dollars, which props up the value 
of the dollar and allows the American "import economy" to go on year 
after year. Effectively, America's main export is US dollars, and it 
is absolutely imperative to preserve a captive market for those 
dollars among oil-consuming countries.

The continued viability of the US economy depends on it. Americans 
can still afford to consume because their economy is suffused with 
cheap imports; a falling dollar will raise the prices of imported 
goods. At the same time, Americans enjoy some of the lowest oil 
prices in the world, largely due to the petrodollar arrangement. 
This has skewed the American vehicle market toward gas-guzzling but 
profitable SUVs and light trucks.

Selling Oil for Euros

One of the major unstated reasons the United States invaded Iraq was 
to stop Saddam Hussein from trading oil for euros, which he had 
begun in 2000. Hussein actually made more money selling oil for 
euros, as the euro appreciated 17 percent against the dollar between 
2000 and 2003. Other countries in the region, particulary Iran and 
Syria, began public musing about switching from dollars to euros 
around the same time.

All three countries were subject to a barrage of threats from the 
United States government, but only Iraq went through with the 
switch, and it was summarily invaded. One of the US government's 
first acts in Iraq was to switch oil sales back to dollars.

Now, Iran plans not just to sell oil for euros, but to create an 
exchange market for parties to trade oil for euros. The oil bourse 
will provide a euro-based price standard, the way West Texas 
Intermediate crude (WTI) and North Sea Brent crude do today. To the 
extent that the balance of reserve holdings starts to shift from 
dollars to euros, that's very bad news for America's system of 
dollar hegemony.

Iran is taking a calculated risk that enough countries have an 
interest in a petro-euro market to contain American aggression. Many 
central banks are already quietly shedding their dollar reserves, 
nervous that America's economic fundamentals ($500 billion federal 
deficit, $700 billion current accounts deficit, $4.5 billion federal 
debt, record business and personal debts, zero savings) cannot be 
sustained for long, and hoping to insulate themselves from what they 
see as an inevitable recession. The US dollar has declined by a 
third against the euro since 2000, despite the petrodollar 

At the same time, Europe is eager to enjoy more of the "virtuous 
circle" that comes from supplying a major reserve currency: a ready 
market for its currency and guaranteed reinvestment as euro-holders 
plant their money in European markets. Vladimir Putin, Russia's 
president, has also expressed interest in switching from dollars to 
euros. Russia would benefit from getting paid in a stronger 
currency, and it would represent a political victory over America 
after fifteen years of watching its clients and assets in the oil-
rich Caspian region co-opted by American expansion.

Nuclear Politics

Iran may, indeed, be attempting to acquire nuclear weapons. However, 
it also has a "legitimate" interest in developing nuclear power, 
since its own oil reserves are already post-peak and it aims to 
continue in its role as an energy exporter. Iran is a signatory in 
good standing to the Nuclear Non-Proliferation Treaty (NPT) and has 
openly informed the International Atomic Energy Agency of its 
intentions as requried by the Treaty.

However, Iran's presumed attempt to acquire nuclear weapons is only 
the politically acceptable excuse for America's threats. The real 
danger is that Iran will lay down the foundation for a post-
hegemonic international energy industry in which America is merely 
one of many players. If Iran is, in fact, developing nuclear 
weapons, it is doing so to acquire a deterrent against exactly this 
kind of American encroachment.

Indeed, recent world events have only enforced the notion that a 
nation's successful efforts to acquire nuclear weapons confer 
respect and status, not the opprobrium it deserves. India, a growing 
economic power that possesses a nuclear arsenal and refuses to sign 
either the NPT or the Comprehensive Test Ban Treaty (CTBT), has just 
been rewarded for its efforts by US President Bush, who has agreed 
to "work to achieve full civil nuclear energy cooperation with 
India." This is a straightforward violation of the NPT, which 
forbids signatories from exchanging nuclear materials or support 
with non-signatories.

If Iran really is trying to acquire nuclear weapons, is it any 
wonder why? Look at the advantages that having nuclear arsenals have 
given to US allies India, Pakistan, and Israel, all of which have 
benefitted immensely from a playing field tilted in their favour by 
their ability to project devastating power. As official hysteria 
about Iran's intentions escalates in volume and intensity, remember 
the real force undermining the moral authority of the NPT: the big 
nuclear 'have' countries that still refuse either to apply the ban 
consistently or to take any meaningful steps of their own 
toward "general and complete disarmament" - ostensibly the NPT's 
ultimate goal.

Ironically, America originally invaded Iraq - a poor, defenseless 
country - partly to send a message to other oil producing countries 
not to rock the petrodollar system, but the real message for small 
countries is that they need to present a credible deterrent threat 
or risk being ignored and/or invaded.

Further Reading

From Petrodollars to Petroeuros: Are the Dollar's Days as an 
International Reserve Currency Drawing to an End? Strategic 
Insights, Volume II, Issue 11 (November 2003) 

Iraq, the Dollar and the Euro, Hazel Henderson, The Globalise, June 
02, 2003 

The Real Reasons for the Upcoming War With Iraq: A Macroeconomic and 
Geostrategic Analysis of the Unspoken Truth William Clark, January 
2003 (Revised March 2003, with Post-war Commentary January 2004) 

US Dollar Hegemony Has to Go Henry Liu, Asian Times, April 11, 2002

Allen L Roland is a practicing psychotherapist, author and lecturer 
who also shares a daily political and social commentary on his 
weblog and website He also guest hosts a monthly national radio 
show TRUTHTALK on Conscious talk radio

found at

Doomsday for the Greenback
Posted: 2006/01/04
From: uruknet

America's capital is not in Washington DC. In fact, it is not 
geographic location at all. It is the greenback, the epicenter of 
the global rule. The dollar is the cornerstone upon which the mighty 
pillars of empire rest. At the same time, the greenback is the 
greatest hoax in human history; a worthless scrap of paper buried 
beneath a mountain of debt.

A preemptive attack on Iran would "provoke other industrial nations 
to strategically abandon the dollar en masse" "in an effort to 
thwart the neoconservatives from pursuing their desperate strategy 
of dominating the world's hydrocarbon energy supply." William R. 
Clark "Petrodollar Warfare; Dollars, Euros and the upcoming Iranian 
Oil Bourse"

The Federal Reserve is the financial headquarters for the cartel of 
multinational banking establishments. The confederation of banks in 
the Fed underwrites the exploitative activities of the world's main 
industries and sets rates in a manner that best serves their 
objectives. This is how the bankers perpetuate the system of 
economic hegemony and apply the shackle of debt and dependence to 
the planet's most destitute countries. The Federal Reserve is every 
bit as critical to the maintenance of the empire as its political 
counterparts in Washington or its blood-brothers in the US Military. 
It is the largest of the empire's three gears; economic, political 
and military, which mobilize the might wheel of state terror.

If we look carefully at the Iraq war, the main financial 
institutions stood squarely behind the hostilities and did their 
best to create a hospitable economic environment for aggression. The 
Federal Reserve dropped the prime rate to a paltry 1.5% just 6 
months before the Iraq invasion to keep the American economy purring 
along while Bush dragged the nation to war. The bloody footprints 
for Iraq lead straight to the oak-panel doors of America's primary 
lenders even before they trail off to the bastions of America's 
energy giants.

There's a reason for this. The main impetus for the war was not 
petroleum, but greenbacks and the future of a currency that is 
underwritten by $8 trillion of debt. The only way to safeguard its 
dominance is to back up the listing dollar with boatloads of oil. 
And, that is exactly the plan.

The Capital of Empire

America's capital is not in Washington DC. In fact, it is not 
geographic location at all. It is the greenback, the epicenter of 
the global rule. The dollar is the cornerstone upon which the mighty 
pillars of empire rest. At the same time, the greenback is the 
greatest hoax in human history; a worthless scrap of paper buried 
beneath a mountain of debt. It is only through the skillful mix of 
politics, diplomacy, and brute force that the grand deception is 
maintained. As America's fortunes grow more tenuous, the probability 
of attacks on the dollar will increase exponentially. Even now, 
nations are conspiring to knock the dollar from its lofty perch and 
introduce a more equitable system.

At present, the greenback serves as the world's reserve currency, 
the main medium of exchange. This allows the US to stack up enormous 
debt while avoiding the pitfalls of skyrocketing interest rates or 
hyper-inflation. The $2 billion of borrowed wealth that props up the 
faltering empire every day comes primarily from the economic 
powerhouses Japan and China. This means that America's profligate 
spending is financed by the labor of some of the most poorly paid 
workers in the world.

Ironically, the massive trade deficit suggests that sweatshop 
workers in Kwantung Province are now bankrolled by the criminal 
occupation of Iraq.

Every greenback carries with it the accumulated weight of two 
centuries of war, slavery, and ethnic cleansing of Native Americans. 
It is the flaccid script that has fueled 50 years of covert 
activities, coup d'etats, and third-world death-squads. It churns 
through the arteries of the empire to the furthest most extremities 
where torture and abuse are carried out beneath the tri-colored 
standard. It is strewn across the empire like the myriad gulags that 
now speckle the planet. It is the heart of the beast; a venom-
pumping organ with arteries strung across the globe like the 
concertina-wire that surrounds Falluja, Samarra and Tal Afar.

Eventually the stately images of Lincoln and Washington will be 
stripped from the currency; replaced with the looming specter of 
Guantanamo's gun towers or the iconic figure of an Abu Ghraib 
prisoner, hooded in sackcloth, arms outstretched in Christ-like 
submission, wires draped from his hands and feet. These are the 
freshly minted symbols of the new realm, the republic of terror.

As the empire extends its withering grip to the world's last 
resource-centers, the dollar is coming under increasing scrutiny. It 
is the dollar that facilitates the perennial war and the vast 
expansion of military force; just as it is the dollar that binds 
together the constellation of American colonies that function 
exclusively in the interests of their Washington overlords. The 
asymmetrical warfare that is approaching will put the greenback 
squarely in the crosshairs; the weal-link in America's coat of mail.

Hugo Chavez knows this, as did Saddam; that's why he switched to the 
euro 6 months before "Shock and Awe". Now, Putin is trading oil in 
euros and Iran will open an oil bourse in petro-euros in March. For 
Iran, its actions are tantamount to a declaration of war. Already, 
America's proxy Israel has threatened to attack in March. Is it mere 
coincidence that that is the same month Iran's oil bourse is 
scheduled to open?

Of course, not. The empire requires a steady diet of petrodollars to 
maintain its gluttonous appetite for debt. If the oil-producing 
nations switch to euros, the dollar would freefall like a wingless 
gull and America would be trapped in a bottomless vat of red ink.

America's prodigious dept has made the war for the world's dwindling 
resources an existential struggle that makes a retreat from Iraq 
impossible. If America's debt is not propped up with oil the anemic 
dollar would crumble and the American economy would shatter like 

In William R. Clark's "Petrodollar Warfare; Dollars, Euros and the 
upcoming Iranian Oil Bourse", Clark outlines the problems the dollar 
faces if Iran proceeds with its plan to use a euro-based oil trading 
exchange. The new Iranian bourse would compete head-on with the New 
York Mercantile Exchange (NYMEX) and London's International 
Petroleum Exchange IPE) giving international buyers an option 
of "buying a barrel of oil $60 on the NYMEX or IPE or 45 to 50 euros 
via the Iranian bourse." Clark calls this the Federal 
Reserves "biggest nightmare" as it would precipitate a face-off 
between the dollar and euro and fundamentally change the dynamics in 
the world's largest market.

"In essence, the US will no longer be able to effortlessly expand 
credit via US Treasury Bills, and the dollars demand-liquidity will 
quickly fall." This will "challenge the hegemony currently enjoyed 
by the financial centers in both London and New York."

In other words; doomsday.

Clark also notes that "both Russia and China significantly increased 
their central bank holdings of the euro, which appears to be a 
coordinated move to facilitate the anticipated ascendance of the 
euro as a second world reserve currency." This would effectively end 
the petrodollars hegemony as the "monopoly oil currency".

The world is preparing for a seismic shift in the global power-
structure, but Washington believes it can forestall the change 
through military force.

This threat of the nascent Iranian oil-exchange greatly increases 
the likelihood of a unilateral attack by the US. Clark anticipates 
that this may "provoke other industrial nations to strategically 
abandon the dollar en masse""While central bankers throughout the 
world community would be extremely reluctant to 'dump the 
dollar'" "They would likely move in tandem on the currency exchange 
markets in an effort to thwart the neoconservatives from pursuing 
their desperate strategy of dominating the world's hydrocarbon 
energy supply."

Some variant of Clark's scenario will undoubtedly transpire pending 
an American attack on Iran. The world will not confront the empire 
militarily, but neither will they stand idly by while vital oil 
resources are put at risk. A coordinated assault on the dollar is an 
extreme, but probable consequence.

The vulnerability of the dollar, skittering atop an ocean of red 
ink, has become the Achilles heel of the empire. Washington may 
believe that its weakness is well-concealed behind a wall of high-
tech weaponry and media propaganda, but potential adversaries will 
certainly know where to strike if they are forced to respond.

America's future has grown increasingly uncertain because of the 
reckless militarism of its leaders. An attack on Iran is certain to 
incite an asymmetrical war that will target the greenback; 
dislodging it from its lofty perch.

When the dollar collapses, the baling-wire of economic coercion that 
keeps the empire sewn together will quickly unravel.

Courtesy and Copyright  Mike Whitney 

found at

by Stephen Lendman Thursday, Jan. 12, 2006 at 10:19 AM
A review of the Bolivarian Revolution achievements and threat to 
Hugo Chavez from the U.S


Venezuela today, under its democratically elected President, Hugo 
Chavez Frias, is imbued with the spirit of Bolivarianism and his 
Bolivarian Revolution. It's based on the vision of Simon Bolivar, 
the Caracas born 17th and 18th century general who defeated the 
Spanish, liberated half of South America and believed in the 
redistributive policies that characterize the Chavez government. It 
also hopes to overcome what Bolivar perceptively characterized as 
the imperial curse "to plague Latin America with misery in the name 
of liberty." 

Chavez and his Movement for the Fifth Republic Party (MVR) have 
created the beginnings of a mass social and political revolution 
based on participatory democracy and social justice. In a nation in 
which 80% of the people are poor by any measure, Chavez is a 
populist hero with mass public support outside the minority middle 
and upper classes and business interests. He openly proclaims his 
desire and intent to transform Venezuela into a nation based on 
democratic socialism as an alternative to its capitalist past. In 
fact, however, his policies are more gradualist and closer to the 
European style social democracy than a textbook type socialist 
state. And since he took office, the private sector is a larger 
percent of the total economy than before his election, although 
Venezuela's oil company, Petroleos de Venezuela SA (PDVSA) and 
backbone of the economy, is state owned. Nonetheless, instead of 
previous governments' policy of recycling the nation's petrodollars 
to the U.S., Chavez is using them to grow the Venezuelan economy and 
fund his social programs. It's little wonder he engenders the great 
displeasure of the Bush administration intent on stopping him. It's 
already tried to do it 3 times and failed. 

Chavez was first elected in December, 1998 with 56% of the vote and 
began his presidency in February, 1999. From the start, he began 
working to implement his vision by fulfilling one of his campaign 
promises to hold a nationwide referendum. This was done to let the 
people decide whether to convene a new National Constituent Assembly 
to draft a new constitution that reflected Chavez's political 
ideology. It passed overwhelmingly and was followed 3 months later 
by elections to the Assembly to which members of Chavez's MVR and 
selected allied parties formed the Polo Patriotico or Patriotic 
Axis. It won 95% of the seats enabling Chavez and his allies to 
draft the new 1999 constitution that changed the country's official 
name from Venezuela to the Bolivarian Republic of Venezuela and set 
the nation on its new and revolutionary course. 

The new constitution was put to a nationwide vote in December, 1999 
and overwhelmingly approved. It took effect one year later and 
established the foundation and legal basis for President Chavez to 
move ahead with his desired structural changes for political, 
economic and social justice. A key provision of the new constitution 
(in Articles 83 - 85) mandated quality health care as a "fundamental 
social right and...responsibility of the guarantee improve the quality of life and common welfare." It proposed 
doing it by establishing and administering a national public health 
system proscribed from being privitized. The constitution also 
banned discrimination, established the principle of participatory 
democracy for all Venezuelans, guaranteed free speech and the rights 
of the indigenous population, and mandated that the government make 
quality education available to all as well as housing and an 
improved social security pension system for seniors. 

Chavez gained traction to begin implementing his policies in the 
elections held in July, 2000 for the new constitutionally mandated 
and less powerful unicameral National Assembly in which the Chavez 
coalition won a two-thirds majority. Chavez himself ran for a new 6 
year term (instead of the 4 year one under the former constitution) 
and was reelected with 60% of the vote. This victory gave Chavez and 
his government a mandate to move ahead with his plan to transform 
the nation in the ways explained below. 


Democracy literally means government by the people. It's the rule by 
and for common, ordinary people to insure the rights of the 
majority. In Venezuela, Bolivarian Circles reflect that spirit 
through direct volunteer public participation in the democratic 
process. Articles 166 and 192 of the new constitution establish 
citizen assemblies as a constitutional right to let people to fight 
for their rights. They allow ordinary people the right to 
participate in governing along with their elected officials. Founded 
as a result of a presidential call for them, these Circles in 2003 
had over 2 million members. Many Circle activities are currently 
taken up by the various Misiones (Missions) that now comprise the 
heart of the government's social programs. The Circles though play 
an important part in administering Mision programs in the 
communities and neighborhoods. They're autonomous and function 
independently of political parties with government support but no 
direct government funding. Their purpose is to defend the Bolivarian 
Revolution and its constitution primarily on a local level. They 
also encourage and support people with common interests to organize 
through cooperatives, associations, committees, neighborhood groups 
and other formations to be partners with their elected officials in 
the political process and help form the policies that directly 
affect their lives and well-being. 

Bolivarian Circles have included community and labor leaders working 
cooperatively with the usual disenfranchised people on local issues 
of providing health care, education, feeding the hungry, helping 
small business and much more. In addition, President Chavez 
implemented Plan Bolivar 2000 to allow the President authority to 
mobilize the Venezuelan Armed Forces to be used in poor areas of the 
country to provide health care, food, construction equipment, school 
tutoring and other services to those most in need. 

The Chavez government is also promoting the spirit of cooperation 
further by encouraging privately owned companies to allow employees 
more direct say in and control over company operations in return for 
the government providing added working capital. Under the Chavez 
plan, companies agreeing would include workers on their boards and 
share profits with employee cooperatives. So far, almost 200 mostly 
small companies in need of financial help have voluntarily agreed to 
adopt this co-management plan, and the government hopes to attract 
many more. 


The Bolivarian Revolution has significantly improved the lives and 
welfare of the Venezuelan poor, the great majority of the population 
and Chavez's base of support. They include a broad array of vital 
and innovative social programs called Misiones (or Missions) that 
include health care, education, food, housing, land reform, job 
training, micro-credit and more. The Chavez government has used its 
considerable oil profits and increased tax revenue to fund these 
programs. In 2004 state oil profits were $25 billion because of high 
oil prices and are likely much higher in 2005 as prices continued to 
rise and are still high. Many oil analysts, in fact, see continued 
high demand for a shrinking supply of world oil likely to keep 
prices for this commodity high and eventually go much higher. If so, 
Chavez will get the revenue he needs to continue and expand what he 
calls a "new socialist revolution." Some of its elements - the 
important missions - include the following: 

--Mision Bario Adentro (Mission Inside the Neighborhood) 

This is a series of initiatives deployed in 3 distinct stages to 
provide free, comprehensive and high-quality community health and 
dental care in hospitals and clinics (aided by 20,000 Cuban 
doctors). More than 500 centers providing medical care have been 
built, all of them well equipped for the job. This mission also 
provides preventative medical help and advice to the millions of 
poor people in the shantytowns and barrios. It also links health to 
the economy, good nutrition, food security, culture, sports, 
education, and the environment and stresses the importance of the 
participation of local organizations and doctors living and working 
in the same communities. 

--Mision Mercal 

This program provides access to high quality produce, grains, dairy 
products and meat at affordable prices. It also provides the poor 
with better access to nutritious, safe, organic locally and 
nationally grown foods as well as attempting to increase Venezuela's 
food sovereignty. 

--Mision Robinson I 

This mission uses volunteers to teach the poor to read and write. In 
2004 it had raised the literacy rate to an impressive 99% of the 
population having so far enrolled nearly 1.4 million people, nearly 
1.3 of whom have successfully completed the program. In the 
Americas, only Venezuela and Cuba have virtually eliminated 
illiteracy. In the U.S., the Department of Education estimates that 
over 20% of the population is functionally illiterate. 

--Mision Robinson II 

This mission was a continuation of Mision Robinson I and seeks to 
consolidate the literacy rates achieved as well as provide primary 
education in other areas. It has enrolled 1.2 million people and 
graduated a large majority of them with an elementary school 

--Mision Ribas 

This program at nearly 29 thousand education centers around the 
country provides a high school education to Venezuelans of all ages 
enabling them to receive a high school equivalency degree. 
Enrollment has reached nearly 1.5 million. 

--Mision Sucre 

This mission provides access to higher education to all Venezuelans 
with a high school or equivalency degree. It has enrolled nearly 
275,000 people in various university level programs, and since 1999 
has established 5 new universities. Unlike in the pre-Chavez era, 
education now is completely free through the university level and 
has been a boon to school enrollment. 

--Misiones Guaicaipuro and Habitat 

The purpose of Mision Guaicaipuro is to restore communal land titles 
and human rights to the country's poor and indigenous peoples as 
well as defend their rights against resource and financial 
speculation by dominant business interests. It's run by the Ministry 
of Environment and Natural Resources and has become the nation's 
largest organized social movement. This program has led to the 
establishment of over 5,000 land committees representing 5 millions 
Venezuelans (20% of the population). 

Urban Land Committees (CTUs) and the law allowing their creation 
stipulate that Venezuelans who live in homes they built on occupied 
land (the case for nearly all the poor) may petition the government 
for title to the land. This policy affects up to 60% of the 
population, and, for the first time ever, has given the poor in the 
barrios the legal right of ownership of the land they live on. 
Through mid-2005, 84,000 titles have been issued to 126,000 families 
benefitting about 630,000 people. However, this is just a modest 
beginning affecting about 6% of the barrio population. 

Through this program, the Chavez government believes it's repaying a 
social debt to the poor barrio inhabitants, who in the past 50 years 
have built more homes (on occupied land) than the government. 
Granting them titles to this land is the government's way of 
recognizing and legalizing their contribution to Venezuelan society. 
This right is written into the new constitution (Article 82), and 
the program relieves the government of much of its responsibility to 
build public housing for the poor to help relieve a severe housing 

Along with granting land title to the poor who have built their own 
homes, Mision Habitat is the government's other initiative to help 
provide public housing for the poor without homes. Its goal is to 
build thousands of new and free housing units and develop integrated 
housing zones that provide access to all social services including 
health care and education. 

--Mision Vuelvan Caras (Turn Around) 

This is a cooperative program between the people and the government 
and is intended to transform the country socially and economically. 
It's involved in training workers to give them needed skills for 
future employment. Its main objective is a nation more focused on 
social needs and achieving a higher standard of living for all 


It's not hard to understand why Hugo Chavez currently has the 
highest approval rating of any president in the Americas - 77% based 
on the latest polling numbers. His government's social programs 
explained above are providing vital services for the millions of 
poor that they never had before. And to make those programs possible 
the economy is performing very well. 

In the 28 years before Chavez was elected, Venezuelan per capita 
income fell 35%, the worst decline in the region and one of the 
worst in the world. Since the Chavez government took office in 1999, 
the decline has been halted and per capita income has been flat 
through early 2004. It likely has risen since then as a result of 
the significant economic growth since late 2003. Venezuela's 
National Institute of Statistics (INE) reported that in 2004 the 
economy grew by 17%. It then expanded by 7.5% and 11.1% respectively 
in the first two quarters of 2005 and about 10% in the third 
quarter. This was a major turnaround from the period preceding it 
that included the crippling oil strike of 2002-03 and the 
destabilizing effects of the short-lived coup deposing President 
Chavez for 2 days in April, 2002. During this period of growth, 
unemployment dropped from 14.5% in September 2004 to 11.1% one year 
later. Poverty levels also fell, and these data don't include the 
enormous benefits to the poor from Chavez's social policies that 
have significantly improved their lives and welfare. 

Chavez's ability to fund his Missions has been greatly aided by the 
sharp rise in oil prices since 2002. Venezuela is one of the world's 
leading oil producers and exporters and has the largest hydrocarbon 
(oil and gas) reserves in the Western Hemisphere and the largest 
known reserves in the world outside of the Middle East. Since 
conditions stabilized following the aborted coup, the economy grew 
by 17% in 2004 and over 9% (quarter over quarter) in the first 9 
months of 2005. This was the fastest growth in the hemisphere. 

The government has also managed to increase the taxes it collects, 
even during the difficult oil strike causing a deep recession in 
2003. It's done it by requiring both foreign and domestically owned 
companies to pay the taxes they owe. Venezuela's Oil Ministry is 
currently seeking additional tax payments it believes the nation is 
entitled to receive and will ask the National Assembly later this 
year to raise the income tax rate from 30% to 50% on 4 foreign owned 
heavy oil projects in the Orinoco river basin. These projects 
account for a fifth of Venezuela's total oil production. In 2004, 
the government renegotiated service agreements 3 of the 4 foreign 
owned oil companies had with state owned PDVSA. Only ExxonMobil so 
far has declined to go along. Under new joint venture terms, foreign 
oil companies are limited to a minority 49% stake, reserving 
majority ownership for PDVSA. These new agreements became effective 
on January 1. 

In another move just announced that won't please the U.S., the 
Venezuelan Central bank approved using the euro to diversify away 
from the U.S. dollar. This move will allow the monetary authorities 
to make payments and purchases in euros as freely as with dollars 
and help the country reduce its dependence on the U.S., one of 
President Chavez's goals. 

The revenues from high oil prices and taxes collected have helped 
the government run a budget surplus while maintaining a high level 
of social spending. Currency controls imposed in 2003 have also 
stemmed capital flight, and now by approving the use of the euro, 
Chavez is taking one more step toward asserting the independence and 
sovereignty Venezuela seeks and deserves. As a result of these 
efforts, the nation's public and foreign debt are moderate, and over 
$30 billion of reserves have been accumulated, and are likely 
rising, that can be used as a buffer if oil prices fall. 


Hugo Chavez is pursuing his own alternative plan to U.S. led 
neoliberalism that promotes economic policies benefiting corporate 
interests but at the expense of ordinary people, especially in 
developing nations. He calls it ALBA - the Bolivarian Alternative 
for the Americas. It's aim is bold and innovative and in direct 
contradiction to the so-called "free market, free trade" agenda 
followed by the dominant developed nations (the Global North) 
especially the Triad nations - the U.S., European Union and Japan. 

ALBA's goal is to achieve a process of comprehensive integration 
among Latin American nations with the aim of developing "the social 
state" to benefit ordinary people, not the privileged elite. At its 
heart, it's based on the principles of complementarity (not 
competition), solidarity (not domination), cooperation (not 
exploitation) and respect for each nation's sovereignty free from 
the control of other nations and large corporations. Venezuela has 
recently joined with Brazil, Argentina, Paraguay and Uruguay in the 
Mercosur trading alliance that should strengthen ALBA further and 
increase the overall benefits of regional trade for the 5 
participating nations and others being encouraged to join with them 
like Bolivia. 

The trade agreements already adopted, like NAFTA, and those proposed 
like the FTAA and the Triad nation proposals and framework agreement 
at the just concluded so-called "Doha round" sixth WTO Ministerial 
Conference in Hong Kong only do the opposite. They serve the 
interests of giant transnational corporations in the Global North. 
The Hong Kong "agreement" left most major issues unresolved, and no 
important concessions were made to the developing nations. This is 
just the latest betrayal of promises made to the Global South and 
will be devastating to those nations bullied to accept it. 
Negotiations will now be continued at WTO Headquarters in Geneva in 
secret, but little further progress is expected. Twelve years of 
NAFTA have left carnage in Mexico, and WTO mandated current trade 
practices (especially in agriculture and services covered under 
GATS) and IMF and World Bank instituted structural adjustment have 
caused growing poverty and human misery throughout the developing, 
overexploited world. To help eliminate or at least reduce this 
extreme inequity and improve the lives of ordinary people throughout 
Latin America, President Chavez has proposed his revolutionary ALBA 

ALBA is based on participating nations uniting in solidarity for the 
benefit of empowering their people, providing essential goods and 
services, achieving real economic growth at the grassroots and thus 
improving the lives of ordinary people and hopefully eliminating 
poverty. A key feature of the plan is the exchange of goods and 
services outside the usual international banking and corporate 
trading system. One example of this has been the exchange of 
Venezuelan oil and building materials to Cuba paid for in kind by 
Cuba sending 20,000 doctors to work in medical clinics and hospitals 
in the barrios as well as staffing literacy programs to teach 
Venezuelans to read and write. Venezuela is also currently 
negotiating an ALBA-type agreement with Argentina to trade its oil 
for Argentine cattle and dairy products. In both examples, no hard 
cash or currency changes hands. Participating nations can either 
trade with each other in these barter-like transactions or purchase 
with currency at reduced and affordable prices. Both parties in the 
transaction gain and their people reap the benefits. 

Hugo Chavez has been at the epicenter of this innovative change and 
is enlisting support of other leaders in the region to join with 
him. Discussions have been held about establishing a Bank of the 
South to finance real development without the burden of debt. Also, 
innovative programs are being created in agriculture, health, 
education, energy security and more to overcome the problems created 
by decades of structural adjustment and corruption and centuries of 
colonization. At the recent Summit of the Americas, Chavez proposed 
an Alliance Against Hunger and Poverty plan and offered $10 billion 
dollars over the next decade to finance it. 

For ALBA to succeed it will have to overcome major obstacles. The 
Bush administration will not sit idly by and just watch a 
continental restructuring take place that will harm U.S. corporate 
interests. For the U.S. and its corporate allies, Hugo Chavez poses 
a significant threat to their welfare. They will certainly try to 
overcome it by any means necessary as they have done many times in 
the past successfully, but so far, 3 unsuccessful attempts to unseat 

Despite clear U.S. intent and a Venezuela - U.S. power mismatch, 
don't write a Chavez obituary just yet. His Bolivarian spirit is 
spreading and may become too much to counter even for the colossus 
from el norte. One view of things comes from Yale Senior Research 
Scholar Immanuel Wallerstein in his February, 2004 Nation Magazine 
article. In it Wallerstein expressed his belief that "neoliberal 
globalization has had its day; it is now dead." Despite the 
inconclusive results from Hong Kong that hadn't yet taken place, 
Wallerstein believes the old system of all "take" and no "give" by 
the Global North is over. "It was more or less buried at Cancun in 
September, 2003", he wrote. For the South to open its markets to the 
North, it will now demand the North reciprocate. A key goal of 
Chavez's Bolivarian Revolution is to assure that happens. 

It should be noted that Venezuela was chosen as the site for the 
sixth World Social Forum as well as the second Social Forum of the 
Americas to be held in Caracas the week of January 24 - 29, 2006. 
These 2 events, which organizers hope to repeat annually, draw many 
thousands of attendees and many noted progressives and activists. As 
they grow in popularity, as the World Social Forum has been doing, 
they may also serve to help the Chavez government consolidate and 
expand his Bolivarian Revolution and encourage other developing 
nations in Latin America and elsewhere to begin their own. 


Destabilizing and overthrowing foreign leaders and governments it 
opposes is nothing new for the U.S. Ever since the National Security 
Act of 1947 established the Central Intelligence Agency (and 
National Security Council - NSC) replacing the disbanded wartime OSS 
intelligence agency, the CIA has engaged in activities far beyond 
information collection and analysis. It's been involved many times 
in covert efforts supportive of U.S. foreign policy to include 
regime change in nations whose leaders were not subservient to U.S. 
interests. Beginning in 1953, CIA operative Kermit Roosevelt, 
grandson of Theodore Roosevelt and cousin of Franklin, successfully 
engineered a coup against Prime Minister Mohammad Mossadeq of Iran 
after he nationalized the Anglo-Iranian Oil Company following a 
dispute about revenue sharing. The CIA then helped carry out another 
successful coup ousting President Jacobo Arbenz in Guatemala in 1954 
because of his modest land reform program the giant United Fruit 
Company in the country opposed. Since then to the present, this 
agency has had a long and tainted record of helping to destabilize 
and topple those governments the U.S. wishes to replace. Much of 
that has occurred in Latin America, most often by coup or 
assassination often disguised as an "accident" (like 
an "unfortunate" plane crash). 

Investigative journalist and author Eva Golinger has uncovered top 
secret CIA documents, obtained through Freedom of Information Act 
(FOIA) requests, of U.S. involvement in the April, 2002 two day 
aborted coup temporarily ousting President Chavez. It involved CIA 
complicity and an intricate financing scheme beginning in 2001 
involving the quasi-governmental agency National Endowment for 
Democracy (NED), funded entirely by the Congress, and the U.S. 
Agency for International Development (USAID). These agencies, in 
turn, provided funding to Chavez opposition groups (USAID through 
its Office of Transition Initiatives - OTI) which, in turn, were 
involved in staging the mass and violent street protests leading up 
to and on the day of the coup. NED and USAID also funded other 
destabilizing activities such as the crippling oil strike in late 
2002 and 2003 and the August, 2004 recall referendum that failed to 
unseat the President. The documents Golinger obtained clearly showed 
the U.S. State Department, National Security Agency and White House 
had full knowledge of these activities and must have approved of 

As it did in Haiti in February, 2004 after the U.S. led coup ousted 
President Aristide, the U.S. falsely claimed in April, 2002 that 
Chavez had resigned when, in fact, he'd been arrested by complicit 
high level officers in the Venezuelan military. After his arrest and 
removal from the Palacio De Miraflores (the Presidential Palace) 
Pedro Carmona, head of Venezuela's confederation of business and 
industry (Fedecamaras) declared himself President, immediately 
dismissed the National Assembly and other democratic institutions 
and began to annul the Chavez Bolivarian reforms. All of this 
enraged Chavez supporters who rallied en masse, got the support of 
others in the Venezuelan military and forced the reinstatement of 
President Chavez two days later. 

Since his return to office, President Chavez has clearly been on the 
U.S. target list as evidenced by U.S. involvement in the 2002-03 oil 
strike and failed 2004 recall referendum. Although unsuccessful in 
three attempts, U.S. intervention in the past has shown itself to be 
innovative and able to adopt new tactics after failed 
destabilization attempts. Because controlling Venezuela with its 
vast hydrocarbon reserves is so important to the U.S., it seems only 
a matter of time before the next attempt is made to depose Hugo 
Chavez. A fourth intervention most likely would occur either when 
Chavez runs for reelection in 2006 or possibly before he completes 
his current term. 

Hugo Chavez himself believes there's a U.S. plot to assassinate him. 
He may be right. There's also some credible evidence of a 2004 coup 
attempt by neighboring Columbian forces who were arrested in May of 
that year at a ranch in Buruta just outside of Caracas. Those 
arrested said they were sent there to prepare an attack against a 
Venezuelan National Guard base to steal weapons and fully arm a 
3,000 force militia. 

Latin America expert James Petras, professor emeritus at Binghampton 
University, New York, has written that the U.S. has a strategy to 
overthrow Hugo Chavez by military force and at the same time destroy 
the Cuban revolution in a "two step" approach - "first overthrow the 
Chavez government in Venezuela, cut off the energy supply and trade 
links (to Cuba) and then proceed toward economic strangulation and 
military attack." He also believes the U.S. will employ 
a "triangular strategy" to overthrow Chavez - "a military invasion 
from Columbia, U.S intervention (by air and sea attacks plus special 
forces to assassinate key officials) and an internal uprising by 
infiltrated terrorists and military traitors, supported by key 
media, financial and petrol elites." In advance of this, the U.S. 
has provided $3 billion to Columbia in military aid (supposedly for 
the "drug war") so it could triple the size of its military to over 
275,000, add new helicopters and bombers and receive "advanced 
military technology." 

Prior to both the April, 2002 coup attempt and failed recall 
referendum and during the oil strike, the U.S. intensified its anti-
Chavez rhetoric to condition the U.S. public to accept his forced 
removal as a positive change had it happened. That same demonizing 
rhetoric can be expected again in advance of the next U.S. attempt 
to oust Chavez and, in fact, it's already begun. In early 2005, CIA 
chief Porter Goss testified before the U.S. Senate Select Committee 
on Intelligence on "Global Intelligence Challenges in 2005: Meeting 
Long-Term Challenges with a Long-Term Strategy." In his testimony he 
referred to Venezuela as a "potential area for instability" and 
a "flashpoint." He also claimed Hugo Chavez was "consolidating his 
power by using technically legal tactics to target his opponents and 
was meddling in the region." Other administration officials claimed 
Chavez is "a negative force to the region" and a "new breed of 
authoritarianism." And without a touch of irony, they have also 
called the Venezuelan government an "authoritarian democracy", 
a "threat to democracy" and an "elected dictatorship" (clear 
oxymorons - Orwell would be pleased). And there's more from Deputy 
Secretary of State Robert Zoellick stating about Chavez: "You win 
the election, but you do away with the rule of law, you pack the 
courts and (Chavez) is carrying out anti-democratic activities" like 
a dictator. The complicit U.S. corporate media, always in lockstep 
as a willing and shameless co-conspirator, has echoed these anti-
Chavez sentiments portraying Chavez as a regional menace and threat 
to U.S. interests and security. If this type rhetoric continues and 
intensifies in the new year, it may be a clear sign something is 

The U.S. also has established military bases in Peru, Ecuador, the 
Dominican Republic and has 500 troops with planes, weapons and 
equipment in Paraguay in advance of a new base planned for that 
country capable of handling large aircraft and accommodating 16,000 
troops. It also has forces and radar stations in other Latin 
American countries including 800 troops in Columbia with the Bush 
administration's stated intent in 2004 to raise the number to 1400. 
And, of course, there's the controversial base at Guantamamo, Cuba 
used, in part, as a convenient offshore prison for "enemy 

This enhanced military strength in South America may indeed be in 
advance of a planned assault to remove Hugo Chavez. It may also be 
aimed at newly elected Bolivian President Evo Morales (an Aymara 
Indian and first ever indigenous president in Bolivia) and his 
Movement Toward Socialism party (MAS) who has expressed his intent 
to nationalize (but not confiscate) his country's large gas reserves 
and other resources (especially water) to keep more of the country's 
revenues at home to develop the economy and provide more services 
for its people. Morales won impressively with 54% of the vote 
(nearly double the 28.5% of his leading right wing opponent) and 
with a voter turnout of 84.5%. It's likely that Morales actually 
received far more than a 54% majority because of a long history of 
voter manipulation and fraud in Bolivia and elsewhere in the region. 
The fact that he won so impressively only showed his support among 
the people was so strong, not even stealing some of it could stop 
him. And his popularity affected the legislative outcome as well as 
Morales' MAS won a majority 64 seats in the 130 seat Chamber of 
Deputies. Morales will be inaugurated on January 22 and begin 
serving a 5 year term. 

An early ominous sign against him is reflected in a Wall Street 
Journal editorial claiming Morales' election "is more bad news for 
liberty in Latin America." It went on to say the cocaleros (Quechua 
indigenous campesino coca farmers) he headed was a "radicalized 
political force....against all things American" and "the Morales 
economic platform doesn't promise a future to Bolivians, only 
revenge." In his first post-election diplomatic trip abroad, Morales 
chose to visit Fidel Castro to discuss relations between Bolivia and 
Cuba. Morales also plans to meet with Hugo Chavez and leaders of 7 
other countries that invited him to visit at their expense 
(including China and France) as he begins a world tour in early 
January. The Bush administration will surely use at least the Castro 
and Chavez meetings in any future hostile Morales rhetoric to help 
justify any action against him they may have in mind. 

Morales has only just been elected, so how he will, in fact, govern 
is uncertain. However, in early interviews he said his first move as 
President will be to overturn Supreme Decree 21060, the 1985 measure 
making Bolivia the first Latin American country to adopt "free 
market" and privatization policies by decree. Morales said he will 
work with the new Chamber to pass a new law governing economic 
policy. He also plans to impose new taxes on the rich. Should his 
plan as it's implemented attempt to model his government after 
Venezuela's and succeed in doing it, he no doubt would then become 
another U.S. target for removal. 

Whether the U.S. will proceed with the plans Professor Petras says 
it's made is unknown, but it may become clearer in the new year. 
Under the best of circumstances, however, achieving them won't be 
easy despite the overwhelming U.S. military advantage. The mass 
public support Hugo Chavez enjoys would create chaos and probably 
rebellion in the country should a new U.S. approved leader take 
office and try to reverse his policies. Furthermore, the Bush 
administration may be restrained from acting against Chavez for at 
least the reasons below: 

--the U.S. is already bogged down in Iraq in endless conflict. 

--It's ratcheting up the rhetoric against Iran and Syria possibly in 
advance of an assault against either or both countries. 

--The great cost of the Iraq war, along with large growing and 
unsustainable budget and current account deficits, may preclude 
congressional and public support for added adventures. 

--Bush's approval ratings have plummeted, and he's losing support 
from his base and own party, and the military high command 
wants "out" of Iraq. 

--The newly revealed illegal warrantless domestic spying as well as 
illegal break-ins and surveillance of mosques and Muslim businesses 
and homes supposedly searching for nuclear materials (both clear 
violations of the Fourth Amendment) authorized secretly by Bush has 
finally aroused the ire of Democrats and some Republicans. They also 
violate the 2001 U.S. v. Kyllo Supreme Court decision that ruled the 
use of thermal imaging to detect heat lamps in a residence is 
a "search" as defined under the Fourth Amendment and requires a 
warrant. The decision was written by Justice Antonin Scalia. 

--The ongoing Special Counsel investigation may lead to further 
indictments beyond Lewis Libby possibly up to the highest levels of 
the administration before its completed. 

--The Jack Abramoff financial and political scandal involving Tom 
Delay and potentially many others in government may be one of 
biggest ever in Washington. 

--The systemic use of torture authorized at the highest level 
and "rendition" flights to torture centers in countries permitting 
it have outraged the world. In addition, the weak McCain amendment 
will do little to stop it, and the newly enacted Graham Amendment 
that annuls detainees' sacred constitutionally guaranteed habeas 
rights will prevent torture victims from seeking redress in U.S. 
courts. These new laws only add to the outrage. 

--And, some in Congress are beginning to mention impeachment. 
Already, lawyer John Bonifaz has authored a new book making the case 
for impeachment entitled - "Warrior-King: The Case for Impeaching 
George W. Bush." And University of Illinois law professor Francis 
Boyle, a scholar and recognized expert in international law and 
human rights, agrees, and in January, 2003 prepared a "Draft 
Impeachment Resolution Against President George W. Bush" in proper 
form to be presented in the House of Representatives. In addition, 
and surprisingly, even Barron's Magazine, published by Dow Jones & 
Co. that also publishes the Wall Street Journal, raised the 
possibility in December of impeachment on its editorial page. It 
expressed its concern with a president acting on his own in 
violation of the Constitution and said..."putting the president 
above the Congress is an invitation to tyranny. The president has no 
powers except those specified in the Constitution and those enacted 
by law." It's also worth noting that John Dean, a Republican and 
former Nixon White House counsel, expressed deep concern that George 
Bush was the "first U.S. president (ever) to admit to an impeachable 

In light of all this and the clear sound of an administration 
unraveling, even George Bush and those closest to him may think long 
and hard before undertaking new ventures, the outcomes of which are 
most uncertain. Stay tuned. 

Stephen Lendman lives in Chicago and can be reached at 

found at
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