Posts tagged OPEC
By CBC News
Venezuela’s government announced Friday that it is devaluing the country’s currency, a long-anticipated change expected to push up prices in the heavily import-reliant economy.
Officials said the fixed exchange rate is changing from 4.30 bolivars to the dollar to 6.30 bolivars to the dollar.
The devaluation had been widely expected by analysts in recent months, though experts had been unsure about whether the government would act while President Hugo Chavez remained out of sight in Cuba recovering from cancer surgery.
It was the first devaluation to be announced by Chavez’s government since 2010, and it brought down the official value of the bolivar by 46.5 percent against the dollar. By boosting the bolivar value of Venezuela’s dollar-denominated oil sales, the change is expected to help alleviate a difficult budget outlook for the government, which has turned increasingly to borrowing to meet its spending obligations.
Planning and Finance Minister Jorge Giordani said the new rate will take effect Wednesday, after a two-day banking holiday. He said the old rate would still be allowed for some transactions that already were approved by the state currency agency.
Venezuela’s government has had strict currency exchange controls since 2003 and maintains a fixed, government-set exchange rate. Under the controls, people and businesses must apply to a government currency agency to receive dollars at the official rate to import goods, pay for travel or cover other obligations.
While those controls have restricted the amounts of dollars available at the official rate, an illegal black market has flourished and the value of the bolivar has recently been eroding. In black market street trading, dollars have recently been selling for more than four times the official exchange rate of 4.30 bolivars to the dollar.
The announcement came after the country’s Central Bank said annual inflation rose to 22.2 percent in January, up from 20.1 percent at the end of 2012.
The oil-exporting country, a member of OPEC, has consistently had Latin America’s highest officially acknowledged inflation rates in recent years. Spiraling prices have come amid worsening shortages of some staple foods, such as cornmeal, chicken and sugar.
Seeking to confront such shortages, the government last week announced plans to have the state oil company turn over more of its earnings in dollars to the Central Bank while reducing the amount injected into a fund used for various government programs and public works projects.
Giordani said the government had also decided to do away with a second-tier rate that has hovered around 5.30 bolivars to the dollar, through a bond market administered by the Central Bank. That rate had been granted to some businesses that hadn’t been able to obtain dollars at the official rate.
It was the fifth time that Chavez’s government has devalued the currency since establishing the currency exchange controls a decade ago in an attempt to combat capital flight.
Republished with permission
As noted by many of our readers, one of the key topics omitted from our article on the inevitability of economic collapse was the petrodollar system. Due to its significance, we felt that this subject deserves its own article. If you have never heard of the petrodollar, don’t be surprised. There’s a good reason for this. No major news network will dare touch this subject because if this information was ever to become public knowledge, politicians would find it next to impossible to convince American people to support any more wars. Public approval of wars is only possible as long as people remain ignorant of the primary driving force behind our foreign policy. The reason you haven’t heard of the petrodollar system is because our government wants you to think that we start wars to spread democracy.However, if you want to distinguish truth from propaganda, if you want to know the real reasons behind the global conflicts in our recent history, you must first learn about the petrodollar system. Without this crucial piece of info, you will have a hard time understanding what really happened in Libya, what’s happening in Syria right now and what’s going to happen in Iran next.
Why did NATO and the U.S. aid Libyan “rebels” in killing Gaddafi? Why was our government willing to support and arm the same terrorists that would later turn on our embassy and murder US Ambassador to Libya, Chris Stevens? Why was killing Gaddafi so absolutely imperative?
Why are we now doing the same thing in Syria? Why are U.S. operatives currently on the ground in Syria aiding Al Qaeda to topple Assad? Why are we willing to work along side known terrorists just to destabilize Syria and overthrow the regime there?
Why are we willing to risk World War 3 by attacking Iran, a key ally to Russia and China? Pakistan and North Korea already possess a nuclear stockpile, but Iran is years away from developing a nuclear weapon. Iran has no military capability to target the U.S. and it has not attacked another country since 1798. Yet the media is trying to convince us that we are weeks away from Ahmedinajad unleashing his non-existent weapons of mass destruction. Sound a little familiar? Have we heard this before, maybe?
So what is the petrodollar system and why is it so important? Why is the United States willing to trigger a new world war just to maintain the hegemony of the petrodollar? To get a proper perspective we need to start with a quick historical background:
Bretton Woods Conference
In July of 1944, as World War II was still raging, 730 delegates from all 44 Allied nations gathered in Bretton Woods, New Hampshire, to setup institutions and procedures to regulate the international monetary system and to establish the rules for commercial and financial relations among the world’s major industrial states.
The Bretton Woods Agreement established the dollar as the world’s reserve currency, which meant that international commodities were priced in dollars. The agreement which gave the United States a distinct financial advantage, was made under the condition that those dollars would remain redeemable for gold at a consistent rate of $35 per ounce. The fixed dollar to gold convertibility rate established a stable platform for global economic growth.
Ignacio E. Sanchez is a lobbyistat DLA Piper, an influential global law firm and a major bundler for the Mitt Romney campaign. A ThinkProgress review of public records reveals Sanchez is also a registered foreign agent representing the interests of the United Arab Emirates and of a former president of the Dominican Republic.
While political candidates are not legally required to identify bundlers — volunteer fundraisers who collect bundles of campaign contribution checks for the campaign — a 2007 law requires that federal candidates disclose the names of any registered lobbyists who bundle large amounts for their campaign. On Tuesday, Romney’s campaign reported that 14 lobbyists combined to raise more than $1.6 million last year in bundled contributions.
One of those lobbyist-bundlers was Sanchez, who raked in $86,700 for the former Massachusetts governor. This major fundraising raises questions about the level of access and influence Sanchez — and by extension, his corporate and international clients — would have in a Romney administration.
Unlike the other 13 identified lobbyist-bundlers, Sanchez is a registered foreign agent. A form filed Monday with the U.S. Department of Justice reveals that he beyond just representing the interests of those domestic clients, Sanchez also represents the embassy of the United Arab Emirates and the presidential campaign of Dominican Republic former president Hipolito Mejia.
Mejia is seeking to reclaim the job he held from 2000 to 2004 and lost in a landslide defeat, amid a national economic crisis and financial near-collapse.
The United Arab Emirates has been among the stronger U.S. allies in the Middle East and is a key player in OPEC, the Organization of the Petroleum Exporting Countries. But the interests of the two countries don’t always converge and groups like Human Rights Watch have raised concerns about the country’s suppression of free speech and political disagreement.
In the past, Sanchez also represented the governments of Turkey and Ethiopia. Current federal lobbying disclosure forms show that he lobbies Congress and the administration on behalf of Starwood Hotels and Resorts Worldwide (which includes the Sheraton, W, and St. Regis brands) and Diageo North America, the makers of Guinness, Jose Cuervo, Captain Morgan, and dozens of other alcoholic beverages.
President Obama does not accept campaign contributions donated or bundled by federal lobbyists or foreign agents. In last week’s State of the Union address, he called for a ban on bundlers lobbying saying “Let’s make sure people who bundle campaign contributions for Congress can’t lobby Congress, and vice versa — an idea that has bipartisan support, at least outside of Washington.”
But Romney — who has not voluntarily disclosed any other bundlers — is apparently all too happy to accept money from those who are paid to influence policy decisions on behalf of special interests, foreign and domestic.
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