<a href=www.vheadline.com>Venezuela's Electronic News Posted: Friday, May 02, 2003 By: Peter Armstrong

Date: Fri, 02 May 2003 00:10:04 -0600 From: Peter Armstrong herrqlys@hotmail.com To: Editor@VHeadline.com Subject: Bush does not want Venezuela to use the Euro

Dear Editor: The comments from adeyc@breathe.com hint at merely the tip of the iceberg of financial havoc a serious shift to oil trading in the Euro would bring for the US greenback.

The current Bush administration "presides" over a record US current account (import/export) trade deficit which hemorrhages the US economy. The only salvation for the US balance of payments comes because the fiat currency for oil is the US dollar, and there is brisk global trade in that currency because the modern world literally runs on oil.

This demand for US petro dollars, combined with a previously safe/moral aura to the United States in general, has led to massive capital inflows into the USA. These foreign investment funds give rise to a USA capital surplus that is re-exported for interest and dividend earnings.

Where do you think the World Bank and the International Monetary Fund get their money?

Now, envision that some ... say 40% ... of the world's oil business moves to a Euro-denominated transaction basis ... this would do several things, all at once, and all bad for the US economy.

Firstly, demand for the US dollar would drop, which in itself would re-adjust those capital flows as foreign investors reappraise the best place to invest their wealth. This really hits the US economy were it hurts: the investment capital market. Much of the US economy is built on futures and derivatives trading ... a potential house of cards.

Secondly, any reduction of the capital account surplus would accentuate the pain of the current account deficit. Without the underpinning of a capital account surplus, the US Treasury can only print an unlimited supply of un-backed US dollars before inflation would rack the country.

Thirdly, the strength of the US dollar is somewhat fictitious. Anglo-American manipulation of the gold market, the over-hyped capital magnet of the major US stock exchanges, and the petro dollar effect all lend support to the US dollar. A serious erosion of any one of these supports to the US dollar could collapse the house of cards.

The concept of economies ... or oil transactions ... switching to a Euro-denominated currency is a nightmare for any US administration. Expect the White House, Wall Street, the CIA, Disney World, McDonald's, and mom's apple pie franchise to all fight tooth and nail against such a development.

Bush lied to you when he said Iraq "wasn't about oil."

Believe me, this kind of lie, and the illegal invasion that followed, will be small potatoes when the world starts to kick the US where it really hurts. But maybe it's time to change the "might is right" imperialist run of the world's superpower ... there will have to be a heroic battle at some time or another, anyway, over the way most us live on this small planet.

Standard of living does not necessarily equate to quality of life.

Don't be swayed by threats that impinging the US hegemony will reduce your standard of living ... European morality appears to be on a higher plane, at the moment, than that displayed by the United States.

Buy Euros ... Buy/sell oil in Euros.  I sense that Venezuela's Hugo Chavez knows all of this already and I expect PDVSA to start offering a Euro price list in the very near future.

Peter Armstrong herrqlys@hotmail.com

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Friday, May 02, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: Talking to a "chavista" light who lives in my neighborhood, I mentioned to him the urgent need our society had to recapture democratic coexistence. I said: " We had it before. Our political discussions rarely ended in violence, much less death. Families did not break apart because of preferences for Betancourt or Caldera. Elections were sport events, a festive occasion.... What is different now...?"

"Plenty" said my friend. "Now we have a revolution ... revolutionaries can not coexist with their ideological enemies, at least until the main objective of the revolution is attained." This objective was defined by him as "Social Justice ... a way for everyone to have an equal share of national wealth."

Well, I said, no one can argue against that ideal, although it is one very difficult to achieve. If we really want to start walking in that direction, the generation of national wealth should be optimized so that there is enough of it to distribute ... if not, we would be rather be producing uniform poverty instead of uniform prosperity ... all national resources should be sensibly developed, productivity maximized, the capacity of the society to produce should be at top efficiency.

For this to take place, I added, every sector of Venezuelan society must participate in the effort ... maximum generation of wealth can not take place in a country deeply divided. Worse, it can not take place in a country where the potentially main generators of wealth have been politically ostracized.

Therefore, I suggested to my friend, "Social Justice" can not be attained unless society can coexist in democracy. In fact, my view was the opposite of what he told me.

This was the end of the discussion, although it should have been the starting point ... because, unless we come to terms rapidly, the country is going to explode in our hands.

Hugo Chavez' revolution of is an incestuous exercise ... as all incest, it is firmly kept within the family. The President preaches incessantly ... to the converted. However, in order to please the converted he has to come down hard on the "oligarchs, squalids, saboteurs, parasitic businessmen and other entomological specimens."

To conserve his flock intact, he has to alienate the dissidents. By doing so, he destroys the possibilities that our society can unite behind the common purpose of creating national wealth and ... then ... striving for a more just society.

Although preaching to the converted gives the preacher an illusory sense of security ... since he only sees approving faces nearby ... this does not help one bit to move the country forward. On the contrary, politics of exclusion are creating the environment for civil rebellion. Deterioration is advancing so rapidly that moral indignation and frustration are overtaking the natural capacity of the people to adjust to the worst situations.

This will not be another Cuba because the economic and social decline taking place under this regime is so abrupt that Venezuelans simply will not become resigned to becoming a society of beggars and buhoneros.

President Chavez can still salvage what is left of his Presidency by bringing his case to the whole nation ... by clearly explaining what he wants to accomplish, and how he proposes to do it. He should be prepared to listen to all sectors of Venezuelan society and to accept criticism and recommendations from all sides. He should have the courage to walk into "enemy territory" to present his case, in good and civilized Spanish. He should explicitly obey the Constitution and stop maneuvering to delay and obstruct constitutional provisions.

The role of a President is to govern for the whole of society and not for a tribe ... if he can not do it, he will be creating the conditions for his own political demise. We have the right to expect a President to behave Presidentially...

• Former Chinese premier Zhou En Lai once said that he did not care what color the cat was, as long as it caught mice.

Similarly, Chavez can keep entertaining his revolutionary fantasies as long as he does not import foreign tyrannies ... as long as he puts everyone in the mood to surge ahead ... as long as he respects dissidence ... as long as his policies can generate employment, his policemen can catch the killers and the robbers ... as long as he punishes his corrupt collaborators and as long as he effectively deals with poverty and mounting garbage in the streets.

The Venezuelan chapter of the Club of Rome has just published a volume on the need to recapture Democratic Coexistence (Venezuela Repeticiones y Rupturas, La Reconquista de la Convivencia Democratica, Caracas, March 2003,). The 19 essays in the volume discuss the need to bring our society back to a civil dialogue, to resolve our political conflicts by mutual agreement, abandoning hate and tear gas as tools of discussion. The volume stresses the urgency to stop the madness into which the country has been captured during the last four years.

Venezuelan society is now at a standstill ... no one is working, no one is dreaming of the future, no one is saving or planning....

We are all surviving on a day to day basis ... and no society can move ahead in this manner.

As Victor Guedez, one of the authors of the essays contained in the Club of Rome volume, says: "If we do not create wealth there will be nothing to distribute."

It's as simple as that!

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email gustavo@vheadline.com