<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

An Urgent Choice: Revolutionary Incest or Democratic Coexistence...

Posted by click at 4:11 AM in Democratic proposals

<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...

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

SARS outbreak clouds oil company outlook

Posted by click at 4:02 AM Story Archive (Page 174 of 637)

Reuters, 05.02.03, 3:44 PM ET By Joseph A. Giannone

NEW YORK, May 2 (Reuters) - The global travel slump and a potential slowdown in Asia's economies prompted by the deadly SARS virus could cut into energy companies' earnings in the second quarter and beyond, analysts and industry executives said. Severe Acute Respiratory Syndrome has claimed nearly 400 lives since spreading from China in March. Efforts to avoid and contain the disease have crimped travel and tourism and shut down factories and office buildings in China and Hong Kong.

Industry analysts say demand for oil and refined fuels will suffer, sapping profit growth at Exxon Mobil Corp. (nyse: XOM - news - people), ChevronTexaco Corp. (nyse: XOM - news - people) and ConocoPhillips (nyse: XOM - news - people) -- all global oil companies with big refining and marketing businesses in Asia. "SARS has reduced airplane travel, reduced jet fuel demand and affected the economy," said analyst Lowell Feld of the U.S. Energy Information Administration, referring to China.

Energy companies, which posted record first-quarter profits amid soaring oil and gas prices, already face a period of falling prices. The war in Iraq ended with little damage to that country's oil facilities and fears of further disruptions in oil-producing countries Venezuela and Nigeria have eased.

Yet now companies face the prospect of reduced sales of jet fuel, gasoline, natural gas, chemicals and power in Asia, according to Lysle Brinker, an oil analyst for John S. Herold.

No one knows for sure how far SARS will spread, and some analysts complain fear is causing more economic damage than the virus. Still, industry executives say the disease and the world's response will put a dent in second-quarter results.

OPEC President Abdullah Al-Attiyah, Qatar's oil minister, estimated last week that SARS will reduce oil demand by about 300,000 barrels per day (bpd).

If the two-month old downturn persisted, SARS could erase much of Asia's projected economic growth. J.P. Morgan Chase has warned the virus may not be brought under control until June.

China's economy, once expected to expand by 8 percent, now may shrink by 2 percent in the second quarter. It had been slated to consume an additional 100,000 bpd this year, according to EIA estimates.

"The demand side of the picture is in big trouble because of the high energy prices we've experienced the past few months and SARS' impact on demand in Asia," said Fimat USA analystJohn Kilduff.

CANCELED FLIGHTS

The airline industry, a major consumer of jet fuel and other oil products, has been hard hit. Industry group IATA in March said trans-Pacific flights were down 12 percent and Europe-to-Asia flights fell by 15 percent.

"Some destinations have seen traffic down 30 percent," IATA spokesman William Gaillard said. April figures won't be available until mid-May.

A spokesman for Exxon Mobil, the world's largest publicly traded oil company, told investors on Thursday that demand for jet fuel so far in the second quarter has decreased by 12 percent to 15 percent from the first quarter.

"The industry's going to see an impact because of the announcements by several airlines cutting back on flights," the spokesman said.

ChevronTexaco declined to forecast what impact the disease would have on its business.

IATA said fear of SARS slowed travel well beyond the affected areas. Tourists and businesses people are avoiding Thailand, Indonesia, Malaysia and Japan, where the number of SARS cases "is infinitesimal," Gaillard said.

Exxon Mobil has refineries in Thailand, Malaysia and Singapore and 2,800 service stations throughout the Asia-Pacific region. ChevronTexaco has three refineries, 2,800 Caltex service stations and other assets in China, South Korea, Hong Kong and Taiwan.

ConocoPhillips owns or operates refineries in Malaysia and Thailand as well as 130 service stations in Thailand. It has a new retail venture in Malaysia.

SEMA's Battle for Wheel Standards Rolls Into Venezuela

Posted by click at 3:59 AM in ve economy

P.R.Newswire, 5/2/2003 15:35

DIAMOND BAR, Calif., May 2 /PRNewswire/ -- SEMA, the Specialty Equipment Market Association, has taken its campaign to protect specialty equipment markets worldwide to Venezuela where, in a disturbing development, the government has imposed new requirements on custom wheels sold in that country. The new standard is so restrictive that its effect will be to make the sale of non-Venezuelan wheels into that market not economically feasible.

Linda Spencer, director of government and international relations for the association, said, "We conclude that the proposed standard is unnecessary and would result in costly and burdensome requirements with little or no resulting benefit."

The United States government has filed a demarche (official protest) about the standard with the Venezuelan government in tandem with SEMA's protest. The U.S. government called upon the Venezuelan officials to "work with us to ensure that this standard does not inadvertently become a significant non- tariff barrier."

Virtually all international manufacturers of wheels already meet the highest standards and currently comply with ISO, TUV, or similar global quality standards, according to Spencer's protest which urged the Venezuelan government to accept test results verifying compliance with recognized international standards.

The custom wheel market in Venezuela is relatively small compared with the market size in other countries, Spencer said. "These regulations would shut many respected manufacturers out of the country's market. That's certainly going against the trend toward free trade among nations of the North and South American continents," she said.

Recently, SEMA successfully led a similar campaign to keep the Mexican custom wheel market, estimated at $800,000 annually, open to companies wishing to import their products into that NAFTA partner country. While the Mexican government withdrew their initial standard at the urging of SEMA and other companies, Mexican officials are determined to implement a wheel standard and SEMA has been invited to assist in the drafting of that new regulation.

SEMA, the Specialty Equipment Market Association, represents the $27 billion specialty automotive industry. Founded in 1963, the trade association has more than 4,500 member companies. It is the authoritative source of research data, trends and market growth information for automakers and the specialty auto products industry. The industry provides appearance, performance, comfort, convenience and technology products for passenger cars, minivans, trucks, SUVs and recreational vehicles. For more information, contact SEMA at 1575 S. Valley Vista Dr., Diamond Bar, CA, 91765-3914; call 909/396-0289; or visit www.sema.org or www.enjoythedrive.com . SOURCE SEMA (Specialty Equipment Market Association)

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