Interview with Michael Hudson

-- in which Hudson goes into detail on how precisely the US and its agencies inside Venezuela have been able to destabilize the Venezuelan economy. This paragraph is critical:

First of all, oil refineries were not built in Venezuela, but in Trinidad and in the southern U.S. Gulf Coast states. This enabled U.S. oil companies – or the U.S. Government – to leave Venezuela without a means of “going it alone” and pursuing an independent policy with its oil, as it needed to have this oil refined. It doesn’t help to have oil reserves if you are unable to get this oil refined so as to be usable.

So that's how they do it. Hudson does, however, suggest that screwing Venezuela will have a price:

The U.S. has overplayed its hand in destroying the foundation of the dollar-centered global financial order. That order has enabled the United States to be “the exceptional nation” able to run balance-of-payments deficits and foreign debt that it has no intention (or ability) to pay, claiming that the dollars thrown off by its foreign military spending “supply” other countries with their central bank reserves (held in the form of loans to the U.S. Treasury – Treasury bonds and bills – to finance the U.S. budget deficit and its military spending, as well as the largely military U.S. balance-of-payments deficit.

Given the fact that the EU is acting as a branch of NATO and the U.S. banking system, that alternative would have to be associated with the Shanghai Cooperation Organization, and the gold would have to be kept in Russia and/or China.

So I suppose at some point the rest of the world is going to ask the US to "pay up," and the national obsession with capitalism (see e.g. President Trump's references to "socialism" in the State of the Union address) will come back to bite America hard. That point is no doubt a fair distance away, though.

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EyeRound's picture

thank you for posting this, Cassiodorus.

Hudson connects the dots: US dominated global finance, US foreign military debt, stability of the dollar, gold reserves and Venezuela.

For those of us who have been wondering why those public figures who are opposed to Trump (e.g., Bernie, the progressives, and the dem party as a whole) have NOT come out in loud, round objection to the coup attempt in VZ but are gagged instead, Hudson tells you why.

They are, if Hudson is right, hobbled by the threat that if you can't stop Maduro you'll end up collapsing the US economy, with massive global effects. (Of course, VZ is acting consistently to preserve its political autonomy in the context of years of US policy, sanctions, "make the economy scream", etc.) This may also go some way toward explaining why China is allegedly making deals with Guaido.

Tulsi Gabbard's objection to US intervention in VZ is so shallowly based as to be a poor attempt to deflect any real public understanding of what path the US is going down and why. Compared to such froth, Hudson's analysis is a much-needed breath of cold, sobering fresh air.

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OzoneTom's picture

@EyeRound
That seems baked-in at this point anyway.

The United States used to export manufactured goods. Now our primary export is Dollars.

And we are strongly driving foreign buyers away from that product.

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EyeRound's picture

@OzoneTom Was wondering, though: since Hudson predicts a reversion ("after the deluge") to another gold standard--what does this mean in terms of Modern Monetary Theory?

Isn't MMT based on fiat money and not on gold standard?

Is MMT merely the description of a passing/transitory economic state of affairs?

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OzoneTom's picture

@EyeRound
So wouldn't be able to explain MMT let alone discuss some derivative based on it's definition. I do expect the U.S. economy to suffer greatly from reduced global dependence on the currency (I DO believe that the Dollar will remain a major currency for quite a while).

But America's position is delicate. The size of the debt, increased cost of imports and losing the reserve currency holding down both inflation and interest rates will all impact us domestically pretty rapidly.

The positive thing is that we SHOULD be forced to reduce our global military footprint.

I've never been a gold bug but will have to look into Hudson's take and evaluate how I might be able to hedge my other retirement assets by a dollar return to that standard. I have always been resistant to the idea of holding physical gold.

I have moved a decent segment of my IRA from domestic equity holdings to foreign ones including both developed and emerging markets in the last half-year. Also foreign local-currency bonds.

I've also been enlarging my home garden and am adding fruit trees now, plus gathering a variety of seeds in cold storage! Biggrin

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Cassiodorus's picture

@EyeRound Seemed important when I saw it on Facebook. PS where are the public details of China's deals with the Pretender?

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"Earth is our only home" - Kim Stanley Robinson

EyeRound's picture

@Cassiodorus @Cassiodorus
"However, Daniel Yergin reports in the Wall Street Journal (Feb. 7) that China is trying to hedge its bets by opening a back-door negotiation with Guaido’s group, apparently to get the same deal that it has negotiated with Maduro’s government."

WSJ paywall keeps me from checking this out further.

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Venezuela does sell crude oil (to China for example). It can't refine it and use it itself, and there is value added in refining it so being reduced to simply exporting crude reduces revenue. One thing that I don't think Hudson mentioned is that US sanctions have made it very difficult for Venezuela to purchase supplies and spare parts, etc. for equipment to get the crude out of the ground. He is right, I believe, about the fact that there will eventually be a reckoning for our bullying. It will probably come initially in the form of erosion of the petrodollar which will lead to inflation and a significant reduction in US prosperity. We are living with a financial house of cards, so it could get ugly. The US is so militaristic that governmental responses could be very UGLY.

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snoopydawg's picture

Shades of Saddam has WMDs

Replicating Regime Change Playbook, Pompeo Says US Obligated to 'Take Down' Hezbollah in Venezuela

Published on
Thursday, February 07, 2019
by
Common Dreams
Replicating Regime Change Playbook, Pompeo Says US Obligated to 'Take Down' Hezbollah in Venezuela

"It's no coincidence that this seems copy/paste from Bush's lies to justify his wars."
by
Jessica Corbett, staff writer
26 Comments
U.S. Secretary of State Mike Pompeo

U.S. Secretary of State Mike Pompeo on Wednesday claimed the designated terrorist organization Hezbollah "has active cells" in Venezuela. (Photo: Fox Business)

As a U.S.-backed effort to overthrow Venezuelan President Nicolás Maduro continues, U.S. Secretary of State Mike Pompeo said late Wednesday that Hezbollah "has active cells" in Venezuela—a claim that was immediately scrutinized and compared with the second Bush administration's lies to justify the 2003 invasion of Iraq.

Hezbollah, a political and militant Shi'ite Muslim group based in Lebanon, has been on the U.S. State Department's "Designated Foreign Terrorist Organizations" list since 1997. In the interview with Fox Business, Pompeo, who previously served as President Donald Trump's CIA director, also charged that Iran and Cuba are strongly influencing the country.

"The Cubans invaded Venezuela. The Cubans have been controlling the security apparatus, protecting Maduro, and destroying the way of life for the Venezuelan people for an awfully long time," he said. "People don't recognize that Hezbollah has active cells—the Iranians are impacting the people of Venezuela and throughout South America. We have an obligation to take down that risk for America."

I suppose that the heavy sanctions we have placed on Venezuela has nothing to do with impacting the people of Venezuela. Nope, Move along, nothing to do with us.

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The public has been conditioned over time—in ways that would make Pavlov’s dawg seem like an in independent thinker

EyeRound's picture

@snoopydawg in the attempt to mask the actual lay of the land: that the US economy is a global house of cards that has resulted from horrible mismanagement for more than a half century now.

Impudent.

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It was also the week of Venezuela's presidential election,pure coincidence I'm sure (s).
It was an hour of distorted facts,completely fabricated stories and blatant lies,in short he did his job and the HBO watchers got something that didn't even resemble the facts on the ground in Venezuela. All while laughing and getting laughter from the studio crowd, what a production of propaganda.
I doubt this information surprises anyone here but what I find important is this video 'Empire Files' put together debunking John Oliver's claims one by one, and doing a superb job at it with videos and testimony of the people of Venezuela.

However that isn't the only reason I bookmarked this video immediately after I watched it, the reason was the great collection of facts presented beyond just those used in response to John Oliver's lies. Facts available almost nowhere else I know of with the exception of at The Empire Files show on Venezuela which had a lot more detail than what was given in the following video.
When/if you watch this you'll see right at beginning how far off from the truth John Oliver gets by the time of his finale he has spun right off the rails.
The picture he paints at the end does not even resemble what was really happening on the ground in Venezuela which actually looked more like a real 'Democracy', by far, than any other Country claiming that label.

One last thing, I don't know when it happened but having not watched it for many months I was surprised when I clicked on the link. The first comment posted below it says it all.

"YouTube is trying to censor the video for absolutely no reason by making it age required. There is no reason for their claim for violating community standards."
But it works!
https://www.youtube.com/watch?v=_fV-C1Ag5sI&bpctr=1548793440

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Cassiodorus's picture

@aliasalias Oliver, what a nuisance.

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"Earth is our only home" - Kim Stanley Robinson

CB's picture

@aliasalias
Just add nsfw in front of url.

https://www.nsfwyoutube.com/watch?v=_fV-C1Ag5sI&bpctr=1548793440

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is banking on the world to see our economy as too big to fail. Austerity here we come. Sure bet that Wall Street gets paid off first.

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