Here Today... Gone To Hell!

Chavez: Venezuela Moves Reserves to Europe

CARACAS, Venezuela (AP) - Venezuela has moved its central bank foreign reserves out of U.S. banks, liquidated its investments in U.S. Treasury securities and placed the funds in Europe, Venezuelan President Hugo Chavez said Friday.

"We've had to move the international reserves from U.S. banks because of the threats," from the U.S., Chavez said during televised remarks from a South American summit in Brazil.

"The reserves we had (invested) in U.S. Treasury bonds, we've sold them and we moved them to Europe and other countries," he said.

Chavez, a sharp critic of what he calls "imperialist" U.S.-style capitalism, has often criticized foreign banks for the power they wield in international financial markets at the expense of poorer countries.

Chavez again proposed the creation of a South American central bank that would hold the foreign exchange reserves of all the central banks in the region.

"I'm ready right now with the Venezuelan central bank ... to move $5 billion (euro4.15 billion) (of Venezuelan reserves), to a South American bank," Chavez said.

Central bank officials could not be immediately reached for more details.

Chavez has also argued against central bank autonomy, saying excess foreign reserves should be spent on economic development projects.

Under his presidency, Venezuela's mostly pro-Chavez Congress changed central bank laws earlier this year so the government could tap reserves for spending, despite criticism that it would lead to devaluation of the local currency and higher inflation.

Every year the central bank must now compute an "optimum" amount of reserves and hand over the rest to a newly created national development fund.

Money held in the fund will be used for overseas purchases and to pay off outstanding debt.

Foreign exchange reserves held by the central bank stood at $30.434 billion (euro25.27 billion) as of Sept. 28, according to central bank data.

? 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Then......

Venezuelan leader expands his energy initiative and perhaps his regional influence

CARACAS, VENEZUELA - President Hugo Chavez said Thursday he wants to share his country's oil wealth with every nation in South America, in a move that aims to strengthen alliances in the region on the back of surging energy prices.

(clip)

"With this mission of energy integration, Venezuela guarantees petroleum and gas for the South American continent for at least 200 years," Chavez said as he arrived for a South American summit in Brazil's capital of Brasilia.

Venezuela's "Petroamerica" initiative is a rival to the U.S.-backed Free Trade Area of the Americas. It integrates previous oil projects Petrosur, Petrocaribe and Petroandina, under which Venezuela agreed to sell fuel to other countries in the region on preferential terms.

Chavez has said the energy alliances will challenge U.S. economic domination in the region and distribute fuel directly to avoid costly intermediaries.

(Clip)

"Everyone on the continent is looking with a lot of interest," said Santiago Chavez, a trade official at Ecuador's embassy in Venezuela, after energy ministers from 12 South American countries signed a declaration Monday pledging to pursue the Petroamerica initiative.

In June, Chavez signed the Petrocaribe deal with 13 Caribbean countries to sell 190,000 barrels of fuel a day under terms that are expected to save them millions of dollars. Eleven have since signed more specific deals allowing them to pay a portion of their debt up front and finance the rest for 25 years at low interest rates.

Good thing it's not China's reserve of 1 trillion US dollars.  5 billion won't have that big of an effect.  However, it sets a bad precedent for countries to stop using the dollar as a standard.

I thought this might happen.

I believe we may see a market effect of some kind next week.

I have said before, and if we keep this shit up (W antics abroad), China could take note of Chavez. They could dump our debt, or quit buying it.

It would be a devastating blow to our country if that happened.

We may want to start rethinking things.....

this is good in a way. the US economy is over-reliant on cheap foreign debt.

Hmmm, The rise of the Euro is at hand. The Dollar beware...  :smoking:

the CDN$ has made huge gains agnist he USD and in the wake of falling oil prices it has remained in a steady climb gaining strength VS teh pound the euro the USD and the yen...... granted the spread vs teh pound and euro is rather great still the CDN$ is trading at $0.896 the highest its been in 13yrs. The dollar is showing now signs of weakening either. historically the CDN $ has gained ground with oil increases and dropped off as price dropped, now the dollar seem to be on its own path that is continuing to climb away regardless of oil prices.