Tuesday, January 29, 2019

Why must Venezuela be destroyed?

¿Por qué Venezuela debe ser destruida?

Warum muss Venezuela zerstört werden?

Pourquoi le Venezuela doit-il être détruit ?

Last week Trump, his VP Mike Pence, US State Dept. director Mike Pompeo and Trump’s national security advisor John Bolton, plus a bunch of Central American countries that are pretty much US colonies and don’t have foreign policies of their own, synchronously announced that Venezuela has a new president: a virtual non-entity named Juan Guaidó, who was never even a candidate for that office, but who was sorta-kinda trained for this job in the US. Guaidó appeared at a rally in Caracas, flanked by a tiny claque of highly compensated sycophants. He looked very frightened as he self-appointed himself president of Venezuela and set about discharging his presidential duties by immediately going into hiding.

His whereabouts remained unknown until much later, when he surfaced at a press conference, at which he gave a wishy-washy non-answer to the question of whether he had been pressured to declare himself president or had done so of his own volition. There is much to this story that is at once tragic and comic, so let’s take it apart piece by piece. Then we’ll move on to answering the question of Why Venezuela must be destroyed (from the US establishment’s perspective).

What stands out immediately is the combination of incompetence and desperation exhibited by all of the above-mentioned public and not-so-public figures. Pompeo, in voicing his recognition of Guaidó, called him “guido,” which is an ethnic slur against Italians, while Bolton did one better and called him “guiado” which could be Spanish for “remote-controlled.” (Was that a Freudian slip or just another one of Bolton’s senior moments?) Not to be outdone, Pence gave an entire little speech on Venezuela—a sort of address to the Venezuelan people—which was laced with some truly atrocious pseudo-Spanish gibberish and ended with an utterly incongruous “¡Vaya con Dios!” straight out of a hammy 1950s Western.

Some more entertainment was provided at the UN Security Council, where the ever-redoubtable Russian representative Vasily Nebenzya pointed out that the situation in Venezuela did not pose a threat to international security and was therefore not within the purview of the Security Council. He then proceeded to ask Pompeo, who was present at the meeting, a pointed question: “Is the US planning to yet again violate the UN Charter?”

Pompeo failed to give an answer. He sat there looking like a cat that’s pretending that it isn’t chewing on a canary, then quickly fled the scene. But then most recently Bolton, as he was presumably exiting a national security meeting and walking to a White House press briefing, accidentally flashed his notepad before reporters’ cameras. On it were written the words “5000 troops to Colombia” (that’s a US military base/narco-colony on Venezuela’s northern border). Was this another one of Bolton’s senior moments? In any case, it does seem to answer Nebenzya’s question in the affirmative. The appointment as special envoy to Venezuela of Elliott Abrams, a convicted criminal who was complicit in the previous, failed Venezuelan coup attempt against Hugo Chávez, automatically making him persona non grata in Venezuela, is also indicative of hostile intent.

It would be quite forgivable for you to mistake this regime change operation for some sort of absurdist performance art. It is certainly a bit too abstract for the real-world complexities of the international order. Some poor frightened minion is thrust in front of a camera and declares himself President of Narnia, and then three stooges (Pence, Pompeo and Bolton) plus Bozo the Trump all jump up and yell “Yes-yes-yes, that’s surely him!” And a pensioned-off failure is pulled off the bench, dusted off and dispatched on a mission to a country that won’t have him.

Meanwhile, back in the real world, the Venezuelan army and the Venezuelan courts remains squarely behind the elected president Nicolas Maduro and a list of countries that comprise the vast majority of the world’s population, including China, Russia, India, Mexico, Turkey, South Africa and quite a few others speak out in Maduro’s support. Even the people in the remote-controlled Central American countries know full well what a dangerous precedent such a regime change operation would set if it were to succeed, and are thinking: “¡Hoy Venezuela, mañana nosotros!”

To be thorough, let’s look at the arguments being used to advance this regime change operation. There is the contention that Nicolas Maduro is not a legitimate president because last year’s elections, where he was supported by 68% of those who turned out, lacked transparency and were boycotted by certain opposition parties, whereas Juan Guaidó is 100% legit in spite of him and his inconsequential National Assembly being opposed by 70% of Venezuelans according to the opposition’s own polling numbers. There were also some unfounded allegations of “ballot-box stuffing”—except that the Venezuelans do not use paper ballots, while according to international election-watcher and former US president Jimmy Carter, “the election process in Venezuela is the best in the world.”

There is the contention that Maduro has badly mismanaged Venezuela’s economy, leading to hyperinflation, high unemployment, shortages of basic goods (medicines especially) and a refugee crisis. There is some merit to this contention, but we must also note that some of Venezuela’s neighbors are doing even worse in many respects in spite of Maduro not being their president. Also, many of Venezuela’s economic difficulties have been caused by US sanctions against it. For instance, right now around 8 billion dollars of Venezuela’s money is being held hostage and is intended to be used to finance a mercenary army which would invade and attempt to destroy Venezuela just as was done with Syria.

Finally, a lot of Venezuela’s predicament has to do with the oil curse. Venezuela has the largest oil reserves in the world, but its oil is very viscous and therefore expensive to produce. During a period of high oil prices Venezuelans became addicted to the oil largess, which the government used to lift millions of people out of abject poverty and to move them out of slums and into government housing. And now low oil prices have caused a crisis. If Venezuela manages to survive this period, it will be able to recover once oil prices recover (which they will once the fracking Ponzi scheme in the US has run its course). We will return to the topic of Venezuelan oil later.

As a side comment, a lot of people have been voicing the opinion that Venezuela’s woes are due to socialism. According to them, it’s fine if lots of people are suffering as long as their government is capitalist, but if it is socialist then that’s the wrong kind of suffering and their government deserves to be overthrown even if they all voted for it. For example, the site ZeroHedge, which often publishes useful information and analysis, has been pushing this line of thinking ad nauseam. It is unfortunate that some people imagine that they are being principled and right-thinking whereas they are just being dumb jerks at best and somebody’s useful idiots at worst. The politics of other nations are not for them to decide and they should stop wasting our time with their nonsense.

This naked attempt at regime change would set a very dangerous precedent for the US itself. The doctrine of legal precedent is by no means universal. It comes to us from the dim dark ages of tribal English common law and is only followed in former British colonies. To the rest of the world it is a barbaric form of injustice because it grants arbitrary power to judges and lawyers. The courts must not be allowed to write or alter laws, only to follow them. If your case can be decided on the basis of some other case that has nothing to do with you—well then, why not let somebody else pay your legal fees and your fines and serve out your sentence for you? But there is an overarching principle of international law, which is that sovereign nations have a right to keep to their own laws and legal traditions. Therefore, the US will be bound by the precedents which it establishes. Let’s see how that would work.

The precedent established by the US government’s recognition of Juan Guaidó allows Nicolas Maduro to declare Donald Trump’s presidency as illegitimate for virtually all of the same reasons. Trump failed to win the popular vote but only gained the presidency because of a corrupt, gerrymandered electoral system. Also, certain opposition candidates were unfairly treated within the electoral process. Trump is also a disgrace and a failure: 43 million people are on food stamps; close to 100 million are among the long-term unemployed (circularly referred to as “not in labor force”); homelessness is rampant and there are entire tent cities springing up in various US cities; numerous US companies are on the verge of bankruptcy; and Trump can’t even seem to be able to keep the federal government open! He is a disaster for his country! Maduro therefore recognizes Bernie Sanders as the legitimate president of the United States.

Vladimir Putin could then build on these two precedents by also recognizing Bernie Sanders as the rightful US president. In a public speech, he could say the following: “I freely admit that we installed Donald Trump as US president as was our right based on the numerous precedents established by the US itself. Unfortunately, Trump didn’t work out as planned. Mueller can retire, because this flash drive contains everything that’s necessary to nullify Trump’s inauguration. Donny, sorry it didn’t work out! Your Russian passport is ready for pick-up at our embassy, as are your keys to a one-bedroom in Rostov, right next door to the Ukraine’s former president Viktor Yanukovich who was violently regime-changed by your predecessor Obama.”

Why the unseemly haste to blow up Venezuela? The explanation is a simple one: it has to do with oil. “It will make a big difference to the United States economically if we could have American oil companies invest in and produce the oil capabilities in Venezuela.” said John Bolton on Fox News. You see, Venezuelan oil cannot be produced profitably without high oil prices—so high that many oil consumers would go bankrupt—but it can certainly be produced in much higher quantities at a huge financial loss.

Huge financial losses certainly wouldn’t stop American oil companies who have so far generated a $300 billion loss through fracking—financed by looting retirement savings, saddling future generations with onerous debt and other nefarious schemes. Also keep in mind that the single largest oil consumer in the world is the US Dept. of Defense, and if it has to pay a little more for oil in order to go on blowing up countries—so it will. Or, rather, you will. It’s all the same to them. The US is already well beyond broke, but its leaders will do anything to keep the party going for just a while longer.

Here’s the real problem: the fracking bonanza is ending. Most of the sweet spots have already been tapped; newer wells are depleting faster and producing less while costing more; the next waves of fracking, were they to happen, would squander $500 billion, then $1 trillion, then $2 trillion… The drilling rate is already slowing, and started slowing even while oil prices were still high. Meanwhile, peak conventional (non-fracked) oil happened back in 2005-6, only a few countries haven’t peaked yet, Russia has announced that it will start reducing production in just a couple years and Saudi Arabia doesn’t have any spare capacity left.

A rather large oil shortage is coming, and it will rather specifically affect the US, which burns 20% of the world’s oil (with just 5% of the world’s population). Once fracking crashes, the US will go from having to import 2.5 million barrels per day to importing at least 10—and that oil won’t exist. Previously, the US was able to solve this problem by blowing up countries and stealing their oil: the destruction of Iraq and Libya made American oil companies whole for a while and kept the financial house of cards from collapsing. But the effort to blow up Syria has failed, and the attempt to blow up Venezuela is likely to fail too because, keep in mind, Venezuela has between 7 and 9 million Chavistas imbued with the Bolivarian revolutionary spirit, a large and well-armed military and is generally a very tough neighborhood.

Previously, the US resorted to various dirty tricks to legitimize its aggression against oil-rich countries and its subsequent theft of their natural resources. There was that vial of highly toxic talcum powder Colin Powell shook at the UN to get it to vote in favor of destroying Iraq and stealing its oil. There was the made-up story of humanitarian atrocities in Libya to get the votes for a no-fly zone there (which turned out to be a bombing campaign followed by a government overthrow). But with Venezuela there isn’t any such fig leaf. All we have is open threats of naked aggression and blatant lies which nobody believes, delivered incompetently by clowns, stooges and old fogies.

If Plan A (steal Venezuela’s oil) fails, then Plan B is to take all of your US dollar-denominated paper waste—cash, stocks, bonds, deeds, insurance policies, promissory notes, etc.—and burn it in trash barrels in an effort to stay warm. There is a definite whiff of desperation to the whole affair. The global hegemon is broken; it fell down and it can’t get up.


Unknown said...


Dear Sir I suggest reading the comments section of the above article.

David Veale said...

Do you think Guaidó has folks who can train dogs for raping political prisoners, ala Pinochet? It's like our coup in Chile all over again. For anyone who hasn't read it, check out "Confessions of an Economic Hit Man" to learn all about what we've done in South America and the rest of the world, written by one of the people who knows because he was hired to do it.

Dmitry Orlov said...

Pinochet was the real thing, while Guaidó is an astroturf usurper, minted by Ivy League and some Washington think tank or foundation, like Saakashvili or Navalny. It's not a very successful program.

John Casey said...

Can anyone put an approximate time period on when the fracking scam begins to unravel? By that, I mean, at what point can the well-drilling not keep pace with the well-depletion rate? I suppose that kind of metric could be easily suppressed from the public, but certainly industry insiders must have some sense of when the lipstick is fully wiped off the pig's lips.

Lots of intriguing resonance between the Venezuela situation and Greer's novel "Twilight's last Gleaming."

Stuart Davies said...

Spot on! I would suggest, however, that what other Latin American countries might honestly be thinking regarding the empire's regime change scheme in Venezuela is "Hoy Venezuela, AYER nosotros!"

Good points about the fracking scam in the US, expense entailed in the extraction and refining of Venezuela's heavy and super heavy oil deposits, and the way that the oil price crash has therefore impacted disproportionately Venezuela's oil industry. I would add that we have good indications that this price crash was deliberately engineered to target Russia and Venezuela - this was no accident!

Another consideration that deserves to be mentioned regarding all oil price manipulation and oil wars is the banking and currency wars that underpin them. Ultimately these events are not simply about the oil itself, even though that is indeed part of the answer. It is also, at least as importantly, about the petrodollar system, which is the primary pillar artificially supporting the value of currencies created from thin air by a privately owned transnational banking cartel. Controlling what currency is demanded in payment for global oil exports is at least as important to the empire as being first in line for as much of that oil as possible.

Fiona_W said...

What strikes me that Mr. Guaidó is aspiring president, but doesn’t want to pull weight in order to make his dream materialize. If he is serious about his aspirations, he should be out inciting people to take the streets, or negotiate with the military, organize opposition militia or smthng of that nature, i.e. lead and inspire people and yes- face the bullets, yes- take a lot of chances and yes- risk his life, and be ready to embrace failure, just like participants of infamous coup attempt in Turkey during the summer 2016. He can’t possibly count on be successful in his endeavors by sitting in some well protected compound and giving some random statements. For what I see, US organizers of this project picked a person who is unfit for the role assigned to him, even if they push him through now, they will have problems with him later.

Dmitry Orlov said...

Stuart -

Targeting Russia using lower oil prices is like pushing on a string. Russia does not need to export energy in order to maintain a trade surplus and remain largely debt-free. For Russia energy exports are now a loss leader, intended to keep trade partners from collapsing economically. But Venezuela is another story altogether. Because of climate and terrain it has never been self-sufficient in food and numerous other things. As a result, Russia is now shipping wheat to Venezuela, not really caring too much if Venezuela has the money to pay for it.

Fiona -

It is unclear to me whether Guaidó volunteered for the job or was press-ganged, and there are some suspicions that it was the latter. According to members of Maduro's government he has spoken with them and candidly told them that he was being pressured to declare himself president. He probably went along with the US leadership training program to get the free education, and then got caught up in it. I doubt that this is his dream or anything of the sort. He is but a pawn in the game of life.

My donkey said...

I suppose the US is cooking up an excuse to invade Venezuela. For example, a false flag "liquidation" of Guaidó (even as limp a rag as he is) might provide the pretext.
Of course, attacking Venezuela would lead to disaster, but creating disasters seems to be the mission statement of the US.

Anthony Jay said...

Fantastic article! Thank you Mr. Orlov. Probably one of the best I've come across.

Now why doesn't Trump just toss these neocons out out of his admin? Do they have lots of dirt on him and his family??

Stuart Davies said...

Yes, I'm aware of the fact that Russia is supplying wheat to Venezuela and applaud them for that, Dimitri. But I'm curious what you mean when you say "For Russia energy exports are now a loss leader, intended to keep trade partners from collapsing economically." This certainly doesn't apply to China. What other trade partners fall into this category? Aside from the well known fact that Russia (or the Soviet Union) subsidized Cuban energy imports for many years, were they selling their oil to other trade partners below market value when prices were sky high a few years ago?

I'll take you at your word that Russia does not need energy exports to maintain a positive trade balance, that's good to know. Nonetheless, I have seen good indications that the engineered global oil price collapse did indeed do significant harm (as intended) to the Russian economy, though not nearly as much harm as was done to Venezuela given their heavy oil production overhead.

DJScubapro said...

Hey Dmitri, what happened to the youtube link I saw early this morning where Trump is interviewed and says we should just take the oil (Iraq, Libya, etc.) It just disappeared!!!

bairdseymour said...

"The Three Stooges and Bozo the Trump"
I had to laugh; this is generous.

Unknown said...

Shortonoil speculates the following regarding the shale plays.

Shale production will go into reverse this year.. The decline in existing wells is greater than the number of new wells that can be brought on line to compensate. Because of Shale's high decline rate, to keep increasing its production level, it would soon require an infinite number of drilling rigs, and fracking crews to do it. The amount of new production capacity needed is a simple mathematical progression that is controlled by the decline rate.

December 2018,
US shale production 8.03 mb/d.
Legacy decline 17.8% per year (89% first 60 months)
Yearly decline 8.03 mb/d * 0.178 = 1.43 mb/d
New production per operating rig 679 barrels per day*1
Rigs required to compensate for decline = 1.43 mb/d/ 679 = 2106 rigs
There are now less than 900 rigs running in the shale patch

Shale can not overcome its 1.43 mb/d legacy decline with less than 2,106 rigs. The age of Shale is over, and the remainder of the oil age is following close behind!