The World Bank was not very nice to Venezuela — this was long before Chavez’s time. What happened was that the World Bank had a habit of making loans to poor countries to build their infrastructure.
The conditions are that the country MUST use the engineering firms of the nation doing the lending. (Think Bechtel) They cannot spend the money in country.
So, Bechtel builds a bridge or a water purification system or a highway — but Venezuela can’t pay the money back according to the terms — since the project does not pump revenues in the immediate future. Meanwhile, Venezuela has put up their oil fields or other natural resources as collateral.
These resources are then seized by companies affiliated to the lending nation. (Think Exxon)
As a result of these practices, the WorldBank has a not so good reputation with developing nations.
The significant thing about Venezuela’s recent statement is that they are joining the Iran Oil Bourse — which plans to sell oil for Euros. If you have dollars, you can’t buy oil. This is going to cause big problems for the United States.
We’re seeing the very beginnings of what’s about to happen.
A switch from the Dollar backed oil to the Euro backed oil will suddenly take a lot of money out of America because of the conversion difference.
That could be very bad for all kinds of investment and lending affecting interest rates, availability of money, and inflation.
You are so right.
You both see it and get it.
The Petro-Euros are no game.
Iran will do it, along with Venezuela, and probably the Sudan and Libya.
