Even if you haven’t heard about it from the mainstream media, the growing currency war between the US dollar and the Russian ruble is beginning to have severe ramifications on other oil exporting nations. After Russia decided to back the value of their currency with Russian oil sales to compete with the dollar as a reserve currency, the US and its OPEC allies opened the flood gates and drilled, pumped, and fracked as much oil as they could to keep oil prices down. That, along with the sanctions over Crimea, have tanked the ruble and stalled the Russian economy badly. Pegging your money to oil is the game that the US has been playing since Nixon ended the Bretton Woods system, taking the dollar off of its gold backing and arranging with Saudi Arabia to accept only dollars for payments for oil. That meant that if your country wanted to buy oil (which is every country), you had to exchange your currency for US dollars before you could even talk to OPEC. This kept the demand, and the value, of the US dollar high due to artificial inflation. But when Putin decided to get into the game, offering to sell his oil for rubles, he threatened the dollar monopoly and the oil glut was the initial response from the West.
Although Russia has trundled along in its current state, other oil countries have fared much worse. Venezuela’s economy has relied on oil exports since the 1930’s, using oil revenues for critical food imports and funding social welfare programs and reforms known as “Bolivarian Missions.” Hugo Chavez used oil money to subsidize the settlement and naturalization of Colombian refugees fleeing civil war to Venezuela, shaping a dependent class to boost his votes. Chavez even went so far as to provide bus services running across the border, ferrying voters who had returned to Colombia back to the polls in Venezuela to get himself reelected.
But when Chavez died and oil prices crashed a year later, unsustainable spending and no contingency would bring severe inflation, widespread food shortages, and the projection of a massive 10% contraction of the Venezuelan economy in 2016. The country’s state-run oil company is already $25 billion in debt to international service firms like Halliburton, who have started to curtail operations. The departure of skilled workers and technicians caused even more delays and complications to Venezuelan oil production, forming a deadly cycle. Disappointed with the turn in the economy, Colombian refugees starting moving back to Colombia. A potential conflict is now stewing between the two countries as Venezuela has claimed that federal aid and subsidized commodities are being smuggled across the border and sold at black markets in Colombia. A little over a week ago, both countries began patrolling their side of the border with troops and armored vehicles. Since then, more troubling incidents have occurred including the mysterious crash of a Venezuelan jet for unknown reasons and a small incursion into Colombia by Venezuelans soldiers chasing a man on a motorcycle.
Unconcerned with Venezuela’s fall, Western leaders are prepared to move beyond the initial response of the oil glut and onto the next step in the currency war. The Rockefeller oil dynasty dropped their investments in oil just months after prices plummeted, furthering the growing trend towards investment in renewable energy sources. It’s clear that the West has decided to slowly concede global oil markets to Russia and China, who have a limited time to exploit the opportunity.
Although Western soft power has waned severely in the aftermath of the Obama and Bush administrations, the West has managed to hold onto the scientific, cosmological monopoly it has maintained since Rene Descartes laid out rationalism in the 17th century. In other words, the eggheads at the top of the Ivory Tower are still pro-west, and they are not above molding their interpretations of the data to keep the grant money flowing. Of course, there are many who genuinely support what they see as the “greater good.” Regardless of the motivation, the result is the same – the beginning of the end of oil sales starting in 2035, and if the West has its way, the beginning of the end of Putin’s oil ruble.
The phase-out is earlier than set by most car makers. Toyota, for instance, has a “zero carbon dioxide emissions challenge” for new vehicles under which it aims to cut emissions from its vehicles by 90 percent by 2050, from 2010 levels.
Although this Globalist plot may be going according to plan, a question arises. If Russia takes the oil markets, what commodity will the dollar be pegged to? I believe the answer was to make GMO crops that replacement. When genetically engineered, these crops are more bountiful and stay fresher longer. Resistances to disease and insects make yields more predictable, allowing for a more stable, predictable commodity to trade on. This would explain the unrelenting push for the widespread acceptance of GMO foods, regardless of the suspicion and antipathy sparked by the business practices of Monsanto-Bayer as well as a lack of long-term testing in humans.
Saudi Arabia is another oil exporter wary of the currency war. Despite the fact that they have been complicit in the glut, the Saudis have started making arrangements to avoid Venezuela’s fate by offering shares in its state-run oil industry to the public in early 2017. The Saudis are planning to live off of the revenue of this deal and other investments rather than relying on the sale of the oil alone, claiming to be independent of fossil fuels by the 2035 deadline. But in reality, you would have better luck selling a Blockbuster franchise than shares in an oil company in the current political climate, no pun intended.
Barkindo called the cutbacks a “major concern for industries which need regular investments” and “which threaten our future”.
The 14 OPEC states and Russia are due to meet next week, with Venezuelan President Nicholas Maduro saying Sunday a deal on limiting output was close.