Venezuela Places Reserves In Euros

FMNN: First Iraq, then Iran and now Venezuela. When Saddam Hussein announced Iraq was going to sell oil for euros rather than dollars, the United States decided the former CIA asset was producing weapons of mass destruction and invaded. Iran recently threatened to create a commodities bourse that would settle in euros rather than dollars. And now Venezuelan President Hugo Chavez has reportedly moved his country's monetary reserves out of Treasuries and over to Europe where presumably they reside in euro-denominated instruments of some sort.

Moving assets from dollars to euros or gold is a way of launching a bloodless but fairly effective attack on the United States which routinely spends a great deal more than it takes in from taxes and other revenue sources. Were other countries to follow this lead, the United States would have a harder time finding buyers at Treasury auctions - and would either have to find another of funding its deficits or would have to cut back on social and military spending. Chavez announced his monetary reconfiguration on TV, from a South American summit he was attending. "We've had to move the international reserves from U.S. banks because of the threats [from the United Staes]," the AP quoted him as saying. "The reserves we had [invested] in U.S. Treasury bonds, we've sold them and we moved them to Europe and other countries."

Like Iran, Venezuela under Chavez has been a harsh critic of the United States, and the Bush administration has made no secret of its irritation with the socialist Venezuelan leader who admires Castro and wants to move all of South America to the left. Chavez is intent on separating the Americas from United States domination and has even proposed a South American central bank to hold foreign exchange reserves from other South American central banks. Link