Venezuela Is About To Ditch The Dollar In Major Blow To US: Here's Why It Matters

Tyler Durden's picture

Authored by Darius Shahtahmasebi via,

Venezuelan President Nicolas Maduro said Thursday that Venezuela will be looking to “free” itself from the U.S. dollar next week, Reuters reports. According to the outlet, Maduro will look to use the weakest of two official foreign exchange regimes (essentially the way Venezuela will manage its currency in relation to other currencies and the foreign exchange market), along with a basket of currencies.

According to Reuters, Maduro was referring to Venezuela’s current official exchange rate, known as DICOM, in which the dollar can be exchanged for 3,345 bolivars. At the strongest official rate, one dollar buys only 10 bolivars, which may be one of the reasons why Maduro wants to opt for some of the weaker exchange rates.

“Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,” Maduro said in a multi-hour address to a new legislative “superbody.” He reportedly did not provide details of this new proposal.

Maduro hinted that the South American country would look to using the yuan instead, among other currencies.

“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro also said.

Venezuela sits on the world’s largest oil reserves but has been undergoing a major crisis, with millions of people going hungry inside the country which has been plagued with rampant, increasing inflation. In that context, the recently established economic blockade by the Trump administration only adds to the suffering of ordinary Venezuelans rather than helping their plight.

According to Reuters, a thousand dollars’ worth of local currency obtained when Maduro came to power in 2013 is now be worth little over one dollar.

A theory advanced in William R. Clark’s book Petrodollar Warfare – and largely ignored by the mainstream media – essentially asserts that Washington-led interventions in the Middle East and beyond are fueled by the direct effect on the U.S. dollar that can result if oil-exporting countries opt to sell oil in alternative currencies. For example, in 2000, Iraq announced it would no longer use U.S. dollars to sell oil on the global market. It adopted the euro, instead.

By February 2003, the Guardian reported that Iraq had netted a “handsome profit” after making this policy change. Despite this, the U.S. invaded not long after and immediately switched the sale of oil back to the U.S. dollar.

In Libya, Muammar Gaddafi was punished for a similar proposal to create a unified African currency backed by gold, which would be used to buy and sell African oil. Though it sounds like a ludicrous reason to overthrow a sovereign government and plunge the country into a humanitarian crisis, Hillary Clinton’s leaked emails confirmed this was the main reason Gaddafi was overthrown. The French were especially concerned by Gaddafi’s proposal and, unsurprisingly, became one of the war’s main contributors. (It was a French Rafaele jet that struck Gaddafi’s motorcade, ultimately leading to his death).

Iran has been using alternative currencies like the yuan for some time now and shares a lucrative gas field with Qatar, which may ultimately be days away from doing the same. Both countries have been vilified on the international stage, particularly under the Trump administration.

Nuclear giants China and Russia have been slowly but surely abandoning the U.S. dollar, as well, and the U.S. establishment has a long history of painting these two countries as hostile adversaries.

Now Venezuela may ultimately join the bandwagon, all the while cozying up to Russia, as well (unsurprisingly, Venezuela and Iran were identified in William R. Clark’s book as attracting particular geostrategic tensions with the United States). The CIA’s admission that it intends to interfere inside Venezuela to exact a change of government — combined with Trump’s recent threat of military intervention in Venezuela and Vice President Mike Pence’s warning that the U.S. will not “stand by” and watch Venezuela deteriorate — all start to make a lot more sense when viewed through this geopolitical lens.

What initially sounded like a conspiracy theory seems to be a more plausible reality as countries that begin dropping the U.S. dollar and opting for alternative currencies continuously — and without exception — end up targeted for regime change.

If the U.S. steps up its involvement in Venezuela, the reasons why should be clear to those who have been paying attention.

*  *  *

This moves comes just days after The BRICS Summit where Putin unveiled his "fair multipolar world," which culminated, as Pepe Escobar explained, in the following

Meet the oil/yuan/gold triad

It’s when President Putin starts talking that the BRICS reveal their true bombshell. Geopolitically and geo-economically, Putin’s emphasis is on a “fair multipolar world”, and “against protectionism and new barriers in global trade.” The message is straight to the point.

The Syria game-changer – where Beijing silently but firmly supported Moscow – had to be evoked; “It was largely thanks to the efforts of Russia and other concerned countries that conditions have been created to improve the situation in Syria.”

On the Korean peninsula, it’s clear how RC think in unison; “The situation is balancing on the brink of a large-scale conflict.”

Putin’s judgment is as scathing as the – RC-proposed – possible solution is sound; “Putting pressure on Pyongyang to stop its nuclear missile program is misguided and futile. The region’s problems should only be settled through a direct dialogue of all the parties concerned without any preconditions.”

Putin’s – and Xi’s – concept of multilateral order is clearly visible in the wide-ranging Xiamen Declaration, which proposes an “Afghan-led and Afghan-owned” peace and national reconciliation process, “including the Moscow Format of consultations” and the “Heart of Asia-Istanbul process”.

That’s code for an all-Asian (and not Western) Afghan solution brokered by the Shanghai Cooperation Organization (SCO), led by RC, and of which Afghanistan is an observer and future full member.

And then, Putin delivers the clincher;

“Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”

“To overcome the excessive domination of the limited number of reserve currencies” is the politest way of stating what the BRICS have been discussing for years now; how to bypass the US dollar, as well as the petrodollar.

Beijing is ready to step up the game. Soon China will launch a crude oil futures contract priced in yuan and convertible into gold.

This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan.

Inbuilt in the move is a true Chinese win-win; the yuan will be fully convertible into gold on both the Shanghai and Hong Kong exchanges.

The new triad of oil, yuan and gold is actually a win-win-win. No problem at all if energy providers prefer to be paid in physical gold instead of yuan. The key message is the US dollar being bypassed.

RC – via the Russian Central Bank and the People’s Bank of China – have been developing ruble-yuan swaps for quite a while now.

Once that moves beyond the BRICS to aspiring “BRICS Plus” members and then all across the Global South, Washington’s reaction is bound to be nuclear (hopefully, not literally).

Washington’s strategic doctrine rules RC should not be allowed by any means to be preponderant along the Eurasian landmass. Yet what the BRICS have in store geo-economically does not concern only Eurasia – but the whole Global South.

Sections of the War Party in Washington bent on instrumentalizing  India against China – or against RC – may be in for a rude awakening. As much as the BRICS may be currently facing varied waves of economic turmoil, the daring long-term road map, way beyond the Xiamen Declaration, is very much in place.

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NoDecaf's picture

ISIS in Venezuela

yomutti2's picture


 Pffft. What a joke. Venezuela is broke in any currency.



nmewn's picture

Because every other socialist decision he's ever made in his life has worked out just fine, I really don't see a problem ;-)

Richard Chesler's picture

Venezuela sits on the world’s largest rehypothecated oil reserves.


nmewn's picture

Largest dirtiest rehypothecated oil reserves ;-)

Twee Surgeon's picture

As far as I know, Venezuelas Oil is dirty stuff, full of Sulphur (I do not pretend to be an expert on this so it's just what i have read.) I believe that the majority of their oil has been Refined in Huston , Texas, for several dacades because that is where the technology is or was. Despite all Political Theatrics. I think they did do a deal with Iran or something but the Bulk of their Oil has been going through Texas for a long time. I have nothing to say or add other than that except for some of the ladies in Venezuela are very pretty. I'm not sure about Miss 1978 though, she looks like a bit of a cunt.

vato poco's picture

the "country" where toilet paper costs a weeks salary, so they do without; where an ounce of silver will get you some primo weed and a scarily intense blowjob; where good decent folks don't talk much about where all those missing dogs & cats & zoo animals got to is going to strike a 'major blow' to the US. uh-huh.

do you silly fuckers even proofread this shit anymore??

ThirdWorldDude's picture

How hard is it to understand that in this game Venezuela is but a baseball bat in RC's hands, already swung and heading fast towards the Anglo-Zio snake's miserable head?

Keyser's picture

If your currency isn't worth the paper it is printed on, does it really matter what it trades at against the Ruble, Yen Yuan, etc? It's still shit... 

t0mmyBerg's picture

y=Yeah the Venezuela angle is off.  But the petrodollar struggle is real.  I believe that IS why Saddam is gone and Khaddafi and the ex head of Total and several others.  The problem with the alternative (RC led currency matrix) is that these countries are all repugnant in some ways, more than the US is.  For Putin to talk about fairness in anything is a joke.  He is the head gangster in a gangster state.  Always has been always will be.  China is a directed totalitarian-when-it-suits-us country.  Having the oil contract settleable in gold may insulate it from these deficiencies  but time will tell if it becomes the preferred contract, overtaking the WTI and Brent contracts.  I will watch that with great interest.  It may be a game changer.  And of course in the end they are trying to insulate themselves from what WILL happen.  The US will have no choice but to devalue the dollar, and create inflation to get out of its debt problem.  But then so will everyone else.  There is a reason Gold is $1350 15 years after being $250.  And why it has been above $1000 for literally years now.  And when the shit really does hit the fan some few years from now, it will make the bitcoin chart look like a piker.  Which is why the blockchain currencies are doing what they are doing too.

Jeffersonian Liberal's picture

As the Germans during the Weimar republic found the currency more valuable to burn, so the Venezuelans will find their currency more valuable as toilet paper, which they have run out of.

Socialism keeps failing.

But Socialists keep screaming (and protesting and rioting), "Give it one more chance...OUR way."

Akzed's picture

Sometimes you're the Louisville Slugger, sometimes you're the ball.


dumluk's picture

lets hope so anyway....wouldnt it be sweet poetic justice if it worked out that way? In any case, no matter what your politics, it cant be denied, Maduro and Co. are bad managers.......and yes, the girls tend to be muy bonita, and lately showing up here in Panama......looking for a life....

Escrava Isaura's picture

Maduro: ”If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro.”

Nice try but, it’s too late.

Second, post collapse, South America is all what will be left to the US to exploit. Africa will be give to Europe. And the East and Eurasia will be shared by China and Russia; of course,  unless they nuke each other.

“Never let your debt point outside your law—your currency.” —MEFOBILLS.


BennyBoy's picture


Tomorrow's headline:

Venezuelan President Nicolas Maduro assinated.

Escrava Isaura's picture

Too soon, and it will be too obvious for that action of assassination. Conservatives need to get this over their heads that, the US situation, compared to others, still pretty good, even that most conservatives wish that America would crash, that  way they can be proved right, and vindicated. So, America just have to forget its conservatives and sit and wait. Venezuela is in the US background. No one is going to take it from America.

But, the organic growth left as well as most energy supplies are not in South America, the contrary is true.

About 75 per cent of the world's people live in Eurasia, and most of the world's physical wealth is there as well, both in its enterprises and underneath its soil. Eurasia accounts for about three-fourths of the world's known energy resources." 



new game's picture

remember this:NOT A FUKING THING USA CAN DO when the china/russia/silk road start trading oil for yuan/gold backed oil. do i need to repeat it? sure the MIC can war on. but when the world unites against it's common enemy, USA, the tide has turned. then look out as hyperinflation hits as the dollar is dumped. only solution for USA is to back the dollar with gold instead of violence. with the world ready to met violence with oil backed by gold the question becomes, where is the gold? and that is when the shit hits the fan, as in no gold left, fort knox is empty...

gold spikes to oil values, around 5k/ounce or moar. gold will become a winner again. the long wait is almost over. gold, baby gold. can't hardly wait as the fed will be crushed as their scheme finally runs out and billionaires become insolvent overnight.

is this a dream? the path is clear, as empires go down in a furry of smoke and self destruction. no, not a hollywood remake, just reality in our face, with denial by way too many idiots in high up places...

Akzed's picture

Amen. It's not like the govt ever confiscated gold.

Escrava Isaura's picture

US can’t back its economy on gold. No nation can. Unemployment will go to almost 100 percent, pretty much, everywhere. Russia perhaps 50 percent. Savings will evaporate. Basic things to survive such as water, food, and a roof over your head will become too expensive, and you won’t find most of it. No society will tolerate it. The government will have to do something.

So, once, or, if/when the dollar fails, America will take by force. Russia and China, especially Russia, know that they won’t survive 5 hours, if that.


TheReplacement's picture

Please do explain the whys behind your statements.  It will be interesting to see how you twist and turn to make the math not work.

Escrava Isaura's picture

If you think money is scarce now, and that the general population has been exploited, gold will exacerbate their pain.  

Mefobills: Gold as money floats in money supply, and hence is not under any velocity pressure.  Therefore, it likes to hide as savings.  This then makes money supply contract, and goods/services providers are forced to sell their goods and wares for cheap. 

Gold is shiny and doesn’t oxidize, and hence it can be stored and can wait-out providers of goods. Perishable goods go bad in time, with some goods like milk and eggs, and some grains going bad quickly.  This means that holders of gold in a money system have a usurious advantage over producers.  Gold holders just out wait producers and then extract their gains.

Non gold floating money can be created by law.  This type of money would match goods and services so that it doesn’t take rents in unequal exchange relation.

If a sovereign issues sovereign treasury money debt free, then it floats in the money supply to become savings.  Another 40 percent or so of the money supply should be sovereign credit, and this credit can be adjusted in interest rate,  to then compete against anybody who would like to take gains on their fellows by hoarding money supply.  Also credit of this type can be a drain knob to prevent inflation.  And, credit of this type can be targeted into the commons, to then multiply productivity. 

Gold cannot do the things needed for a modern economy.  It cannot flex to the normal S shaped curve of most economies, because its volume is relatively fixed.  Volume needs of a supply should be able to adjust as needed relative to goods and services production at full employment. It cannot be channeled easily into productive modes.

During post Bretton woods period up till 71, gold served pretty admirably as a medium for doing international trade.  It was limited to a circulatory path related to international exchange ONLY.  But, goods/services exchange between nations is only barter, and other means of marking barter can be employed to better effect, for example the bancor. 



BennyBoy's picture


 Gold backed currency has always been manipulated.

It's easy to do, ask Goldman.

Pumpkin's picture

'Your gold coins are too heavy and cumbersom, we have a solution for that'  Who the hell fell for that??  How the hell did we get here?

Swampster's picture

1913+Greedy ashkeNAZI jews+ Federal Reserve Act =  Death To America

Scuba Steve's picture

"the fed will be crushed as their scheme finally runs out and billionaires become insolvent overnight"

Disagree, when that time occurs billionaires will have their ass covered, mark it down.

My enjoyment will be seeing the weinies that would not fight the fight becasue their pensions and 401k's made them comfortable and put blinders on to what was happening behind the scenes and would not listen.

That is the shear enjoyment I will have ... have a few relatives that are liberal fukks that are some of the cockiest fukks you'll listen to.

omniplastic's picture

I don't understand how you and the gold bugs get this idea, that people dumping the dollar would lead to increased inflation.  It seems to me it would be a deflationary event.  Dollar would go to the moon, not the floor.  As less dollars get used, dollar velocity slows down.  If dollar based debt goes bad, dollar supply shrinks, hence, dollar up. 

nmewn's picture

"Africa will be give to Europe."

The dirty little secret is they already had it once. I guess Leopold of Belgium, France, Britain, Germany (ahem...Portugal) etc did such a bang up job they want to give it another shot? ;-)

Escrava Isaura's picture

I said post collapse that should happen between 2027/2032, when about 80 percent of crude oil is gone. Until then, US will plays a role in Africa.

By the way, if you think the Europeans have been bad to Africa, you, and the Africans, ain’t see nothin yet.


MK13's picture

80% of crude is gone? Libtard economics at work. There is always more crude, it's just what price.

Eurasia doesn't control dominant energy resources. Population based, North America is far ahead of anything Asia - particularly India - will mismanage.

Escrava Isaura's picture

Economic is not science. It is just another lie. O course, smaller lie than religion, but, the educated class buys into the economics lies 100 percent because they are highly indoctrinated. The general population go along because they are too stupid to tell the difference.

By the way, I believe in science because, if you want to understand how the universe, and the world work, science is the only way to understand both; however, I don’t believe science will lead humanity to a good outcome. It will lead humanity to the opposite.


TheReplacement's picture

China is all over Africa.  Africa will only go the the Euroweenies if they can conscript all the muzzies to go fight the chinks for Africa in the name of Allah.

I think the illegals in the US will be used in similar fashion in other theatres.


nmewn's picture

Same as it ever was, just a different century. 

Madolf Sanders Hitler's picture

U.S. is very slow to respong. We should have bought up 1/2 of by now. W. Africa (wiki..) has 18countries and ~362mil people. Theres' probably still time to buy up 1/2 of that for 1/2 a tril; increase union size to 60 (it's been too long). I.e. 50+9+puertorico. Obama was a failure. And very lazy thinking. And subservient to chicoms.

ali-ali-al-qomfri's picture

indeed, the love child (africa) has returned (to europe).


((and she aint pretty))

Yog Soggoth's picture

China has way more invested in Africa. Europe is fighting the caliphate.China also owns Costa Rica.

land_of_the_few's picture

The zoo animals story is like one of the sanity tests they do for suspected mad people before they decide whether they might need a padded cell- "how many giraffes are in the city?"  If you answer 12 or something then you're OK. "thousands" is probably not a good reply.

Divide say 12 giraffes (300kg meat each?) by about 5M people in metropolitan Caracas area, then you get pretty poor rations, approx 2/3rds of a gram bushmeat each, or 1/9th of a gram each if you include all Venezuelans (around 32 million).  And that's a one-time deal, presumably Cuba et al will not be sending them replacement giraffes, especially considering the frightful weather.


drendebe10's picture

Wonder who they had 2 fuk to win

BandGap's picture

China and India both use significant amounts of oil extracted from coal tars, which are very high in organic sulfur.

Sulfur oxidizes and eventually leads to acids (think acid rain). It is also a highly effective catalyst poison so it negates catalytic converters, not to mention using the oil as a source for plastics.

There are efficient ways (and pretty simple, actually) to remove sulfur from both coal tar and oil, but they do add ti the costs.

My guess is China and India don't care much about pollution.

Maduro is playing the only cards he has left.

Chandos's picture

I cllicked to see the women, and stayed for the music...

loves the truth's picture

Everyone is missing the point.All wars are zionist banker wars! They funded WW1 and WW2 on both sides, they make massive amounts of money on the debt, want perpetual warfare. Any country who refuses to use the US Dollar will have a regime change and be attacked with false propaganda then invaded.. Look at the mid east! Blood guilt dripping from them.

Dick Buttkiss's picture

They're deposits, not reserves, i.e., the latter being economically extractable, the former . . .

Caloot's picture

Not broke if oil is exchanged with gold.  

The_Juggernaut's picture

Who's going to pay him in gold?

stizazz's picture

Whether he dumps it or not, the US$ is already destroyed.