Venezuela, Iran, China and the “Axis of Piracy”
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The storage locations are odd because Chavez government’s rhetoric is clearly anti-American. This gets even stranger when considering one of the largest Venezuelan corporations is CITGO, a US-incorporated, Venezuela-owned refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals and other industrial products. Moreover, the United States is Venezuela's leading trade partner. During 2002, the United States exported $4.4 billion in goods to Venezuela, making it the 25th-largest market for the US. Including petroleum products, Venezuela exported $15.1 billion in goods to the U.S., making it its 14th-largest source of goods.
Despite that, on September 10, 2009, Chavez gave a speech at the Peoples’ Friendship University of Russia in Moscow declaring that the United States is “the greatest terrorist in world history,” adding that the “Yankee empire will fall. It's already falling, and will disappear from the face of the Earth, and it's going to happen this century.”
Yet, Chavez’ gold and corporations seem to favor the USA. Why is he financing what he defines as “terror?” Does that mean Chavez is nothing but an American patsy, preaching something but doing something else for the sake of a private Golden Calf?
Behind the Smog
Can one make sense out of this contradictory data? Why Chavez began bringing back the gold only in 2011, 12 years after he took power? In November 2011, he brought more than 160 tons of gold (reports on the amount vary) from the Bank of England, while making a huge media show of it. History is never an exact repetition of itself. It seems that in 2011 Venezuela surrendered once again to the burdens of external debt. This time it was the debt to the Chinese. In exchange for the increasing Venezuelan debt to China, the latter requested Venezuela to increase its gold reserves. Thus, Chavez brought its own gold back; after all, no one can really trust a pirate’s coffer, even if it is deep below the City.
This last claim is true also in an alternative explanation claiming this is an attempt to reduce Venezuela’s assets abroad. These risk seizure in the event that sanctions would be imposed as a result of several pending international arbitration cases, with a number of major oil companies pushing for compensation after their Venezuelan operations were expropriated. However, the Chinese issue is more pressing.
Sino-Venezuelan trade was less than $500m per year before 1999. After Chavez took over, they reached $7.5bn in 2009, making China Venezuela's second-largest trade partner. Venezuela became China's biggest investment destination in Latin America. However, as all Latin American economies, Venezuela’s economy is centered on raw materials; the industrial era is still to arrive to this part of the world. This means it is very hard for this economy to balance itself, despite how rich it is in petroleum. Thus, the Chinese government wants golden securities to its debt. Venezuela’s $32bn debt with China exceeds the value of its sovereign debt. In other words, China owns Venezuela.
In 2006, Venezuela joined Cuba and Syria as the only nations to vote against a UN Atomic Energy Agency resolution. The latter reported Iran to the Security Council over its failures to abide UN sanctions to curtail its nuclear program. A year later, Venezuela and Iran declared an “axis of unity” against the US and Ecuador during a visit of Chavez to Tehran. In June 2009, Venezuela supported Ahmadinejad re-election, rejecting the Western claims of the elections having been rigged.
Iranian investments in Venezuela are continuously rising. Iran and Venezuela have signed various Memoranda of Understanding on technology development, cooperation on banking and finance and, oil and gas exploration and refining. In April 2008, the two countries signed a Memorandum of Understanding pledging full military support and cooperation. United Press International reported in that August, that Iranian military advisers have been embedded with Venezuelan troops. The Iranians have also opened International Development Bank in Caracas under the Spanish name Banco Internacional de Desarrollo C.A., an independent subsidiary of Export Development Bank of Iran.
‘“Follow the gold’s path and discover the true allegiances” is often a sound and reliable counsel,’ I began this article. Now I am returning to it from a better angle. In the past, Iranian entities have employed complex systems for moving money all over the world without detection. This is due to ongoing difficulties imposed by the US and its allies. Venezuela’s established financial system has been used to circumvent these economic sanctions. In April 2009, a company called Limmt and its Chinese national manager, Li Fang Wei, was accused by the US government of having an active role in the proliferation of weapons of mass destruction to Iran. Subsequently, the company was banned from engaging in transactions with or through the U.S. financial system. Limmt used aliases and shell companies to deceive banks into processing payments related to the shipment of banned missile, nuclear and dual-use materials to subsidiary organizations of the Iranian Defense Industries Organization. This is the link to the last side in this intriguing triangle, the Sino-Iranian relations.
The main pillar in the relations between China and Iran is the import of Iranian oil and gas by China. Trade was less than 2 billion in the 1980s. It was catapulted to $30 billion in 2010, and is expected to increase to $50 billion by 2015. This means major financial interests, which invariably lead to cooperation on security issues. China is believed to have helped Iran militarily in the training of high-level officials on advanced systems, technical support, in the supplying of specialty steel for missile construction, in supplying control technology for missile development, and other related issues related also to nuclear technology. Apparently, China is responsible for aiding in the development of advanced conventional weapons including surface-to-air missiles, combat aircrafts, radar systems, and fast-attack missile vessels. In a collateral corroboration event, an article I published (Iran Hits American Satellite, December 17, 2011) was translated into Chinese and became the main headline of The 4th Media that day. This was due to my mentioning China was the source of the Iranian new technology. There is little doubt that we are seeing the formation of a significant alliance between the three countries.
“Miscalculating Our Resolve”
On January 18, 2012, US General Martin Dempsey, chairman of the Joint Chiefs of Staff, said in an interview with CNN that preparations are being made for a possible strike in Iran, while warning the Tehran regime against “miscalculating” the American intentions and playing a dangerous game that could lead to a disaster.
Next day, US Ambassador to Israel Daniel Shapiro, said that Washington has prepared a set of alternative options to deal with Iran’s nuclear program, should the financial sanctions prove futile. That was a diplomatic definition of “war.”
“Miscalculating Our Resolve” were General Dempsey exact words. They may turn out as being highly ironic, as the “bankers’ chutzpah” abovementioned. Does America think it can attack a major Chinese ally without facing at least financial sanctions from China? Is General Dempsey miscalculating the cost for America of renouncing to Venezuelan oil? Can America pay overnight its debt to the Chinese? Does the “Axis of Piracy” think it still owns the world?
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