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The Wallace Street
Journal, from the Archives
Wallace, Idaho – The following is a
true story. It all started happening day after tomorrow:
Chaos continued to
confound world energy and metal markets today on news that Venezuela would
accept only silver for American oil payments at a rate of 5 ounces of .999-fine
silver per barrel of oil.
Hugo Chavez, president of
the oil-exporting South American nation, said last Friday that Venezuela had
sufficient “United States Fed promissory notes” in its foreign
exchange accounts that it fears future accumulations would render Venezuela
“far more susceptible to gyrations in the U.S. economy and foreign
policy than we care to be. We don’t need no
more stinking Yankee dollars,” he added.
Oil, prior to
Chavez’s announcement, was trading for $75 Fednotes
per barrel; silver for $12 per ounce. The Venezuela ratio of 5 ounces per barrel
confused mainstream media analysts and sent the US dollar plummeting in overnight trading as traders
scrambled to get into silver or silver-equivalent gold physicals in
anticipation of much higher opening prices tomorrow.
Chavez hinted that
Venezuela would consider accepting silver- or gold-equivalent-backed paper
currency in exchange for oil at the same ratio, but added, “I
don’t think, other than the Liberty Dollar, that there are any.”
“This is just plain
dumb,” fumed Fox News analyst Bill O’Reilly. “It just goes
to show you once again how backward and stupid South America is. Here’s
Hugo Chavez, he can’t even add. He’s willing to take $60 worth of
silver instead of $75 in cold, hard U.S. paper for his oil. Silver is a
barbarous relic; it hasn’t been money for years! How dumb can you
get?”
However, religious
commentator Pat Robertson, sensing something more complicated was afoot,
renewed his call for Chavez’s assassination. “Whatever he’s
up to, it’s not going to be good for America. We’d better nip
this Bolshevik in the bud, the CIA way,” Robertson said.
At 1.1 million barrels
per day, Venezuela is the U.S.’ fourth-largest supplier of crude oil,
behind Canada, Mexico and Saudi Arabia. Venezuela’s exports to the U.S.
account for one-third of Venezuela’s total daily output and 10 percent
of U.S. total crude imports.
Weekend trading in Asia
showed the effects of Venezuela’s oil-for-silver swap resulting in a
rise in silver to $20/ounce and a commensurate jump in oil to $100/bbl. Gold
was also up.
Analysts without
television shows wondered where the United States would get enough silver to
pay for its Venezuelan oil, even at the discounted rate of 5 million ounces
per day. Prior to 1980, sufficient government and bank stockpiles existed in
the U.S. to sustain Venezuelan imports for a year or longer. Now, however,
all U.S. silver is gone and daily U.S. silver production is a mere 107,397 ounces per
day.
Fearing a collapse of the
New York and Chicago silver contracts similar to the collapse of the London
Metal Exchange nickel contract earlier this month, nervous holders of
purchase contracts were already lined up around both exchanges early Sunday
morning, hoping to be first in line for delivery when the NYMEX and CBOT
opened Monday.
The same scene was
reported around Bank of America, Citibank, Wells Fargo and other major
federally-chartered banks in U.S. cities, where nervous depositors were
hoping to be among the 3 percent actually able to
redeem their accounts for cash.
In Washington, D.C.,
White House sources said the President would declare a “gasoline
station holiday” on Monday for an indeterminate period of time, in
hopes that “hoarders” would not abuse the crisis by filling up
their automobiles. “This will not stand, and is proof that Venezuela is
hiding weapons of mass destruction and has an active nuclear program under
way,” a leaked copy of the President’s speech is purported to
have him saying.
Elsewhere in Washington
today, from the rooftop of the Federal Reserve building at 20th Street and
Constitution Ave., several eyewitnesses reported seeing a large helicopter
depart.
David Bond, editor
The Silver Valley Mining Journal
www.silverminers.com
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