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Revolucion ! It started happening the day after tomorrow

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From the Archives : Originally published August 29th, 2006
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Category : Gold University

The Wallace Street Journal, from the Archives

Wallace, IdahoThe 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

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David Bond covers gold and silver mining equities for a number of national and international publishers from Wallace, Idaho, heart of the planet's richest silver fields, the Coeur d'Alene Mining District.
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Just one hint. Maybe you will be the next Orson Welles of the news about financial panic if instead of using the name of Chavez you had used the one of the actual president of Venezuela, Nicolas Maduro. For the rest of your article, congratulations.
Maybe you should have looked at the date of the article and took notice that it was posted again as "from the archive".
Latest comment posted for this article
Maybe you should have looked at the date of the article and took notice that it was posted again as "from the archive". Read more
prljr - 12/10/2014 at 9:29 PM GMT
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