by Peter Koenig for The Saker Blog
Imagine an international currency backed by energy? By a raw material that the entire world needs, not gold – which has hardly any productive use, but whose value is mostly speculative – not hot air like the US dollar. Not fiat money like the US-dollar and the Euro largely made by private banks without any economic substance whatsoever, and which are coercive. But a currency based on the very source for economic output – energy.
On February 20, 2018, Venezuela has launched the “Petro” (PTR), a government-made and controlled cryptocurrency, based on Venezuela’s huge petrol reserves of about 301 billion barrels of petrol. The Petro’s value will fluctuate with the market price of petrol, currently around US$61 per barrel of crude. The Petro was essentially created to avoid and circumvent illegal US sanctions, dollar blockades, confiscations of assets abroad, as well as to escape illegal manipulations from Florida of the Bolivarian Republic’s local currency, the Bolívar, via the black-market dollars flooding Venezuela; and, not least, to trade internationally in a non-US-dollar linked currency. The Petro is a largely government controlled blockchain currency, totally outside the reach of the US Federal Reserve (FED) and Wall Street – and it is based on the value of the world’s key energy, hydrocarbons, of which Venezuela has the world’s largest proven reserves.
In a first batch Venezuela released 100 million Petros, backed by 5.342 billion barrels of crude from the Ayacucho oil fields of Orinoco; a mere 5% of total proven Venezuelan reserves. Of the 100 million, 82.4% will be offered to the market in two stages, an initial private Pre-Sale of 38.4% of so-called non-minable ‘tokens’, followed by a public offering of 44% of the cryptomoney. The remaining 17.6 million are reserved for the government, i.e. the Venezuelan Authority for Cryptomoney and Related Activities, SUPCACVEN.
When launching the currency, on 20 February 2018, Vice-president Tareck El Aissami declared, “Today, the Petro was born and we will formally launch the initial pre-sale of the Venezuelan Petro. Venezuela has placed herself in the vanguard of the future. Today is a historic day. Venezuela is the first nation to launch a cryptomoney, entirely backed by her reserves and her natural riches.” President Maduro has later affirmed that his country has already entered contracts with important trading partners and the world’s major blockchain currencies.
Can you imagine what this means? – It sets a new paradigm for international trade, for safe payment systems that cannot be tampered with by the FED, Wall Street, SWIFT, New York courts, and other Washington puppets, like the European Central Bank (ECB), the unelected European Commission (EC) and other EU-associated Brussels institutions. It will allow economic development outside illegal ‘sanctions’. The Petro is a shining light for new found freedom from a hegemonic dollar oppression.
What is valid for Venezuela can be valid for other countries eager to detach from the tyrannical Anglo-Zion financial system. – Imagine, other countries following Venezuela’s example, other energy producers, many if not most of whom would be happy to get out from under the Yankee’s boots of blood dollars inundating the world thanks to uncountable wars and conflicts they finance – and millions of innocent people they help kill.
Rumors have it, that in a last-ditch effort to salvage the faltering dollar, the FED might order the IMF to revert to some kind of a gold standard, blood-stained gold. – Of the 2,300 to 3,400 tons of gold mined every year around the globe, it is estimated that about a quarter to a third is illegally begotten, so called ‘blood’ gold, extracted under the most horrendous conditions of violence, murder, opaque mafia-type living (and dying) conditions, child labor, sexual enslavement of women, many of whom way under-age, abject poisoning of humans with heavy metals, mercury, cyanite, arsenic and more, contamination of surface and underground water ways, vast illegal deforestation of tropical rain forests – and more. That’s the legacy of gold, the MSM, of course, doesn’t talk about.
That’s what the west based its monetary system on until 1971, when Nixon decided to replace gold with the fiat dollar which then became de facto the world’s major reserve currency, albeit declining rapidly over the last twenty years. In desperation, Washington might want to apply another gold-based international norm to salvage the faltering dollar. Of course, a norm designed to favor the US, with the rest of the western and developing world destined to absorb the astronomical US debt.
Since the world’s major goldmining corporation and the illegal gold-digging mafia networks work hand-in-hand, smuggled gold works its way intricately into the dominium of shady traders, many of whom also deal with so-called white gold (drug powder), washing gold and drug-money simultaneously, thereby confounding and obscuring the origins of either. Eventually this illegal gold is purchased by major gold mining or refining corporations mixed with ‘legal’ gold, so that the illegal portion is no longer traceable.
Therefore, every ounce of gold that would back our money, the purchases of our livelihoods would be smeared in blood, in children’s abuse and death, in murdered and enslaved women and men, in poisoned water ways and in a contaminated environment. But the world wouldn’t go for it. No more. There are healthier and more transparent physical assets to back up international currencies, i.e. the Petro, backed by energy. Though not free from socio-environmental damage, petrol-energy may gradually convert into alternative sources of energy, like solar, wind and aquatic power or a combination of all of them.
What the world is to aim for is a monetary system based on each nation’s or group of nations or societies economic output. Today it’s the other way around – it’s the fiat money, designed by the Anglo-Zionist masters of finance, that defines economies. Thus, economies in our western world are prone to be manipulated by the rulers and their institutions – FED, IMF, World Bank, World Trade Organization (WTO) – that support the debt / interest-based monetary rules – they are purposefully maneuvered into booms and busts. With every bust, more capital is transferred from the bottom to the top, from the poor to an ever-smaller elite. The energy-based Petro is a first step away from this sham.
Imagine the Petro was to become the new OPEC currency! The world would need Petros, as it used to need US dollars to buy hydrocarbon energy. But Petros are blockchain-safe, less vulnerable for manipulation. They are not coercive, they are not made for blackmailing ‘unwilling’ nations into submission; they are not tools for violence. They are instruments of equitable production and trade. They are also instruments of protection from the fiat money abuses.
The world’s ten largest hydrocarbon producers
Ranking | Country | Petrol (billion barrels) |
1 | Venezuela | 300.9 |
2 | Saudi Arabia | 266.5 |
3 | Canada | 169.7 |
4 | Iran | 158.4 |
5 | Iraq | 142.5 |
6 | Kuwait | 101.5 |
7 | Emirates | 97.8 |
8 | Russia | 80.0 |
9 | Libya | 48.4 |
10 | Nigeria | 37.1 |
Total | 1,402.8 |
Source: http://geab.eu/en/top-10-countries-with-the-worlds-biggest-oil-reserves/
have a capital base of 1.4 trillion barrels of crude. Not bad to start a worldwide cryptocurrency, based on energy, controlled by energy and by all those who will use energy – that might become a world reserve currency, at par with the Chinese economy- and gold-backed Yuan, but much safer than the fiat currencies of the US-dollar, Euro, British Pound and Japanese Yen.
We are talking about a seismic paradigm shift. Its potential is unfathomable. The move away from the US-dollar hegemony might result in an implosion of the western monetary structure as we know it. It may stop the predator empire of the United States in its tracks, by simply decimating her economy of fraud, built on military might, exploitation and colonization of the world, on racism, and on a bulldozing scruple-less killing machine. The Petro, a secured cryptocurrency based on energy that everybody needs, might become the precursor for an international payment and trading scheme towards a more balanced and equitable approach to worldwide socioeconomy development.
Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21st Century; TeleSUR; The Vineyard of The Saker Blog; and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 3 0 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.
Using a technology that has been developed in the west, implies risks for those willing to emancipate.
I would like to see that someone would address the risks and vulnerabilities in this bold step taken by Venezuela.
https://www.zerohedge.com/news/2018-02-23/venezuelas-new-cryptocurrency-just-another-form-control-fraud
Ask and you shall receive :)
PS. I don’t agree with everything in the article but it does explain that without easy convertibility to the underlying commodity then it really isn’t backed. A different take to be sure but an alternate POV.
As long as the government doesn’t debase the blockchain currency by suddenly announcing that it was issuing more and did not attach it to new resources it might work.
Several countries will never agree to anything but the US dollar. Saudi Arabia and Canada are two. Just pure self preservation on their parts so understandable.
You have hit the nail on the head. There’s no reason to believe that Venezuela will not do exactly the same thing that every government in history eventually does-default on the debt. This could as easily be done with cryptos as anything else.
It’s a step in the right direction, because it might help wean Venezuela off of the dollar, but the backing of oil reserves, while a novel idea, does nothing to prevent currency default.
… based on Venezuela’s huge petrol reserves of about 301 billion barrels …
… , backed by 5.342 billion barrels of crude from the Ayacucho oil fields of Orinoco; a mere 5% of total proven Venezuelan reserves. …
I don’t know about the unit of the size of the proven reserves, but you managed to mix up the numbers. Did you mean 301 trillion barrels?
okay, … maybe the mistake is on my side.
Numbers US style: 1.23; European style: 1,23
Imagine an international currency backed by energy?
Or, imagine a world not dependent on oil.
Unfortunately, Venezuela, as with Cuba, is a test bed for the New World Order.
Fidel Castro
CIA Agent
http://mileswmathis.com/castro.pdf
Who is behind the Etherium platform and why would ‘Socialist’ Venezuela chose a technology promoted by the J.P Morgan and Microsoft?
Big Business Giants From Microsoft to J.P. Morgan Are Getting Behind Ethereum
http://fortune.com/2017/02/28/ethereum-jpmorgan-microsoft-alliance/
The plan is to create an inescapable system of Perfect Enslavement, by placing everyone on an electronic crypto currency teet.
Never again will your wealth be your own.
Once you are placed on the crypto teet, an opportunity that will present itself when the US dollar is intentionally collapsed, your every action and word will have to be weighed against the possibility that with just a few keystrokes you can be completely stripped of everything that you own.
Silly crypto conspiracies… if you had even basic knowledge of how cryptocurrencies work you would know you can’t just be “stripped of all your wealth” with a few keystrokes. That’s how bank accounts work – Not cryptocurrencies. On the contrary, you could put millions in wealth on a USB drive and no one would be any the wiser. Then you could hide it anywhere you wanted — it would not be traceable. Even cash is less safe than this, because it requires a large volume of space to store millions. If you lose the USB drive, you can force yourself to memorize the private key, then you can restore it at any time and recover the funds (or keep backups written down on a piece of paper in safe location).
As for Ethereum, Vitalik Buterin is a stand up guy who genuinely cares about the human race and wants to work to improve it. He isn’t some super villain. Come on now..
Interesting article. I would like to learn more about “blood gold”. I’ve heard of blood diamonds, but never heard about murdered children and enslaved women as a result of gold mining operations.
I’m also surprised by the top 10 HC producer list. The list I have (2016 data) says Russia is tops, followed by the SA and the USA. Venezuela is 11th:
https://en.wikipedia.org/wiki/List_of_countries_by_oil_production
I think the list provided was for proven reserves-quite a different thing from oil production.
wow – that’s the first time I ever wanted to buy stock – I’m going to try and buy some Venezuelan Petro –
hi Peter Koenig – you make me want to go out and buy some stock in Venezuelan Cryptocurrency –
I see that Russia has been placed No. 8 in hydrocarbon production. Absolute nonsense. Russia has been No.1 since 2005, something the West does not wish to admit. When it comes to Saudi Arabia, I don’t know how much oil it produces a year, but it’s official oil reserve estimates have been INFLATED by 80 %, as Saudi Arabia has been drilling oil for more than 70 years, and it’s oil reserves are depleted. This is the reason it tried invading Yemen, the intention being to grab the untouched Yemeni oil. It failed.
When it comes to oil payments, the days of the dollar as the reserve world currency are coming to an end. China has announced the petro-yuan, while Russia and China are already trading in domestic currencies. The Venezuelan “Petro” is just the latest trend in the discarding of the US dollar. According to one analyst, the US Government is preparing to introduce a new dollar for domestic use. If true, then it’s not surprising, taking into account the latest developments.
BF, all of the sources I looked at had Russia #1 or close to it. The list in the article is incorrectly marked as “production”, when in reality it is really for proven reserves…two markedly different things, as I noted in my post above and provided a link.
jon
Even if the list pertains to reserves, it is still incorrect. Russia is huge, with oil reserves still to be discovered, and this does not include the Arctic.
the confusion is in reserves vs production. the table in the article is referring to reserves not to production. Production is a different table altogether: SA No. 1, US. 2, Russia 3 – or it depends what month of the year you look at – these days when oil manipulation is still of the order…
I too thought that Russia had the largest proven reserves. Or, reserves—maybe not “proven.” I think that is a technical term that might be interpreted different ways.
I worry about the vast amount of energy required to run the computers that support the cryptocurrency.
I have read somewhere that the energy required (1) to run the computers and (2) to keep them cool enough is enormous.
Katherine
The advent of cryptocurrencies is an extremely important development. Not just the dollar needs to be dropped but practically every central bank on Earth needs to get thrown in the garbage bin. This is only possible through the creation of not just one but thousands of individual cryptocurrencies, any of which can serve a different purpose. Let the banks and their system of debt enslavement burn, I say.
A lot of people are skeptical of bitcoin, ethereum and the like but right now they are the best option we have. They are decentralized, meaning controlled by no one, impossible to shut down, and if secured correctly, provide better security than a bank and can’t be touched by the government. There is no one stopping you from sending any amount of money you want to anyone in the world without Big Brother forcing you to fill out some forms and say No, you can’t do that.
If you want to drop the dollar and stop the federal reserve from funding war then this is how you do it. You just need to convince the masses that crypto is superior to their occultist all-seeing eye paper money dollars.
The creation of the Petro is just one step in the right direction. A better solution would be to wean the world off of oil entirely. But, it’s still a step in the right direction. A little tiny baby step. One at a time.
Good intentions here but bad economics. To back money with anything but a social contract is to lock humanity into another straight jacket similar to gold. Here’s the real deal about currency issuers, currency users, federal money, bank money, and the incredible, yet-to-be realized opportunites afforded by fiat money…IF (the big if) the people can regain control of their currency-creating governments.
https://www.youtube.com/watch?v=tPupNqVNdS0
Thanks for the link that you’ve provided. Imho Peter Koenig, Richard D. Wolff and Michael Hudson seem to understand the monetary system better than many other economists. Nevertheless I’ll have a look into the videos of Steve Grumbine and his explanations of economic theory. Maybe he has to offer some new insights, although I’m quite skeptical (maybe bias?), because of two videos on his channel that try to debunk the view of a private Federal Reserve as pure nonsense spewed by uninformed / misled people or right-wingers. (check: https://www.youtube.com/watch?v=W-FX8vNvUHY “Dr Steven Hail Debunking the conspiracy theories about the Federal Reserve” and https://www.youtube.com/watch?v=KRtxWtGzcgA “Rohan Grey: History of the Federal Reserve”).
Unless is is readily convertible into oil, it is not actually backed by oil.
“If Venezuela’s petro cannot be converted directly into deliverable-upon-demand oil contracts, it’s not backed by anything.”
More: http://charleshughsmith.blogspot.com/2018/02/venezuelas-new-cryptocurrency-just.html
Blockchain has to run through the Web. The Web is NSA. Venezuela is simply walking into Deepstate’s trap. Maduro’s problem is not socialism; Maduro’s problem is that Maduro is an IDIOT.