Wednesday, July 4, 2018

Why Everything the Western Media Tells You About Venezuela is Lies — Kit Klarenberg interviews Alan MacLeod

Over the course of two tumultuous decades, the US government has determinedly endeavored to destabilize, undermine and ultimately depose the democratically-elected government of Venezuela without pause. First they came for Hugo Chavez, then his successor Nicolas Maduro.

One wouldn't be able to discern this iniquitous reality from mainstream Western news reporting, however. Alan MacLeod, an academic specializing in media theory and analysis — and member of Glasgow University's respected Media Group — set out to discover why.
In search of answers, he compiled 501 articles, both news reports and opinion pieces, on Venezuela published in American and British newspapers during four pivotal periods in the country's recent history — Chavez's election as President in 1998, the failed April 2002 US-orchestrated right-wing coup, his death in 2013, and the incendiary, blood-spattered opposition protests of 2014. He also conducted extensive interviews with many journalists and academics covering events within and without Caracas.
His findings are compiled in the book Bad News from Venezuela: Twenty years of fake news and misreporting — speaking exclusively to Sputnik journalist Kit Klarenberg, he summarizes the most shocking.
One of the reasons is outsourcing the news reporting to biased sources.
"There've been huge cuts to journalism budgets in recent years, and mainstream outlets increasingly rely solely on major news agencies — Reuters, Bloomberg — for their information about foreign countries. As a result, a tiny cadre of Westerners — perhaps only a dozen people — are the source of most of the world's news about Venezuela. Furthermore, Bloomberg and Reuters have themselves outsourced much of their own reporting to local Venezuelan journalists, who are uniformly antagonistic to Chavez and Maduro," [MacLeod] explains....
MacLeod's advice to news consumers:
"What makes this state of affairs all the more egregious is such a distorted picture isn't inevitable — alternative media outlets, such as Al Jazeera, The Real News, Democracy Now, RT and Venezuela for instance, are home to much more balanced coverage. My advice is to read information offered by a number of sources, often published in parts of the world without major geopolitical interests that are opposed to the Venezuelan government. If you rely solely on western mainstream sources, you'll keep getting the same distorted picture and story," Alan concludes.
Sputnik International — Opinion
EXCLUSIVE: Why Everything the Western Media Tells You About Venezuela is Lies
Kit Klarenberg interviews Alan MacLeod, author of Bad News from Venezuela: Twenty years of fake news and misreporting (Routledge, 2108)

See also

Sputnik International
Trump Repeatedly Suggested Invading Venezuela, New Report Says


Kaivey said...

I was shocked years ago when i started reading in the Guardian newspaper anti Venezuela propaganda. I thought they would support Hugo Chevez. I should have sniffed a rat then.

Konrad said...

Propaganda works.

If politicians and corporate media outlets call a nation a “dictatorship,” then for most Americans the nation is a “dictatorship.” Most Americans have negative opinions about Cuba, Syria, Venezuela, North Korea, Zimbabwe, and all of the Empire’s targets.

Most Americans believe whatever politicians and corporate media outlets tell them regarding foreign nations.

Most Americans are not just gullible; they are smugly so. They have always been this way.

Footsoldier said...

Here's something that has been bothering me.

We know raising interest rates do the exact opposite of what they say they do. yet, every country under the sun raises interest rates when they come under attack.

They raise interest rates to defend their currency.

Why not just cut rates to zero or even negative to stop the attack ? It seems that raising interest rates actually does more harm than what the attack on the currency did.

Here's Warren talking about going from the Euro to the Lira when talking about Italy.

When interviewed Warren suggested you don’t actually leave the Euro and just start taxing in the Lira on a 1:1 basis. Then start spending in the Lira.

This gives the Italians independent fiscal policy and independent monetary policy.

He then says the most important thing is not to covert bank deposits from Euro to Lira. So say half the people in Italy want the Euro and the other half need the lira to make ends meet. If you convert everybody to Lira now those people who want Euro are very unhappy. So they have this Lira that they don’t want and what they do is sell the Lira to by the Euro.

The Lira can then drop 60% and the central bank does not know what to do ( there’s a suprise) so they raise interest rates which pushes the price of imports up by 50% or more and then the government does not know how to deal with that ( there’s another suprise) then the government collapses.

On the other hand if you don’t convert bank deposits everybody is happy. The people who have Euro who want the Lira. Have to sell their Euro’s and buy the Lira. Where are they going to get the Lira from as it is the new currency ?

The government can sell them the new Lira at a slight premium to the Euro say 1%. So now people can sell the Euro and get the Lira they want which creates a strong stable currency that does not go down. It wan’t to go up but the government sells it keeping in constant. Which means the government is getting all of these Euro’s for people who want Lira.

It uses that to pay off its Lira debt that helps it to get through the difficult transistion period without a collapse in currency. So it is important that you don’t force everybody to convert from Euro to Lira.

All Bank Deposits including central bank deposits. You do not convert the Italian bonds. They stay in Euro.

What I take away from that is in order to sell the Lira and drop the currency and then collapse the government. They have to have the Lira to do that. Warren’s proposal stops that as there are few Lira about and to get the Lira in the first place to sell it you have to first sell the Euro to get the Lira which keeps the Lira stronger.

It is also based on central banks doing what they always do and that is raise interest rates to defend their currency. Warren has worked away around that very nicely indeed.

So what bothers me is would you even need to do what Warren is suggesting if the central bank just cut rates to zero from the get go ?

Thinking about it you probably would because of the zombie reaction as soon as the central bank cut rates. They would do the wrong thing and Mr Market would sell off even more.

Footsoldier said...

What always makes the situation worse is the first line of defence of raising interest rates to protect the currency.

For me that is a HUGE mistake and only makes things worse. Raising interest rates do the exact opposite of what they say they will do.

It looks like the right move at the time because Mr Market moves to protect the currency as the market participants are moving it under a false understanding. Ultimately, it is short lived as the price hikes and the interest income channels will further weaken the currency.

If however, the first response was to slash interest rates to zero to defend the currency. Fundamentally that would work over the longer term. The problem being the short term reaction by Mr Market and the market participants would be the opposite they would continue to sell the currency under a false understanding.

So I like Warren’s proposals because you could actually cut interest rates to zero whilst carrying out what he suggests and I think that would defend the currency easily over the short and longer term.

GLH said...

The title should have been, "Why Everything the Western Media Tells You Lies"

GLH said...

Sorry "Why Everything the Western Media Tells You is Lies"

Matt Franko said...

Warren also said the negative ECB rates would rally the EUR as it would 'make EUR harder to get..." (relying on "supply and demand" I guess?) it collapsed from like 1.40 to 1.05...

It doesnt work via "supply and demand!"... this was just proven via the negative rate policy...

CBs provide currency Reserve Balances on demand and have unlimited supply...

Matt Franko said...

Its like oil right now... now one is lacking for oil... yet the price has gone up?

Trump is trying to get OPEC to increase by 2M bbls per day why? Everybody is already fully "supplied!"...

You can't say "its about price not quantity!" AND "supply and demand!" AT THE SAME TIME... it CANT be both...

Matt Franko said...

Daimler is the monopoly supplier of Mercedes-Benz automobiles in the US... Daimler sets the price for new Mercedes-Benz in USD terms...

Footsoldier said...

Warren was right about negative rates Matt. They should make the currency stronger.

He also explained why it went from 1.40 to 1.05.

" More recently, what the central bank has been doing, what Draghi’s been doing, has been tricking the world’s portfolio managers into selling euro by doing things that they think are inflationary, that they think are expansionary, things that cause a currency to go down, and those are negative interest rates and quantitative easing. All the world’s Western-educated now, they’ve all gone to The University of Chicago and Stanford and the London School of Economics, and they all know that pumping up the money supply through quantitative easing and negative rates makes the currency to go down and it causes inflation. They’re wrong, because it doesn’t, as I explained before. In fact, those policies remove interest income, they’re taxes on the economy, they actually cause the currency to get stronger, they cause the price pressures to go lower, you get deflationary pressures instead of inflationary pressures. We’ve seen the deflationary pressures on the euro right now, bordering on deflation. And the policies of quantitative easing and negative rates have done nothing to ease that.

Now, why has the euro gone down? It’s because they’ve frightened portfolio managers around the world into selling their euro. So you’ve got even the Swiss National Bank buy Swiss Francs with the euro, the Swiss National Bank takes the euro and they’ve kept 33% in dollars, so they’ve sold euro to buy dollars. I’m sure they’re scared to death of holding the euro because of the quantitative easing and negative rates. Same with the Bank of China or Bank of Japan. They’ve got all of these mainstream-type, traditionally-trained central bankers in just blind fear of holding euro right now, and so that’s temporarily kept the euro from appreciating, which it would have otherwise done because the lower euro has driven trade into massive surplus. I think the last numbers were a 31 billion euro trade surplus, for the last month.

The competitiveness is causing a trade surplus, which is sort of the point of the policy, but what that means is that when Americans buy an Audi or a Volkswagen…they take their dollars, they give them to the dealer, the dealer gives them to Mercedes or to Volkswagen, then they sell their dollars, buy euro, meet their payroll and build their reserves, whatever they do with their money. What happens when you are running a trade surplus is the world is selling dollars to buy euro, to buy products. Selling yen to buy euro to buy products. So it puts continuous upward pressure on the euro, which in this case has been offset by massive portfolio selling. You can look at the drops in central bank holdings from near 30 percent to under 20 percent reserves in euro right now. At some point that dries up.

Footsoldier said...

"An analogy would be if the corn crop failed because it didn’t rain and there was a drought. You would think that the price would go up because of supply and demand, but if a big company…had a huge warehouse full of corn, and had it backwards and decided to believe that the drought was going to cause prices to go down instead of up and they started selling their warehouse full of corn, well the price would go down even though there was a drought and a shortage, because all of the supply is coming out of the warehouse. That’s portfolio selling, so to speak. Eventually they’re going to run out, and there is a shortage, people are eating more than is being grown and the price is going to go up at some point, but depending on the size of their warehouse, the price can go down for a long time. It can go down for a year or two years, I can’t tell you the timing. But you can see the flows when you see the international accounts. You can see it’s going down and you can see the euro reserves are dropping all over the world in all of these official types of accounts, and they can only drop so far and then they’re gone. And as they do drop, they’re keeping the euro at levels that’s supporting a growing trade surplus, which is trading the euros out as fast as they’re selling them, and then they’re gone and then everybody’s underweight in euro or short, and they are no euro to buy back. Then it goes the other way."

Footsoldier said...

Warren knows it is the price Matt.

He knows it is the price with interest rates and cuts not quantity.

At the last MMT conference he also talked about gold prices when the FED hikes.

Matt Franko said...

“what Draghi’s been doing, has been tricking the world’s portfolio managers”

Conspiracy theory...

Matt Franko said...

There are banking/financial intermediaries involved in auto financing in the US... who have effectively fixed capital over the relevant frequency domain responses of price changes for the products (autos) being financed...

Calgacus said...

Thanks Footsoldier: I don't think Mosler is completely right about the Swiss. As I understood it, individual Europeans (rationally) fleeing the Euro kept buying Swiss francs enough that the CB was forced to accumulate an enormous amount of Euros to keep the franc from appreciating "too much" in their opinion, in order to support Swiss exporters. Eventually, there was a popular revolt against this, the CB being more under democratic control in Switzerland (imagine that) and it was forced to let the franc float up. Some of the CB reserves may go to the individual cantons and the Swiss people. Imagine that! Keeping 33% in dollars could force the sale of some Euros, that Mosler is talking about.
It can go down for a year or two years, I can’t tell you the timing.
Well, making ridiculous ceteris paribus assumptions, divide the stock of euros or corn by the flow out and you get a time, a ballpark upper bound.
Don't understand your rates question. EZ national CBs don't have control over Euro interest rates. The only way an EZ CB can have control over rates is to issue its own currency, which may be in fact, rather than in name. Reinstituting the Lira is leaving the Euro in the way that counts.