Tuesday, December 30, 2008

Rusoro Expects Venezuela Production in Second Quarte

Rusoro Mining Ltd., a Russian-funded company buying gold deposits in Venezuela, expects to start producing the precious metal at its Increible-6 mine in the second quarter after securing government approval.

The company will revise its production forecast for next year after Venezuela’s government approved technical and environmental studies for the mine, Chief Executive Officer Andre Agapov said today in a phone interview. Venezuela’s Official Gazette announced the mine’s approval on Dec. 23.

“It’s fantastic news,” Agapov said of the decision. “It changes our projections for 2009,” he said, without providing further information on the Vancouver-based company’s forecasts. Increible-6, an open-pit mine, has almost 3 grams of gold per ton of ore, more than the 1.6 grams the company gets from its Choco10 mine, also in Venezuela, he said.

Rusoro also is the government’s preferred partner to set up a joint venture to exploit Las Cristinas, which has Venezuela’s biggest known gold deposit, Agapov said Nov. 14. The company has a “lot of common ground” with the government, he said.

The company is attempting to take over Gold Reserve Inc., which has rights to exploit the Brisas gold mine adjacent to Las Cristinas. The company wants to create a joint venture with Venezuela to develop the mine, Agapov said. He declined to say whether he would make an offer for Las Cristinas.

Environmental Permits

Development of Las Cristinas and Brisas has been frozen since owners Gold Reserve and Crystallex International Corp. failed to win environmental permits for the mines this year. Brisas will cost $500 million and take four or five years to bring into production, Agapov said. “The way we foresee it is to develop it jointly with the Venezuelan government” in a 50-50 joint venture, he said. “It’s an assumption. Nothing is agreed.”

The government will provide half the capital for the mine, and the company would raise the other $250 million, he said. “It’s not that difficult to raise half the capital expenditure if you have a half already committed,” Agapov said.

Rusoro rose 5 cents, or 8.1 percent, to 67 cents a share today in Toronto. The shares have fallen 58 percent this year. “We’re trying to be very proactive,” Agapov said of the offer for Gold Reserve and other takeovers in 2008. “It looked like we were the only interested party, and we took advantage of it. If 2009 is a similar story, we’ll be even more proactive.”

Looks like Venezuela will see more violence in 2009 as the real battle begins

VHeadline News Editor Patrick J. O'Donoghue writes: There seems to be little doubt that things will hot up in Venezuela in the New Year.
  • First of all, the government and opposition have opened a political battle front on a constitutional amendment to abolish term limits to the presidency.
  • Secondly and possibly more important, will be the outcome of constant skirmishes in state governments and municipalities.

Although the opposition won several important beachheads, such as the Metropolitan Mayor's Office of Caracas, Carabobo and Miranda states, as well as the Caracas municipality of Sucre, the government dominates the majority of municipalities and local councils throughout Venezuela.

Yet, despite the constant presence of President Chavez in Zulia State over the last year and an injection of funds for important infrastructure works, he was unable to secure for the first time in 10 years the state governorship and even went so far as losing the important Maracaibo Mayor's Office.

It is also becoming clear that funds will be arriving through multilateral organizations, such as the Andean Community Fund (CAF) and via third-flag channels from USA old faithfuls that have already lost millions of dollars to incompetent and corrupt domestic lackeys.

During the year then, we expect to see a new development: the re-emergence of sleeper non-governmental organizations (NGOs) that once dominated and ruled the civil sector in the decade before the arrival of President Chavez. They will gobble up the new flow of funds as advisers and social flag bearers for Ledezma, Capriles Radonski, Ocariz and others. But we will be seeing newer NGOs vying for power and control.

The current battle campaign raging revolves around who can solve the garbage problem in Caracas. On the government side, Jorge Rodriguez is the lone ranger confronting Ledezma and the four opposition run municipalities. Perhaps the garbage problem is greater than any of the contenders as opposition Sucre Mayor, Carlos Ocariz discovered to his cost after the Christmas holiday with the streets littered with Christmas rubbish.

One doesn't need to be much of a diviner to forecast that this year will see greater political violence as both sides struggle for power to control the streets, especially in barrio areas of the main cities, not forgetting campaign pledges to drastically lower common homicide and crime rates.

Violence in the countryside will continue as usual, largely unreported, with the deaths of more pro-government peasant and small farmer leaders.

The coming struggle must be put within the context of the economic crisis, which will indeed affect Venezuela, whatever the government says. It could be a blessing in disguise for the government, if the many Socialist enterprises and cooperatives in the countryside start pulling their weight and producing. The same can be said for the mainly disappointing communal councils, which, it must be admitted, have not, on the whole, been good administrators of monies received.

There are some people who are calling for a dialogue between both sides for the good of Venezuela but there is little indication that either side is willing to enter into negotiations. There is no way that the opposition will tolerate participative democracy and it remains to be seen whether the majority of people supporting President Chavez will be satisfied with representative democracy.

Chavez has acknowledged the reality of many, the so-called "ni-nis," who support his achievements but who do not agree with his tirades, improvisation and tendency to support sycophants and yes-men. After ten years, what has he left to offer them politically, other than genuine purges?

Of course, the Armed Force will be a key element in developments next year, especially the role of the reservists, of whom little has been heard during the past year and during the electoral campaign.

The advance of Socialism in Venezuela is in the balance and depending on the leadership of the PSUV and la conciencia del pueblo could end 2009 on a sound footing or the slippery slope.

Patrick J. O'Donoghue


Venezuela is facing the most difficult period of its history with honest reporters crippled by sectarianism on top of rampant corruption within the administration and beyond, aided and abetted by criminal forces in the US and Spanish governments which cannot accept the sovereignty of the Venezuelan people to decide over their own future.


Economic Growth Slows in Venezuela as 2009 Outlook Turns Grim

Confirmation that Venezuela's petroleum-reliant economy was slowing down before the global financial store took its toll on world oil production, prices and demand has come with the regular end-of-year bulletin from the central bank.

Preliminary estimates from the Venezuelan Central Bank (BCV) show that gross domestic product (GDP) expanded by 4.9% this year compared with 8.4% in 2007. Within this year's total, oil GDP rose by 3%, while the non-oil economic increased by 5.3%.

Economists say that the slowdown in economic activity was not necessarily a bad thing after GDP increases of 10.3% in 2006, 9.4% in 2005, and 17.9% in 2004, when the economy was climbing out of the worst recession on modern record in Venezuela. Post-slump high growth prompted warnings that the economy was in danger of over-heating. Economists drew gloomy portraits of an economy imploding and everything ending in tears. As it is, inflation continues to plague the economic outlook. The BCV calculated the "inflationary cost" at an accumulated 27.6% in the 11 months up to and including November. This compared with 22.5% during the whole of 2007.

Finance Minister Alí Rodríguez Araque recently lifted the official inflation forecast for this year to "about 30 percent." Private sector economists say this is "just for starters" and that the real outcome will probably be somewhat higher. That, they add, assumes that the official index issued by the National Statistics Institute (INE) "reflects reality", which is in doubt because of the doctoring done by the INE to include Mercal food prices not generally and widely available.

As has long been the case in Venezuela during the good times, economic growth was led by oil, where production rose by three percent this year. Latest figures from the International Energy Agency (IEA) show that Venezuelan production began to reflect the global downturn in November. The IEA, which like the Organization of Petroleum Exporting Countries (OPEC) tends to put Venezuelan production at levels lower than the government and the state oil corporation, Petróleos de Venezuela (PDVSA), estimated overall Venezuela output at 2.35 million barrels a day (bpd) last month. This was unchanged from October but slightly down from 2.37 million bpd in September, when PDVSA and the government were still claiming that overall Venezuelan production was running at anything up to 3.1 million bpd. The variance between the official version of events and what everybody else thought was actually happening has never been explained. Inevitably, the gap prompted suspicions that officials were inflating the figures for some reason or other. It's now been quite a time since officials including Energy and Oil Minister Rafael Ramírez (who doubles up as PDVSA president) talked up the output estimates.

Outside the all-important oil sector, non-oil GDP expanded by 5.3% this year. The chief driving forces behind this were consumer demand, which rose by 6.4% compared with 2007, and state sector activity, which increased on the same measure by 5.7%. Overall, the country had a balance of payments surplus of nearly $4.16 billion in 2008, contributing to net international reserves of $37.35 billion, the BCV said. With oil prices now less than a third of their average for the year, that surplus is likely to evaporate in 2009.

Finance Minister Ali Rodriguez said Dec. 19 that the government is considering adopting different economic measures in response to the global financial crisis and is leaving no options off the table.

Chavez said in that regard Saturday that he plans to announce measures to mitigate the consequences of the world economic slowdown, including some aimed at reducing Venezuela's dependence on oil revenues, which account for roughly 90% of the country's export earnings.

Monday, December 29, 2008

Caracas Crime Does Not Stop for Christmas in Venezuela

Violent crime reflected in one of if not the highest per capita murder rate in the world continues to hog headlines even during the festive season in Venezuela – and despite the government's best efforts to keep a lid on the news as much as the bad guys.

Interior and Justice Minister Tarek El Aissami claimed that crime in Metropolitan Caracas this month so far was 22% down on the same period a year before. But, as has by now become the custom, he didn't issue any figures to back up that claim.

Just why the government subscribes to the absurd notion that reporters will simply take the minister's word at face value remains unclear. If the purpose is to lower the profile on crime reporting, the ban merely adds to the tendency of the more reptilian reporters on the crime beat to dig out the facts in their own way. It's a bit more time consuming, but they've gotten into the habit of going down to the city morgue and counting the corpses. Government attempts to get officials at the morgue to seal their lips have so far been of no avail.

The latest rough count is that around 500 people, most of them young males, have landed up dead by violent means at the morgue this month so far. The number is still climbing and is only taken as a rough indication of what's happening in the darker side of city life.

Some districts of the capital have long been notorious for the murderous tendencies of some of their inhabitants. In Antímano, a poor district of south-east Caracas bedeviled by no-go zones after dark, there were two double homicides last Sunday.

In one case, two young cousins were drinking and chatting with friends in the early hours of the morning.. They should have gone inside: two gunmen turned up on a motorbike and shot one of them stone cold dead without uttering a word. The other cousin tried to run for his life, but the killers gave chase. They shot him first in the leg and then pumped him full of lead as he lay bleeding. The two cousins are said to have had some sort of argument with the killers. Not far away, there'd also been a spat at somebody's birthday party. Two young men left to walk home but were trapped in a narrow stairway and were repeatedly shot. Presumably, the villains were out to make sure.

Outside the capital, an inspector with the state security service, Disip, was no safer when a couple of gunmen on motorbikes went on the armed attack in Carrizal, a town in Miranda state. He and his companion were mown down in a hail of bullets on a street called El Milagro (The Miracle), which didn't seem to work for either of them.

Although the government has refused to provide homicide statistics for 3 years now, murders are running at 130 per 100 000 people in Caracas -- versus 5.7 per 100,000 in the US. The murders are not just confined to Caracas, however. Outside of Caracas, in Carabobo -- a state with 2 million people for example -- around 1634 people had been murdered from January to October. There have been 9 Ministers of Justice in the 10 years that Chavez has been in power.

VENEZUELA: The Cost of the World’s Cheapest Gasoline

The world’s most inexpensive gasoline is sold in Venezuela, through a longstanding subsidy programme that benefits car owners while depriving the oil industry of a large source of funds for reinvesting.

"What’s the problem? I suppose if we produced wheat or tractors they would be very cheap here. If we have oil, then gasoline should be cheap," 38-year-old Alexis Santana, who has been driving a bus since he was 22, told IPS. The argument may seem logical in a country that is one of the world’s biggest oil producers.

For the past 10 years, gasoline has cost between three and four cents of a dollar per litre. Soft drinks cost 20 times more, a bottle of mineral water 25 times more, and an espresso in a local café 30 times more. Customers often leave more in tips to service station attendants than what they actually pay in gas. "Gasoline is practically given away here for free," said Finance Minister Alí Rodríguez, who has done stints as energy minister, secretary-general of the Organisation of Petroleum Exporting Countries (OPEC), and president of the state oil monopoly PDVSA.

"It is obscene to sell our gasoline this way. We might as well give it away!" President Hugo Chávez said in a January 2007 speech, when he ordered studies to be carried out into the possibility of raising domestic gas prices. However, such a move would be almost tantamount to political suicide in Venezuela.

PDVSA and the state heavily subsidise the price, mainly to the benefit of the owners of the four million private vehicles circulating in this country of 27 million. "According to our numbers, Venezuela consumes nearly 750,000 barrels a day of liquid fuels, 70 percent of which is gasoline, and the difference between domestic prices and prices paid in net oil consumer countries will amount to 26 billion dollars this year," economist Asdrúbal Oliveros with Ecoanalítica, an economic consultancy in Caracas, told IPS.

If Venezuela were to sell fuel at cost on the domestic market, the subsidy would still total 17 billion dollars, said the analyst. When the price of Venezuelan oil stood at 116 dollars a barrel in July, former Central Bank chief economist José Guerra estimated the annual subsidy at around 19 billion dollars. But by mid-December, the price of oil had plunged to 31 dollars a barrel.

According to official figures, the vehicles circulating in Venezuela consumed 400,000 barrels a day of gas and diesel, which meant a subsidy -- based on the difference between domestic and export prices -- of 12.5 billion dollars. It costs PDVSA two cents of a dollar to produce one litre of gas, which it sells domestically for three cents. "By giving away more than 3,000 dollars a year away to every car driver, PDVSA has been left without money that could be reinvested with a view to improving the domestic system of fuel distribution, stimulating other sectors, or reducing the company’s debt," Ramón Espinasa, who was PDVSA chief economist from 1992 to 1999, told IPS. And although Venezuela is a major oil exporter, it is facing growing purchases of oil derivatives, including 50,000 barrels a day of gasoline blending components, according to José Suárez Núñez, a veteran journalist who specialises in the oil economy. PDVSA purchased 2.59 billion dollars in oil derivatives in 2006 and 4.03 billion in 2007, according to its reports.

The low price of gasoline "is essentially a regressive subsidy, because most of the fuel is consumed by private vehicles belonging to the middle and upper classes, while the poor use the deficient public transport system," said Espinasa. "Eighty percent of the gasoline is used in private vehicles, which transport just 20 percent of the population, while 80 percent of citizens depend on public transport, which consumes 20 percent of the gasoline. It is a backwards case of Robin Hood," said economist José Luis Cordeiro.

High economic growth rates, low domestic gas prices and government incentives like the Family Vehicle Programme, which exempts certain cars from the value added tax, have fueled a buying spree of cars, with new records set each year since 2004, until reaching a total of 400,000 new cars sold in 2007. However, restrictions on imports reduced sales to 252,000 cars between January and November 2008, according to the Venezuelan automotive industry chamber.

"Small service stations, on the other hand, are hurt because with these prices, the cash flow is small and it’s not worth investing in installations, we cannot seek large loans, and our employees are poorly paid," José Costa, the manager of a gas station in Caracas, commented to IPS.

Through its broad range of social programmes, the Venezuelan government has made public spending not only the engine of economic activity but of improved living standards as well, based on soaring oil prices. For that reason, it must feel the burden of the heavy subsidy for domestic gas prices, said Oliveros.

In the 1990s, a World Bank study on subsidies in Latin America showed that with the four billion dollars that the Venezuelan state shelled out to gasoline consumers, "41,000 primary schools or 7,000 secondary schools a year could be built," said Cordeiro.

PDVSA contributed nearly 14 billion dollars to the government’s social programmes in 2007, according to the company’s annual report. The social programmes, or "missions", include literacy training, primary health care provided by Cuban doctors in the slums, food for the poor at subsidised prices, soup kitchens for low-income women and children, free eye operations, dental care, microbusiness loans, support for cooperatives, scholarships at all educational levels, and stipends for the unemployed who agree to take training courses.

According to the National Statistics Institute (INE), the poverty rate was reduced from 43.9 percent in 1998 -- when Chávez was first elected -- to 28.5 percent in 2007. And the Planning Ministry reports that the proportion of households under the poverty line has now shrunk to 23.4 percent, while the proportion of households in extreme poverty has dropped to nine percent. But with the price of Venezuelan oil plunging to one-quarter of its high of over 120 dollars a barrel, the country will be hit hard by the current global crisis.

"The fiscal situation could become so critical that the government will turn to measures like devaluation, hiking taxes or increasing the price of gasoline. But what it is not likely to do is cut spending," said economist Emeterio Gómez.

Subsidies, whether direct or indirect, usually translate into a comparative advantage that boosts the industry’s competitiveness. "But that is not the case in Venezuela, because the advantage of cheap gasoline is cancelled out by price controls on other products, exchange controls, traffic jams and the poor state of the roads," said Oliveros. Because of the lack of road transport corridors, a truck hauling merchandise from the Colombian border in the west to industrial or consumption centres in eastern Venezuela must drive through Caracas and other large cities.

The low gas prices also stimulate contraband with Venezuela’s neighbours -- Colombia, Brazil, and to a lesser extent, Guyana -- estimated at 25,000 barrels of fuel a day by the Energy Ministry, which at an average price of 90 dollars a barrel in 2008 would represent 800 million dollars a year.

Investigative reports by the local press estimated that some 80,000 families in northeastern Colombia depend on smuggling of fuel for all or part of their income. The fuel is carried across the border in plastic containers and jugs on bicycle or by foot, or in trucks that form part of large-scale smuggling rings.

"The problem is the difference in prices, because fuel in Venezuela is 20 times cheaper (than in Colombia), and if this problem is not resolved, it will be impossible to combat smuggling," said Lino Iacampo, president of the association of gasoline distributors in the border state of Táchira. "And people in Táchira are often angry because they can’t find gas, or because it is rationed out," he added.

In the United States, young people become independent when they move into their own place; in Venezuela, middle-class youngsters become independent when they get their own car, says Oliveros. The cult of owning one’s own car has become so entrenched that municipal authorities in Caracas are requiring that in certain lanes during rush hour, each vehicle must carry at least one other person besides the driver. During rush hour traffic jams, cars carrying an average of 1.2 people move at an average speed of five kilometres an hour. But as Oliveros and other analysts point out, the lack of safety on buses, where there has been a rash of armed robberies, and in taxis has led people to desperately seek to purchase a car of their own.

Nearly all major arteries in Caracas are packed from dawn till late at night. Aliana Giménez, who lives in the commuter city of Guatire, east of the capital, told IPS that "my life has been reduced to sleeping on the bus, working, getting home, showering and changing my clothes, taking what amounts to a little nap at night, and setting out for Caracas again before the sun comes up."

Economists say the first step towards a solution could be gradually increasing gasoline prices to the halfway point between the domestic and export prices. "But that measure would only work if economic policies are modified to keep inflation down; otherwise it would cause more problems," said Oliveros.

Venezuela has the highest inflation rate in the hemisphere: around 35 percent a year, and over 50 percent for foodstuffs, which in this country are transported mainly by road. But in the past, gasoline price hikes have sparked severe social protests, the worst of which was the 1989 "Caracazo", in which hundreds of people were killed in the brutal crackdown by security forces. In Venezuela, such a move could be extremely costly in terms of votes and support.

And Chávez -- who has not touched the price of gasoline since he took office in 1999, and who has held elections of some kind nearly every year -- may be planning an early 2009 referendum to seek a constitutional amendment that would make it possible for a president to run for indefinite reelection.

So where does Agapov's Rusoro leave Gold Reserve's Belanger? Other than up a convenient creek without a paddle!

VHeadline editor & publisher Roy S. Carson writes: According to a December 24 press release from Spokane (USA-Washington State)-based Gold Reserve, GRZ directors have amended a shareholder rights plan without obtaining shareholder approval.

Whether or not this is a legitimate move or just another attempt by GRZ president Doug Bellanger to fend off the inevitable remains to be seen, but from this reporter's point of view it's a desperate attempt to clutch at straws in the knowledge that Gold Reserve's future in Venezuela is somewhat less than zero!

According to the Gold Reserve PR ... which we have traditionally treated with suspicion even at the best of times ... Belanger is playing semantics in the hope that he can extend a definition of 'Permitted Bid' to exclude "a bid from an entity which has confidential information about Gold Reserve that hasn't executed a confidentiality and standstill agreement within three months prior to the commencement of that bid."

Excuse me! But doesn't that just about imply that the World and his/her uncle is excluded by deft management of verbage?

In Guasipati -- a bus timetable gives the distances to El Callao, Tureremo, El Dorado and Km 88

As prime bidder, Russia's Agapov Group's Rusoro Mining CEO Andre Agapov has just highlighted in a response PR, "Rusoro does not, and at the time of the Bid did not, have confidential information about Gold Reserve!"

So where does that leave Belanger, other than up a convenient creek without a paddle?

Agapov somewhat succinctly put it as appearing to be "another drastic attempt by entrenched management at GRZ to prevent Gold Reserve's own shareholders from deciding to tender to the Bid!" He adds "We are disappointed at these tactics ... but we are determined to ensure that Gold Reserve shareholders are not disenfranchised."

Agapov further points out that: "as of December 12 (the last trading day before the Bid was announced), the Bid represented a value of Canadian $1.08 per GRZ share equaling a premium of 140% on closing prices and 209% on the 30-day volume weighted average prices, using Rusoro's and GRZ's share prices for the relevant trading days on the TSX Venture Exchange and the Toronto Stock Exchange respectively."

Subsequently, "to allow GRZ shareholders to consider the Bid on its merits, Rusoro intends to seek an order cease trading the rights under the GRZ Plan prior to the expiry of the Bid which is set to expire at midnight on January 21, and that Gold Reserve shareholders are free to tender their shares at any time prior to that date!"
The brouhaha comes on the realization that Gold Reserve's tenure in Venezuela has little or no prospect, firstly because although they claim a concession to Las Brisas del Cuyuni it is patently obvious that all they hold onto is a section of turf under which the Venezuelan State (a.k.a. the Venezuelan people) hold sovereign right to all and any gold resources. Belanger has been insisting that his company actually owns everything all the way down to Australia and back, but he's already been set straight on this by Venezuela's President Hugo Chavez Frias who, rightly, has insisted that no foreigner may be allowed to dictate over Venezuela's sovereign resources. QED!

That, however, hasn't stopped Belanger from making spurious claims of total ownership over a spate of years ... which is perhaps why, when we first queried the legalities of his fondly-held concept some 12 years ago, we were treated to a foul-mouthed telephonic lecture on journalistic principles i.e. that we should unquestioningly re-reprint GRZ' wilder PR claims as FACT even when we knew them to be untrue! NO WAY!

So why should Gold Reserve shareholders trust Belanger now, any more than they should have distrusted him more than a decade ago?

From a highly-personalized and an obviously personally-partisan point of view, with loyalties to Venezuela and the Venezuelans most affected by Belanger's cowboy transnational traits, I can quite simply find NO REASON why anyone should trust Belanger further than they would be willing to throw him ... even from a very long barge-pole's perspective at the best of times!

Thoroughout my recent visit to the gold fields of southern Bolivar State, I was constantly reminded of the contempt with which Gold Reserve is held by local miners and indian tribes alike. Arawak chief Daniel Gomez' description of the gringos as "cowboys" certainly holds sway as far as Belanger's mob is concerned, despite the plethora of wayside hoardings proclaiming this-and-that of supposedly charitable initiatives to persuade the Basic Industries & Mining (Mibam) Ministry that they (Gold Reserve's management) are the "good guys" and the indians are, just that! WRONG!

Roadside hoardings are to be found everywhere -- this one proclaiming
"with CVG-Minerven the gold is Venezuela today!"

Small wonder then that people living in southern Bolivar State are looking with expectancy towards a 2009 dominated in the region by the socialist 50/50 joint venture system initiated by the Russians.

Despite Cold War paranoia of gringos in the field, the Russians have made tremendous inroads with the Venezuelan government to the extent that they concur on the absolute necessity of dual responsibility for corporate management and investment in Venezuela's gold mining industry. In that respect, Gold Reserve's shareholders are on a Win-Win streak if they accept Rusoro's offer ... even if greedy Doug Belanger sees otherwise. It's not surprising though since Venezuela's and Venezuelans' concerns were never uppermost in his mind!

The situation with regard to Las Cristinas and Crystallex, however, remains open though still unclear. Concerns raised by various government officials and sector analysts in Venezuela have, however, indicated that the status quo cannot remain paralyzed for much longer. The Venezuelan government is keen to get its gold industry up and running efficiently as soon as possible and President Hugo Chavez Frias has set his heart on a doubling of production in 2009. Time and opportunity has run out already for Gold Reserve's Belanger although his shareholders can profit from his personal demise. Crystallex' negotiations with the government are, however, not yet concluded and it's firmly in their (Crystallex') home field which way they wish to come out to bat in 2009.

  • If they choose to follow Belanger's perennial obfuscation, however, they'll find themselves quickly at a disadvantage...

Crystallex' situation is that of a contractor employed to mine gold under a long-standing contract -- which is well and good! But the Venezuelan government is the owner of the property and holds the keys to the ignition inasmuch as even if the EIS permit has already been signed, sealed and delivered to the Venezuelan Guayana Corporation (CVG), it is up to the management of the state-owned heavy industry conglomerate to decide IF or WHEN they're going to hand over the final paperwork ... if at all!

The massive Rio Cuyuni wends its way through the jungles of Venezuela's
southern Bolivar State over the border into the Essequibo territory of neighboring Guyana

Maniac investors on Internet chat forums can shout and scream all the abuse they like, but it's Venezuela's sovereign right to decide what happens to its own sovereign precious metal reserves and no amount of stomping of arrogant gringo feet is going to change things.

Wilder speculation of Crystallex dragging Venezuela, the CVG and/or Mibam through international courts is pure fantasy since the contract stipulates that any legal twist must necessarily and exclusively be decided under Venezuelan jurisdiction, which again is Venezuela's sovereign right. So, either Crystallex confirms to the Venezuelan government's expectations for the future or, hey ... there's the exit door!

Illegal garimpieros have stripped huge chunks of virgin jungle to get at the gold

Illegal garimpieros/miners leave a trail of destruction behind them

Illegal garimpieros/miners work under extremely primitive and dangerous conditions

Most assuredly, Crystallex is in an infinitely better position than Gold Reserve as the end-game is enacted! The model of socialist 50/50 joint venture with the Venezuelan government, of course, scares the pants of uninformed and sadly disinformed Crystallex shareholders but, seen against the current situation where they OWN nothing (the Venezuelan State owns it all!), regaining 50% of the legal claim of ownership, that then-CEO Marc J. Oppenheimer signed away in 2004 as part of the operator contract, is surely a sweetener to the whole?

Such a deal is on the cards although this reporter is absolutely sure that a final agreement, releasing a flood of paperwork, will include a management cull that Toronto may find distasteful but may reluctantly be forced to accept.

Certainly, in an interview with Rusoro Mining's CEO Andre Agapov a month ago, the interest was initially focused on the then-upcoming announcement of a buy-out offer for Las Brisas del Cuyuni and Gold Reserve. Agapov scarcely shielded his (and the Venezuelan government's) desire for a Kilometer 88 encompassing deal including Las Cristinas, but the prospect was distinctly held to be in the future after all the complex legalities of the situation had been sorted out.

Which leaves us where, exactly?

  1. Crystallex can continue to negotiate with MinAmb, Mibam and whomsoever they please until the cows come home; or
  2. Crystallex can begin fresh negotiations with the Venezuelan government towards a direct socialist 50/50 joint venture in which the Venezuelan government will have a decisive say on management and implementation; or
  3. Crystallex can sit on its duff and wait for Agapov (or whatever other entity!) to make a buy-out bid for its shares at some juncture int he not too distant future before it runs out of available cash (the company says by Q3 2009) ... and then what?

All three scenarios have different outcomes:

  1. ZILCH!
  2. possibly more profitable to investors than the 3rd alternative but combined with a perhaps unsurmountable executive loss of face!
  3. a lengthier alternative depending on whether or not Crystallex itself is weakened in the game of derring-do!

Frankly, I wouldn't want to be faced with executive decisions in such a dilemma! Which is probably why those execs get paid obscene salaries and why I can, personally, thank God that I'm only a reporter who finds it quite incredible the lengths to which some people are still prepared to go in their lust for gold...

Roy S. Carson


Venezuela is facing the most difficult period of its history with honest reporters crippled by sectarianism on top of rampant corruption within the administration and beyond, aided and abetted by criminal forces in the US and Spanish governments which cannot accept the sovereignty of the Venezuelan people to decide over their own future.


2008, the great CONs, blowing bubbles, the illusion(s) of wealth, three more zeros, and politics

VHeadline commentarist and money market expert Fred Cederholm writes:
I've been thinking about 2008, the great CONs, blowing bubbles, the illusion(s) of wealth, three more zeros, and politics. Calendar 2008 is just about over. I'm not sorry to see it go. Many of the underlying economic/financial negatives and the spun non-truth(ful) positives I've been warning about unraveled to where they can no longer be ignored -- or denied.

A string of crises forced the hands of those in charge both domestically and globally. It is now obvious that we were fed a bill of goods and a toxic stew mix of bad policies and investments. Illusory paper profits are gone as is the false sense of well being ... the party is over and the tab must now be paid.

You see since WWII the normal modus operandi to fix any economic bubble passing its gas and leading into an economic downturn (recession) was to cut interest rates and increase the money supply. The American consumer was thus fired up to… consume. The scam was to induce UBER-consumption. Spending was "the fix" and if consumers didn't have the money, they could borrow it at cheap rates and have all the stuff they wanted -- now!
The difference was that during the 1950s, 60s, and 70s much of what the public was urged to consume was still made here by American workers earning a living wage with benefits - including a "defined benefit" retirement plan.
Any retrenchment from a boomlet, boom, or bubble was seen as anathema. Why endure the normal, longer, and more painful corrective process from the last over-stimulation if you can move on to the next boomlet, boom, or bubble with induced spending fed by a debt driven public or a debt driven Uncle $ugar? The 80s told US/us "Greed is good" and "that deficits (debt) don't matter." Big mistakes!

The 1980s, 90s, and 0Xs saw a continuation in the cult of the fix a bubble bust with a newer bigger bubble -- but here there was a twist! Inflation was taking an annual bite out of the buck, yet wages "seemed" to be increasing. More cash flowed thru the fingers even though it bought less. Supplemental "income" from borrowings (at the household AND government levels) fostered the illusion that we were no worse off. The "on-paper" appreciation of any so-called marketable values of stocks, investments, and real property gave a false sense of well being and also gave the illusion of an easy out.

If push came to shove, "assets" could be sold at the inflated values and the fixed debts could be paid off with the proceeds. This fix would work, if and only if, somebody new (most likely with more borrowed money) came along and paid the higher price. It also required that a finite group took their money and ran at any given point in time. Households and government were running their own Ponzis!

Meanwhile the nation as a whole continued moving from an economy which actually made things to a nation who traded, swapped, and leveraged -- making their primary (un)real gains on paper appreciation alone. Tangibles behind US Gross Domestic Product (GDP) continued morphing from agricultural goods to manufactured products to services to the virtual paper values added by a new economy.

GLOBAL took on a double significance in that we as a nation depended more and more on entities outside our borders for supplying the goods and energy we consumed. We also depended on these overseas $ugar daddies to underwrite this ballooning debt financed consumption of their products.

This new-bubble-for-old-bubble fix it methodology "worked" for almost 60 years. Every twenty years, the fix it model from the US Treasury and the FED added three more zeros to the fix-mix. MILLIONS became BILLIONS; which now became TRILLIONS!

Unraveling actually began in 2007 (in some respects 2006). 2008 was an election year so denial and a political song and dance attempted to keep the writing on the wall obscured thru November. The DC politicos and the Wall Street moguls almost pulled it off!

This week you got background for the debacle that was 2008. Next week you get the appalling numbers...

Fred Cederholm

Kenneth T. Tellis: What has Hugo Chavez got to do with Newfoundland & Labrador Premier Danny Williams?

VHeadline commentarist Kenneth T. Tellis writes:
The on-going problem between Newfoundland & Labrador premier Danny Williams and Abitibi Bowater has now brought the name of Hugo Chavez into the issue.

During a discussion on BNN (Business News Network) on the issue of the on-going issue of Danny Williams taking back water and land rights that were part of an agreement between Newfoundland and Abitibi Bowater over a 100 years ago ... now that Abitibi Bowater is closing down its paper plant, Newfoundland wants those rights back as the company will no longer be operating the plant.

The company sees this move by Danny Williams as something similar to the way Hugo Chavez nationalized the Venezuelan oilfields.

While the discussion was going on the party that supported Abitibi Bowater kept referring to Danny Williams as Chavez, when there is absolutely no link between the two at all.
Of course, this is very typical of US Corporations ... they keep mixing one issue with the other to roil the waters and make people think of someone in a negative way. But that might come to haunt Abitibi Bowater some time in the future.
Still, to have to name Hugo Chavez in this problem, shows that the US Corporations are now clutching at straws, and cannot handle the issue.

Kenneth T. Tellis

Chavez: I'm not after dictatorship

Venezuelan President Hugo Chavez said Sunday that his re-election was ultimately down to the Venezuelan people and their vote. "They say my personal goal is to perpetuate myself in power; nothing could be further from the truth," Chavez told a group of military garrison chiefs, AFP said.

"What we have here is a national independence project that still needs more work to consolidate. It's not consolidated yet," he said in Maracay, 80 km (50 miles) west of Caracas.

Chavez, denying accusations that he is seeking dictatorship in the Latin American country, said that a despotic ruler would never seek the public vote before making decisions. "When does a tyrant appeal to the people? When does a tyrant consult the people?" said Chavez. "Nothing can be more legitimate and right than calling on the people ... what the people decide will be carried out. It's the will of the people that will be imposed for certain."

The Venezuelan leader and his supporters are attempting to convince the people that the government's socialist agenda is in their best interest and can be fully carried out, should Chavez remain in power.

Opposition parties have set up a pressure group to reject the measure, calling their movement 'Angostura', warning of the dangers of unlimited political power. The group is named after a speech by Venezuelan founding father Simon Bolivar. The Venezuelan president narrowly lost a similar referendum last year.

Venezuela Late Reimbursing Banks for Currency, Nacional Says

Venezuela’s foreign currency exchange agency, known by its acronym Cadivi, is months late reimbursing local banks and international credit card companies, El Nacional said, citing people in the industry it didn’t name. Visa Inc., MasterCard Inc., American Express Co. and Discover Financial Services are among those that haven’t received their dollars, the Caracas newspaper reported. Cadivi sells dollars at the official exchange rate of 2.15 bolivars per dollar. The accounts used to make these payments are exhausted or overdrawn, the newspaper said. Cadivi’s nonpayment has caused some Venezuelans traveling abroad to have their cards rejected, according to El Nacional.

Rusoro Mining Ltd.: Entrenched Gold Reserve Management Continues to Attempt to Disenfranchise Its Own Shareholders


Rusoro Mining Ltd. has learned by way of Gold Reserve Inc. press release issued on or after 4:00 pm Eastern time on December 24, 2008, that the board of directors of Gold Reserve has amended its shareholder rights plan without obtaining GRZ shareholder approval.

The amendments to the GRZ Plan include extending the definition of a "Permitted Bid" under the GRZ Plan to exclude a bid from an entity which has confidential information about Gold Reserve that hasn't executed a confidentiality and standstill agreement within three months prior to the commencement of that bid. These highly unusual amendments do not have any impact on Rusoro's previously announced bid to acquire certain securities of Gold Reserve (the "Bid") as Rusoro does not, and at the time of the Bid did not, have confidential information about Gold Reserve.

Andre Agapov, CEO of Rusoro stated, "Although the Bid is not affected by these amendments, this appears to be another drastic attempt by entrenched management of GRZ to prevent Gold Reserve shareholders from deciding to tender to the Bid. We are disappointed at these tactics but we are determined to ensure that Gold Reserve shareholders are not disenfranchised."

As of December 12, 2008 (the last trading day before the Bid was announced), the Bid represented a value of C$1.08 per Gold Reserve share, a premium of 140% on the closing prices and 209% on the 30-day volume weighted average prices, using Rusoro's and GRZ's share prices for the relevant trading days on the TSX Venture Exchange and the Toronto Stock Exchange respectively.

In order to allow Gold Reserve shareholders to consider the Bid on its merits, Rusoro intends to seek an order cease trading the rights under the GRZ Plan prior to the expiry of the Bid. The Bid is set to expire at midnight at the end of January 21, 2009. Gold Reserve shareholders are free to tender their shares to the Bid at any time prior to such time.

Rusoro's financial advisor is Endeavour Financial International Corporation, its Canadian legal counsel are Blake, Cassels & Graydon LLP and Anfield, Sujir, Kennedy & Durno and its US legal counsel are Gersten Savage LLP and Dorsey & Whitney LLP.


Andre Agapov, Chief Executive Officer

Sunday, December 28, 2008

At $395 plus a night, one night's sojourn was all this reporter was prepared spend at Caracas Tamanaco Hell...

VHeadline editor & publisher Roy S. Carson writes: John Cleese's long-lost sister is alive and working as a hotel manageress in Caracas ... if she isn't then she must be a clone for I'm about to re-name the once-proud La Floresta Hotel in Caracas as the Venezuelan version of Fawlty Towers!

In a recent review by TripAdvisor.com a disgruntled La Floresta ex-guest complained: "Desk staff are unfriendly ...perhaps cos I'm a gringo? Room was cramped, scruffy & in need of serious refurbishment ... they tried to charge me for a coffee 10 mins after the end of the official breakfast time, despite not having a full breakfast on any of my 5 days stay ... noisy location, even from the 8th floor ... they tried to charge me an extra night, despite having receipts for the nights I paid ... I have now stayed in 4 hotels and none are value for money unless you bring US$ and exchange on the black market."

Even Lonely Planet has had to concede that "Service isn't a strong point here ... there are no public phones on the premises and the staff, though friendly enough, seem reluctant to answer questions." The diminutive manageress doubles as Fawlty Towers' Manuel when she goes into verbal lock-down over complaints that the establishment's much-heralded 'Internet connection in every room' is yet another absentee from the $150-a-night service manual. The porter eventually admitted that there are daily complaints from guests about the lack of in-room internet connections and, apart from a single wired computer laboring on Windows 97 in the noisy back lobby, the only suggestion is to steal an unsecured connection from PDVSA La Estancia in the park half-way across to the infamous Tourism Ministry at the back!

Quite frankly, La Floresta ex-guest's experience is NOT unusual ... hotels in Caracas are indeed a rip-off at both ends of the scale ... and while some twenty long years ago, Venezuela was strutting its stuff to the tourism world as "The best-kept Secret of the Caribbean", it's perhaps just as well that it remains under wraps!

While the former US Embassy building in La Floresta has been taken over by the Ministry responsible (?) for Tourism, there seems little attention given to tourism per se, apart from a few of the pricier luxury hotels like the Marriot and the Melia Caracas while the former Caracas Hilton (now the Hotel Alba) has really gone to the dogs.
The Caracas Hilton/Alba used to be one of the finest 4-star hotels in Caracas, facing east to the Teresa Carreno cultural complex (opera, theater, orchestra, ballet, cinema, coffee shop, restaurant, art gallery and bookstores) but the area has been taken over by buhoneros and is horrible, smells even worse and if filthy and very dangerous. Efforts have been made, but obviously failed by the local municipality administration ... and to think they were actually going to open a new Sambil Shopping Mall in La Candelaria, not a stone's throw away! President Hugo Chavez Frias' recent announcement that he wants to turn the latter mega-construction, in one of the most congested sections of downtown, into a much-needed public hospital makes much more sense!

What used to be one of Caracas' finest hotels, the Tamanaco, is no longer the star-studded experience it used to be ... NOT any more! Like the La Floresta (and many other establishments that make the boast!) they claim to have "high speed internet" in every room ... WRONG! ... but even where a connection may be established, the most one can coax out of thin air is a miserable 54k and not even a hint of an apology for the false advertising, never mind a reduction on the grossly exaggerated billing.

I wholeheartedly agree (from personal experience) with a Wcities.net reviewer who said "Dont get close! I can not describe how awful this hotel is especially for the price you pay. They charge for everything including drinking water! The rooms are very cold and stinky ... the elevator is so slow that I end up going up and down to my room at level 9 using the stairs ... and the staff are not friendly and not organized."

Another disgruntled Tamanaco ex-guest says: "The room is dark, dingy, and in total need of remodeling. A hamburger in the restaurant costs over $35. A pack of gum in the gift shop, $8. Robbery at its finest. The pool is very nice. Overall, this is the worst 5-star property I've ever stayed at, hands down."

At $395 a night plus all the add-ons they could imagine including an extra charge for a miserable buffet breakfast, one night's sojourn was all this reporter was prepared spend at Tamanaco Hell...

Roy S. Carson

PS: By comparison, an overnighter at a hotel close to Charles de Gaulle international airport in Paris -- with in-room internet connection and breakfast plus 20-minute shuttle service to CdeG included -- cost just Euros 63 (including VAT) = $90! And, importantly, the hotel staff were good natured, helpful and courteous -- what a contrast to 'best kept a secret' Caracas!


Venezuela is facing the most difficult period of its history with honest reporters crippled by sectarianism on top of rampant corruption within the administration and beyond, aided and abetted by criminal forces in the US and Spanish governments which cannot accept the sovereignty of the Venezuelan people to decide over their own future.


Chris Herz: Bombing designed as another surgical strike ... how about a Gaza-type siege of Caracas?

VHeadline's Washington DC-based commentarist Chris Herz writes:
The carefully controlled imperial press and TV here in the USA are explaining the Israel/US attack on Gaza as an entirely justified bombing designed as another surgical strike to root out the rocket-firing HAMAS terrorists. Of course nothing could be further from the truth.

Gaza City is one of the most heavily and densely populated places on the planet. It is not possible to fire airborne rockets and missiles and bombs into this city from US-supplied aircraft moving at 1,000 kmph without causing extensive civil casualties: Apparently some two hundred thus far in just the first few hours of the bombing.
As to the excuse ... the launching of home-built crude rockets into Israeli
territory from within Gaza, this comes after literally months of siege inflicted
on the city whilst a truce was in effect assuring not one of these simple
rockets would fly.
Apparently not even most shipments of food by the United Nations have been allowed entry by the Israelis, who totally control all ingress to the besieged city. Obviously, the Gazans are desperate and hope their almost harmless gesture of defiance can somehow cause the world to focus on the starvation of an entire city -- the worst such since the Nazi siege of Leningrad in World War II.
  • I think the whole world needs to look at this horrible business and study on just how long they are to support the USA and her imperial junior partner.
I have heard many times from our European friends especially, how some political and even military support for the USA from her transatlantic allies is due -- at least as payback for the liberation of Europe in World War II. And, of course, many in Europe feel great moral burdens due to Hitler's anti-Jewish holocaust -- enthusiastically supported by many from France to Ukraine.

But, I cannot count the times I have heard from good US conservatives over the years that they think we fought on the wrong side in that great war ... that Communism was always the much greater threat to the USA than ever was Hitler. This is also not something the commercial media cares to point out to people beyond our borders. And of course, whether it is Social Security, the right to form independent labor unions, or the rights of minorities to legal parity with whites, the whole of the tradition of Rooseveltian liberalism has been explicitly and totally rejected for the last 40 years by all US regimes, including the new, incoming Barack Obama government.

Obama calls for expansion of the US war in Afghanistan, maintenance of the war effort in Iraq, expansion of the US military by perhaps as many as 92,000 ground troops.
Complicit in the fact that these facts are not widely known in the USA are the corporate media. And this is no accident. Already it is clear that Social Security and such pitiful public medical aid is available here will be vastly scaled back or curtailed in coming months.
The Obama government has, even before it takes power, been compelled to share intelligence and war departments with its conservative supposed rivals. What we have here is government designed for failure, for inability to launch policies in new directions. Chairwarmers for a new conservative government, perhaps headed by Sarah Palin or Jeb Bush in 2012.

Those nations and peoples beyond our frontiers who have not found it easy to live with the policies of George W. Bush, owe it to themselves to do everything they can to accelerate and exacerbate the plunge of the US economy.

Only once we can not any longer field navies and armies across the world, only this can prevent the outbreak of another World War.

How about a Gaza-type siege of Caracas?

From the imperial capital

Chris Herz

Dr. Franz J.T. Lee: If the Arabs would have stayed longer in Spain, we would shout today: 'Uh, Ah, God is Great!'

VHeadline commentarist, University of Los Andes political sciences professor, Dr. Franz J. T. Lee writes: It is the Christmas Season! ... this is what our colonial masters have taught us across half a millennium.

We criticize everything about them, their horror and terror ... but, "you communist, atheist and Marxist, please, do not touch, do not mess around with MY religion, my Christianity, my Christmas!"

Especially in the South, in Venezuela, and elsewhere on the American continent ... in politics, in real life, religious critique still is taboo. Why?

Individually, by playing around with our innocent emotions and minds and by manipulating our fear of physical death, our colonial missionaries and overlords did a fine, everlasting, formal logical job. They created the best weapon of intellectual mass destruction and loaded it with fraudulent democratic ballots and radio-active bullets of mass consumption, with white angelic and red bloody capitalist Christmas gifts. Hence, the global mental holocaust, for which there is no redemption or reparation, is becoming perfect, is globalized. Internationally, in sophisticated technological forms, like Scientology, modern religion and fascist ideology more and more form the front lines of the global 'war of ideas', of 'full spectrum dominance' of corporate Dark Age obscurantism. In this field there is currently raging a full force attack on Venezuela.

It even tries to swallow the Bolivarian Revolution in Venezuela, even to devour Marxism, that is, scientific, philosophic, sapient socialism on a global scale. Currently we have a boom of all kinds of inventions of the meanings of our revolution and socialism sui generis.

Uncle Sam, Father Coca Cola and Murdoch are working over time.

Jingle bells, jungle bells, yes: Joy to the World, our Saviors are born ... for the 2008th time ... and yet we, and our planet, are more god-forlorn than ever before.
* Was Epicurus right? Do the gods really live in the lagoons of our minds? Have they only created the world and then went on eternal holiday and forgot all about the poor, and their aristocratic kingdom in heaven?

* Did Aristotle rightly protest that after creating nous, god, Anaxagoras simply forgot all about him? Essentially he never used it in his philosophy? He told the Greek Olympic lords that Selena, the Moon, was no goddess but simply a rock, for that he was accused of blasphemy of the gods and was ostracized from Athens.

* Why did the French natural scientist Pierre Laplace tell Napoleon Bonaparte that as scientist he does not need the hypothesis 'god'?

* What does the video film 'Zeitgeist' tell us about the greatest ruling class hoax of all times? When are we going to free ourselves from the chains of religious illusions, of divine alienation?

* When will the real, true socialist world revolution begin?
Christmas is not just a holiday; it is a holy day, it is not part of a personal or individual religion. It is a social reality, an intrinsic part of mind and thought control, of a carefully stoked colonial and imperialist mental holocaust. It is an intellectual weapon of mass destruction of scientific and philosophic reason. Next to ideology, patriarchal, monotheist religion is the guardian of the earthly paradise of capitalist parasites, it forms part of the process of exploitative production, of the accumulation of capital, of official, universal history, of his story. Historically we know that religion was burning women at the stake, declared wars, even supported German Nazism. Also, religion is religion, like there is no good capitalism, also there is no good religion. All capitalism, all religion are 'good', because they are the goods, the goodies of the respective ruling conquering classes.

If the Arabs would have stayed longer in Spain, all of us would shout today: 'Uh, Ah, God is Great!'
  • Of course, we would not celebrate Christmas, but would be on our way to Mecca.
Beyond any doubt, on the globe, there are wonderful and nice religious and Christian peoples, who do not know the horrendous dimensions of manipulation and indoctrination. Unknowingly and innocently they are being used and abused for inhumane purposes. This comment is dedicated to them, to encourage them to study their historic reality a bit more profoundly.

Today, in reality, billions have no reason whatsoever for celebration. Rather, we have to launch the Marxist critique of ruling class religion, of the sigh of the oppressed creature, of the soul of soulless conditions, of the heart of a heartless world and of the mental strychnine of the majority of mankind.

The very bourgeoisie in its merciless class battle against the feudal God, replaced him with Reason, separated State and Religion.

Hence, the socialist revolution begins with the social critique of religion, otherwise the socialist revolution against capitalism cannot commence. It gets stuck in liberation theology, in the theology of revolution.

President Hugo Chavez Frias of Venezuela said it in a speech to the nation ... he thinks that no heaven exists above, otherwise the astronauts would have sighted it; no hell exists below, otherwise the oil company of Venezuela, PDVSA, would have discovered it under the earth.

Franz J. T. Lee

Odeen Ishmael: UNASUR faces disagreement over leadership

VHeadline commentarist, Guyana's Ambassador to Venezuela, Dr. Odeen Ishmael writes: On December 16, an extraordinary summit of the Union of South American Nations (UNASUR) held on the sidelines of the Latin American and Caribbean economic forum (at Sauipe Coast, Brazil), formally approved the creation of the South American councils of Defense and Health. As subsidiary bodies of UNASUR, these two councils will be formed by ministerial representatives from the twelve member states.

The South American Defense Council was proposed by Brazil earlier this year to coordinate defence mechanisms in South America. The council, which will hold its first meeting in January 2009, aims to have a common vision of the region's defense based on mutual trust with emphasis on cooperation, training and equipment issues. It will also examine common threats and act as a forum for defusing potential conflicts in the region. In May, Colombia had expressed reservations, and its non-participation due to "the terrorist threat" it was facing at home. But according to Chilean President Michelle Bachelet, UNASUR�s pro-tempore chair, the proposal for the formal establishment of the Defense Council was approved unanimously by all the presidents.

The South American Council of Health was first proposed by Chile in early December at a meeting of UNASUR delegates in Rio de Janeiro. Its overall aim is to promote common sanitary policies for all the countries of South America. But the main purpose of the extraordinary summit was to elect a secretary general to manage the day-to-day activities of the continental organization.

On the eve of an earlier special summit in Brasilia, on May 23, ex-Ecuadorian president Rodrigo Borja, the appointed secretary-general who was holding the position until his expected formal election, resigned, allegedly because the constituent treaty of the organization did not provide the post with as much autonomy and power as he wanted.
Since then, the search for a viable candidate for the position was pursued and the name of Pablo Solon, the well-known Bolivian ambassador for trade affairs and integration, emerged. But after he failed to win the support of all the member states, Ecuador nominated Argentina's former president Nestor Kirchner for the post.
However, when it was felt that Kirchner was a unanimous choice, Uruguay in late October expressed its opposition to his candidacy mainly because of Argentina's opposition to Uruguay�s construction of a cellulose pulp mill in on the bank of the Uruguay River, their common boundary. Uruguay is also annoyed over Argentina's reluctance to dredge access channels of the Rio de la Plata and objects to the presence of Argentine protesters (against the pulp mill) blocking the bridges that connect the two countries..

Argentina's Foreign Minister Jorge Taiana has since described Uruguay's opposition to Kirchner as an "insult to Argentines, to UNASUR and to the countries that support his candidacy."

At the extraordinary summit, Uruguay's President Tabare Ramon Vazquez reiterated his country's opposition to Kirchner. As a result, the twelve member countries could not reach a consensus and the election was postponed. Apparently, much time was spent on discussing the nomination and election mechanism for which Kirchner has majority support.

Argentina and Uruguay did not participate much in the debate, but the Uruguayan president hinted that his country could quit the organization if there was a departure from the consensus position for the choice of the secretary general. Some reports emanating from the summit indicated that this response from Uruguay came after Argentina and Ecuador suggested a change to majority choice instead of the consensus rule on election to leadership posts. In the end, the leaders agreed to conduct further consultations in order to finalize the election by April 30 next year, when Chile�s term as pro-tempore chair concludes.

It was also clear that the leaders re-confirmed that UNASUR should not depart from its consensus policy. This was emphasized by Bachelet, who told the media, at the end of the meeting, that all the presidents "want to have a permanent secretary general on broad consensus among all countries." She acknowledged that there was a discussion at the meeting about the scope of "consensus" and conceded that some countries "are in a hurry because they feel it is very important to have a permanent secretary general immediately."

While the election issue was paramount, there were also other matters that engaged the leaders' attention. They discussed "procedures and concepts" of UNASUR and also "deadlines" to ratify the treaty establishing the organization. They set the end of April 2009 as the deadline for all member countries to ratify the constituent treaty singed on May 23 last. Until now, only Bolivia and Venezuela have ratified the treaty; the remaining 10 countries -- Argentina, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Surinam and Uruguay -- still have to do so.
In addition, the leaders praised the impartial work of UNASUR's commission that investigated the massacre that occurred in the Bolivian province of Pando where approximately twenty persons were murdered during protests against the Evo Morales' administration in early September. They also expressed their support for Bolivia's democracy as well as for Colombia's fight against the FARC and other illegal armed groups.

Certainly, over the next four months as the member states attempt to resolve the administration issue within the alliance, they will be provided the opportunity to develop lasting guidelines in dealing with crucial issues which may prop up from time to time.

The acrid relations between Uruguay and Argentina resulting in the postponement of the secretary general's election have certainly slowed UNASUR�s momentum, but if there is a quick consensus in the acceptance of a candidate by all the member states, it surely will be viewed as a giant leap forward.

Dr. Odeen Oshmael

(The writer is Guyana's ambassador to Venezuela. The views expressed are solely those of the writer.)

Standard policy in the US., Canada and the EU to accuse Venezuela of being a dictatorship without one iota of proof!

VHeadline commentarist Kenneth T. Tellis writes:
We hear allegations of how the present government of Venezuela does not respect Human Rights or Freedom of the Press ... but that may not be all that it's made out to be...

As in every country, there are elements that attempt to use both pressure and guile to limit Freedom of the Press or Human Rights, and we should not always judge without having all the facts at hand.

In Venezuela, as in any other country, it may be the exception rather than the rule, so rash judgments can skewer up reality!
  • To point at Chavez and say that he's a manipulator, does not always mean that the accusations are true, because the press could be slanted depending on their political leanings.
The US-controlled press and its agencies throughout the world have a way in which they manipulate the news and create the false impression that Venezuela is violating Human Rights and Press Freedoms ... which may not be the case at all, but is instead the slanted view of the US government and its agencies.

Just think of the fact that lawyer in New York was arrested by a mall security officer for wearing a T-shirt with: 'GIVE PEACE A CHANCE' written on it! Is that not a violation of Human Rights? Then, of course, a high school student in Ann Arbor, Michigan, who was expelled for wearing a T-shirt with a picture of George W. Bush and the words 'War Criminal' on it. Was this not in violation of Human Rights?
  • It's all very well to attack Venezuela, or even Chavez, but not to attack the criminal policies of the Bush regime ... because that will get you in very serious trouble! ... and, by the way, that is called democracy and human rights in the USA, Canada and the EU.
It has become standard policy in the US., Canada and in the EU to accuse Venezuela of being a dictatorship without one iota of proof, because that's simply government policy, which must be blindly adhered-to by the news media in those countries.

But, the Canadian press takes the cake ... it blindly supports the US viewpoint worldwide without question.

In Canada, Chavez and Venezuela have been given a bad name by the press ... all without any proof whatsoever.

But what the Canadian press will not permit is the news of Human Rights violations and suppression of Freedom of the Press on their own doorstep. They will permit an attack on English-speaking people or their community by quebecois, even when it�s questionable, but will not permit any attack on the on-going Human Rights violations, or the suppression of Freedom of the Press when it comes to Quebec. One can therefore write a letter against Canada�s English-speaking majority and have it published, but they will not tolerate any such letter about Quebec or the quebecois.

How it is that Canada faults Venezuela on Human Rights but violates them herself?

Press Freedoms and Human Rights are not a Canadian thing! If one writes on what is happening to English-speaking people in Quebec, there isn't a chance in Hell of having it published, because both the government and its links will stop any criticism of Quebec or the Quebecois. If anyone on a Radio or TV Station even raises the question of Quebec�s Human Rights and Press violations, or linguistic oppression of English-speaking people they will be fired immediately.

That of course is Canada�s contribution to Human Rights and Freedom of the Press.

The strict policy of monitoring Radio and TV programmes keeps all the REAL news out and allows for false propaganda to make it onto the airwaves ... not just in Canada but also worldwide.

That of course it what Canada calls freedom ... for want of a better term?

Kenneth T. Tellis

Fred Cederholm: Where is equal coverage of the good, the honorable, and the positive?

VHeadline commentarist and money market expert Fred Cederholm writes: I've been thinking about reputations, the shoebox, Lincoln, Stevenson, Douglas, Dirksen, Ogilvie/Thompson/Edgar, Quinn, and Madigan. I was born and raised in Illinois. I have three college degrees from the State's premier University at Champaign-Urbana. I love this state and I am ever so proud to be known as an Illini, but I am so angered and frustrated now.

You see Illinois, the Prairie State, once again finds itself as the poster child for extreme political corruption.

Our current Governor has once again brought the NEWs spotlights of the entire world on this "Land of Lincoln." The limelight once more focuses on the most sinister side of the political maxim "the buck stops here."
Unfortunately this does not always only just refer to the actions of a US President ... this is the third time in my lifetime where misdeeds, greed, and corrupt behavior have made Illinois the brunt of jokes nationally and globally. This hurts me and all citizens of Illinois. It defiles the reputations of the many great political figures associated with this state over the course of our history.
The first involved a cash filled shoe box found in a Springfield Hotel suite after the death of our then long term Secretary of State some 40 years ago. The second occurred when our most recent EX-Governor began his lengthy term in the slammer. He was not our first to do time by any means and he appears not to be the last. The current alleged "pay to play" debacle lowers the bar for elected official misconduct even by Illinois standards! Last week saw the opening monologues in the late night shows of Leno, Letterman, Kimmel, O'Brien, and Fergusson be replete with Illinois jokes. The most damning came in the opening skit that ended with "Live from New York, It's Saturday Night…!"

Illinois is no longer colored a red state, or a blue state; it is colored "THE black and blue state."

When US Attorney Patrick Fitzgerald last week held the press conference and read from the 76-page indictment of our sitting Governor, he said that the behavior noted would have Abraham Lincoln (a Republican) spinning in his grave. Lincoln is without a doubt the greatest political figure associated with Illinois. His legacy enjoys a world-wide following. Hundreds of thousand of visitors come to the Lincoln sites in the greater Springfield area to pay homage to him every year. Lincoln's leadership preserved the Union of the United States. His "with malice toward none and charity for all…" set the standards for bi-partisanship and healing in a time of great troubles, division, and hatred.

Almost a century later former Illinois Governor Adlai Stevenson (a Democrat) captured the spotlight of the world during his tenure as US Ambassador to the United Nations. The world was in crisis as Russian missiles were being deployed 90 miles off our shores in Cuba. He rose to the occasion seeking a confirmation (or public denial) of the buildup: "You can answer yes or no. You have denied they exist. I want to know if I understood you correctly. I am prepared to wait for my answer until hell freezes over, if that's your decision. And I am also prepared to present the evidence in this room."

Also in the 1960s, Illinois was represented in Washington, D.C. by perhaps two of our greatest US Senators -- Paul Douglas (a Democrat) and Everett Dirksen (a Republican). These men not only served this great State, but also this nation as a whole. They worked together for the good of all Americans. Their cooperation, team work, and leadership were instrumental in achieving the passage of the Civil Rights Act at a critical time of great crisis and turmoil for our nation.

The press has zeroed in on recent ex-Governors who were indicted and/or did time. They only passively mention that Dick Ogilvie, Jim Thompson, or Jim Edgar (all Republicans) did not. They also fail to zero in on the accomplishments of these men for the citizens of Illinois and the wider public.
  • In the crisis now embroiling Illinois, we have only seen media snips of Illinois Lt. Governor Pat Quinn and Illinois Attorney General Lisa Madigan (both Democrats) rising to the occasion to remedy the unfolding crisis and placate our troubled waters here.
Where is equal coverage of the good, the honorable, and the positive?

Fred Cederholm

Kenneth T. Tellis: Venezuela's Hugo Chavez is caught between a rock and a hard place...

VHeadline commentarist Kenneth T. Tellis writes: If such an attempt to extend terms of the Presidency is illegal then one can understand the reasons ... but beyond that their no point that can be held as valid.
  • Many countries including Canada, where the prime minister is elected, there are no time limitations to holding that office.
While we may question Hugo Chavez' reasons for having another referendum so soon after the last one of December 2, 2007, there is no reason to suspect that he breaking any of Venezuela's laws and voiding the Constitution.

There are two sides the present issue. While it may seem easy to fault Hugo Chavez on having another referendum so quickly, we should evaluate the reasons why the opposition is so upset with this move. Let's first look at the make-up of the opposition before we pass judgment on Hugo Chavez.

Is the opposition truly Venezuelan in character, or is a front for a foreign power that wants the control of Venezuela?
  • If the answer is yes! We can well see there are reasons for Chavez' attempt to hold another referendum to extend his presidency.
It is not democracy that has come in conflict here, but the means of how it can be sabotaged by outside powers, with excuse that what is now being done is not democratic.

Thus Hugo Chavez is caught between a rock and a hard place.

Remember always that the final decision lies with the Venezuelan electorate and not the opposition parties that oppose such a referendum by Chavez. Thus it now must be left in the hands of the people of Venezuela and only they can make a decision as whether or not Chavez can extend his term as President of Venezuela.

The opposition must not mix up freedom with license to oppose Chavez for the sake of extending his term ... but whether it serves Venezuela and not an outside power.

Kenneth T. Tellis

New Tribes Mission Pastor distributed more than 6,000 child pornography pictures and videos online.

Thousands of images of child pornography, investigators said Friday, were found on the computer of a former local youth pastor. Deputies found the images and said the suspect admitted he's addicted to child pornography.

Investigators said 36-year-old Joel Price worked as a youth pastor at New Tribes Mission in Sanford. They said he resigned after undercover agents busted him looking at and distributing more than 6,000 child pornography pictures and videos online. "He was almost relieved to be caught and have this obsession stopped," said Gary Davidson, of the Volusia County Sheriff's Office.

Volusia County investigators said Price confessed that he's obsessed with child pornography. Detectives said they got a tip that more than 6,000 child pornography photos and vidoes were being distributed on the Internet from Price's Deltona home, which is right across the street from a church.

Investigators traced the computer and illegal activity to Price, who detectives said works as a youth pastor at the Mission. "These cases are always shocking, always disturbing, particularly so when it's someone who works with children," Davidson said.

"To have someone that close by looking at that stuff, knowing there's a lot of kids in the neighborhood," neighbor Jason Martinez said. "You can't do bad things and expect not to get caught."

A representative with New Tribes Mission said Price worked in a missionary maintenance role with tribes in Venezuela, not as a youth minister. But WESH 2 reporters found a picture of Price going over a bible verse with a boy.

Investigators said they don't believe he carried out any sex acts with children, but said the Internet images are very real of girls younger than 12. "They were victimized when these images were shot and victimized over and over again when they're passed," Davidson said.

"I don't know how much help you can get those folks if they're really that into it," said Price's neighbor, Rose Mary Thompson. "Man's humanity towards man keeps getting worse and worse."

Price's arrest and federal indictment are the result of an eight month investigation. Volusia County investigators said it's one of the largest child pornography collections they've seen.

Chavez pardons 31 people held for common crimes

Venezuela's President Hugo Chavez has pardoned 31 people imprisoned for common crimes. The state-run Bolivarian news agency says the 31 prisoners who have displayed good conduct.
Justice Minister Tarek El Aissami says the state will aid them in their return to society. He did not offer further details Friday. Chavez last year granted amnesty to more than 60 people, including some who had supported the interim government that briefly replaced him during a failed 2002 coup.

Venezuela to seize gold concessions as oil falls, Chavez says

Venezuela will seize several gold mining concessions that previous governments granted private operators, in a bid to supplement falling oil prices with proceeds from state-controlled gold, President Hugo Chavez said Saturday.

Chavez named no specific contracts or companies to be affected, but his mining minister has vowed to next year take over the country's largest mine, Las Cristinas, which is operated by Canadian mining company Crystallex International Corp.

"We are taking back some concessions that former governments have given, and whose permits are still held by some rich people," in order to reduce public reliance on oil, Chavez said.

Venezuela relies on oil for 94 per cent of exports and roughly half its federal budget, making it unlikely that its largely undeveloped gold reserves could compete.

But Chavez said Venezuela must "increase the country's income through non-oil exports," including its world-famous cacao and products from recently nationalized steel and cement companies.

Chavez acknowledges that oil prices - down 70 per cent since topping US$147 a barrel in July - will affect Venezuela, but he insists the wealthy will suffer more than the country's poor, who benefit from record social spending programs that he vows to continue.

"Social investment will not be halted," Chavez said Friday. "This, for us, is sacred."

Calls to Crystallex's Toronto headquarters went unanswered Saturday, but a Dec. 11 statement said the company had "received no official communication concerning changes" at Las Cristinas.

Crystallex won a contract to develop the mine in 2002, but was forced to halt construction after Venezuela's environment ministry denied its final permit last May.

Chavez's government nationalized four major oil projects in 2006, and has clashed over permits and labour disputes with several international gold mining companies this year.

Mining operations have not yet begun at Las Cristinas, located in Venezuela's biologically rich Imataca Forest Reserve, which covers 35,000 square kilometres. Environmentalists warn that mining there could upset the delicate ecology.

Venezuela produced roughly 4.3 tonnes of gold in 2007. The country is also rich in diamonds, bauxite and other minerals.

Venezuela's Chavez Attacks Cardinal as "Immoral" for Disagreeing on Unlimited Re-Election

Venezuelan President Hugo Chavez described as "immoral" Venezuelan Cardinal Jorge Urosa and said that "he ought to take off his cassock and go into politics," while rejecting the prelate's criticism of the constitutional amendment being promoted by his government to allow unlimited re-election.

"If Christ should appear here in flesh and blood he would lash Urosa, he would throw him out of the church because he is immoral and cares nothing about ethics or his priesthood," the socialist Chavez said.

According to a communique from the presidential palace, Chavez made the statement on Friday while talking over the phone with the nighttime opinion program "Contra Golpe" (Counterpunch), aired by the state channel Venezolana de Television, or VTV.

Urosa has said that "unlimited re-election (of the president) has never been successful in Venezuela," and that the National Assembly - dominated by Chavez's PSUV party - at the request of the president, plans to establish it by means of a constitutional amendment expected to be submitted to a popular referendum in February 2009.

The Catholic hierarchy has agreed with the opposition argument that the amendment will be illegal because the matter of presidential re-election was included in the wide-ranging constitutional overhaul proposal presented by Chavez in 2007 and rejected by the electorate at the polls.

"There is no violation of the Constitution and he (Urosa) knows it . . . it's regrettable that a leader of the church, using his position, is lying in an attempt at manipulation. He knows that the reform presented a year ago is very different from the amendment being presented now," the head of state said.

The amendment proposal for unlimited presidential re-election will be approved in the second legislative debate by the National Assembly's ruling-party majority, and Chavez expects electoral authorities to submit it to a popular referendum in February 2009.

The Venezuelan president accuses the Catholic hierarchy of behaving like activists of the opposition, and regularly uses a variety of epithets in referring to church leaders.