The AP reports [via the Dallas Morning News] that Hugo Chavez has threatened to launch an “economic war” and cut off oil sales to the United States. “Take note, Mr. Bush, Mr. Danger,” the Venezuelan President intoned. Chavez is responding to Exxon Mobil’s attempts to seize billions of dollars in Venezuelan assets, to compensate for the South American country’s nationalization of the multi-billion dollar Orinoco oil project. "The outlaws of Exxon Mobil will never again rob us," Chavez promised. Meanwhile a British court has issued an injunction "freezing" as much as $12b of the assets of Petroleos de Venezuela SA, Venezuela’s state-run oil company. The U.S. imports some 12 percent (1.23m barrels per day) of its oil from the Bolivarian Republic of Venezuela. Oil prices are expected to spike on the news.
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But there’s a glut of gasoline in the US at present. The WSJ reports that refineries are running at 84.3% of capacity, the lowest for this time of year since 2003, and gasoline inventories are high.
Some oil expert guessed that about $16/barrel of the crude price is because of a “risk premium”. That may explain the belligerence of certain oil exporters like Russia, Iran, and Venezuela. Stir up some insecurity and watch your profits climb.
John
Hey, Hugo, if you don’t sell it to us, what are you going to do with it?
Memo to Pat Robertson: Keep your mouth shut. If we ignore him, he’ll probably dry up and go away. If you threaten him again, he’ll find it much easier to sell his message of US Imperialism and prop up his popularity.
Seriously, does anybody really care what this nut sack has to say? I have already stopped buying your oil. I welcome the price spike.
Guys, let me put it straight. I knew a year ago, you would have problems with Venezuela, because checking the world resource data, it clearly states that they hold the 4th largest oil reserve in the world. Iran, by the way holds the 3rd largest oil and 2nd largest natural gas reserve. What a coincidence, that US has problems with countries that have large natural deposits. What is the reason for invasion this time going to be? That venezuelians want to stop trading their oil in dollars and stop mouthfeeding the Federal Reserve? 70% of all money earned from oil trade is returned to Federal Reserve, which then gives credits to frenzied Americans so they can keep on byuing and buying. Soon you will experience external debt growing by a trillion annually. Soon you will experience China diversifying her currency so heavily that they will veer away from dollar. Soon countries one by one will skip dollar as a trade currency. Will you attack all of them, like you attacked Saddam Hussein, because he wanted to switch to trading in Euros? I know why America is fighting like hell to keep the last bastion- the dollar. because behind the dollar there is nothing- no manufacturing, no gold or currency reserves. Chavez, diversify trade, get away from selling your oil to the States.States are in agony of preserving their dollar. Reminds me the fall of any empire- oversized military spending and dying purchasing power of the currency.Weapons of mass destruction? You gotta be kiddin`! I swear to God, someone here will go down in history as featherweight Hitler or Stalin.
Bring it, Hugo.
Maybe then we will start drilling for our own oil instead. His little kingdom is in such turmoil he can’t afford not to sell oil to us. His crude sucks anyway, too much sulfur.
jurisb
Relax.
lewissalem, You’re not really that naive, are you?
Oil is 100% fungible. If you’re buying oil but not actualy buying hydrocarbon molecules sourced from Venezuela, you’re forcing someone else who wants oil to buy it from Venezuela. You might as well put the check in Chavez’ hand yourself.
This doesn’t bode well for his charity program of delivering free heating oil to the poor.
It would be interesting to see the effect of an embargo on the economy. A glimpse of our post-peak future, perhaps.
KixStart – I always thought the same – all oil is fungible. However, I read one analysis that explained about half the oil imported to the U.S. from Venezuela can only be processed by U.S. refineries because it is of poor quality. Thus, Hugo’s threats are rather empty since he can’t sell it elsewhere and his country needs the cash – see reports of shortages of many consumer goods there.
Saber rattling agains the US or Isreal is a time honored tool for distracting citizens from the corruption at home.
Okay, now I’m walking to work!
So if I am reading this right, Mr. Chavez is threatening to not sell oil to the US which means he has to (a) sell it elsewhere or (b) not sell it at all. If he chooses (a) the world oil supply remains unchanged and global prices will remain unaffected (at least by this) and if he chooses (b) then he has far less capital to fund his dreams of a neo-socialist utopia and will be ousted like every other tinpot dictator in South America when his support base crumbles.
Can the US not just find 12% of its energy needs from another source (ie. Canada, Russia, Mexico, etc)?
I recall hemp (the male plant) is capable of producing fuel.
Just sayin’…
mzrunner41:
This is what you were referring to:
“Although Venezuela still is a significant oil supplier to the U.S. its relative importance has been decreasing during the last 5 years, going from second to fourth place among U.S. import sources. This is due to the loss of production capacity of the Venezuelan oil industry, a decline brought about by the politicization of the state-owned petroleum company under Chavez. Not only has production capacity declined but also half of the Venezuelan oil exports to the U.S. can only be refined in the United States due to its physical properties. This means that Chavez cannot easily sell this oil to alternative clients such as China or India. For this to be possible these countries would have to build refineries capable of processing Venezuelan oil, something that would take at least three to four years to accomplish, even if they started today.”
http://www.humanevents.com/article.php?id=23222
I know why America is fighting like hell to keep the last bastion- the dollar. because behind the dollar there is nothing- no manufacturing, no gold or currency reserves.
jurisb –
Are you implying that there actually IS something behind the Euro? Because from everything I have found, there’s no more manufacturing, currency reserves, or gold reserves backing up the Euro that there are backing up the Dollar. It’s just as much of a house of cards. The only reason that there’s any talk of pricing things in Euros is to poke a stick in the eye of the U.S. To claim that fiat money is not produced in Europe just as readily as it is in the U.S. is naive.
Ahh, the problem of “nationalization” of a country’s oil reserves – you get bumbling, egomaniacal guys like Chavez destroying their oil industry through improper production techniques, and poor infrastructure maintenance.
Say what you like, but Exxon-Mobil is the best manager of oil assets in the world – they know how to manage oil fields to get the maximum production at the lowest cost, and least waste.
Oil fields are a natural resource – if you don’t pump them properly, you lose production permanently.
Morons like Chavez can bluster all he wants, but he will lose far more money than Exxon-Mobil.
Venezuelan oil comes from what is called Oil or Tar sands. Basically, it is oil mixed with sand and you have to strip mine for it instead of drill it out of the ground. It is also very expensive to separate the oil from the other stuff you mine. The stuff is all over the world but the only places they mine it is Venezuela and Canada. The American mega oil companies have the resources, expertise, and capital to be able to make money off of it. Chavez stole the operation and didn’t realize how expensive and difficult it was to run and now he is LOSING money on the oil thanks to the crazy government subsidies they have on the local oil. This is him trying to save face and force someone to make a move because he made a mistake and can’t fix it.
Details on oil sands.
Bring it on… time to cut this bozo off from the money spigot.
Wither Joe Kennedy?
Money talks… for the same reason Arabs sell oil to Israel, Chavez will keep selling oil to America. He needs money.
Business relationships are better peace-keepers than soldiers.
mel23:There may a glut of gasoline in the U.S. now but it is still $3.25 a gallon here in central California. Aren’t there some WMD’s in Venezuela?
Since he is capable of producing less and less each day, he may eventually go through with his threat when he can sell all he can make to others. In other words, he will embargo us when it no longer costs him anything.
Until then, it’s just more posturing because it seems to work on a lot of people down there.
This is a game — I sincerely doubt that even Hugo expects anyone outside of his more rabid Venezuelan commie fanboys to believe a word of it.
Guys, let me put it straight. I knew a year ago, you would have problems with Venezuela, because checking the world resource data, it clearly states that they hold the 4th largest oil reserve in the world. Iran, by the way holds the 3rd largest oil and 2nd largest natural gas reserve. What a coincidence, that US has problems with countries that have large natural deposits.
I know you prefer to blame America for all this, jurisb. You have my sympathies. Life must be hell.
In reality it works the other way round: Resources seem to finance corrupt governments. Consider how effective the economy of resource-poor Japan is. Compare that to the resource-rich continent of Africa. Or are you going to blame Africa’s problems on America? What about the Saudis? Explain how it is America’s fault that Nigeria can export oil at $100/bbl and stay poor. I need some comic relief.
What is the reason for invasion this time going to be?
I suspect pres. McCain/Obama/Clinton will argue humanitarian reasons: to stop the suffering of the poor in Venezuela, once the oil export machine colapses. This time expect NATO and the UN to be part of the effort.
Soon countries one by one will skip dollar as a trade currency.
That’s the Greenspan legacy. It happens.
Will you attack all of them, like you attacked Saddam Hussein, because he wanted to switch to trading in Euros?
No, we’ll trade with them. The strong Euro/weak dollar means our exports are more competitive. There’s money to be made!
I know why America is fighting like hell to keep the last bastion- the dollar.(sic) because behind the dollar there is nothing- no manufacturing, no gold or currency reserves. Chavez, diversify trade, get away from selling your oil to the States.States are in agony of preserving their dollar.
You know that? Please share your sources!
Please explain why the resource-rich countries, the ones with all the gold/oil/diamonds behind their currencies are so poor, and their currencies keep losing value.
Reminds me the fall of any empire- oversized military spending and dying purchasing power of the currency.Weapons of mass destruction? You gotta be kiddin`! I swear to God, someone here will go down in history as featherweight Hitler or Stalin.
The featherweight Hitler title is taken: read up on Robert Mugabe, and how he destroyed the economy of Zimbabwe. Chavez is laying claim to the featherweight Castro title. Watch as Venezuela follow the Cuban decline.
For the featherweight Stalin title I would nominate Vladimir Putin. He’s riding high on high oil prices right now, but his day of reckoning is coming.
Oil prices are expected to spike on the news.
So far the spike is under $2/bbl. Come on, Hugo, you can do better than this!
Perhaps a speech at the UN, complete with references to sulfur and diablo would get the “spike” over $5.
KixStart,
It was my understanding the oil from Venezuela is distributed by Citgo here. I do not shop at Citgo.
@ Yankinwaoz :
Bring it on
hmm… when was the last time I heard somebody say “bring it on”?
lewissalem, What’s meant by fungible is that it really doesn’t matter exactly where you got the oil, it’s just oil.
If you buy 20 gallons of gas from Exxon-Mobil instead of Citgo, someone else won’t be able to buy that 20 gallos of gas from Exxon-Mobil and they’ll buy 20 gallons of gas from Citgo.
As long as N gallons of gas are produced and sold, Chavez gets his share. To hurt Chavez, you can’t buy any gas.
If everybody in the US said, “No, thanks,” to Chavez, stopped buying gas from Citgo and bought their gas from Exxon-Mobil, Exxon-Mobil would buy the surplus from Citgo and sell it to you. All the Citgo franchises might go out of business and that might raise the retail price of gas for a time. But Chavez would still get his cut.
Or if, as a nation, we embargoed oil from Venezuela, we’d make up the difference by buying it from someone else, like Saudi Arabia. The Saudi’s former customers would then buy it from Venezuela. There would probably be some distribution inefficiencies. Which would probably be ‘fixed’ by a third party buying it from Chavez, selling it to us and lying about where he bought it.
Chavez would be hurting himself more than us. There are two ways of looking at this.
1) He really could decrease the amount of oil imported to this country (not really, but let’s just suppose). With our technological resources, combined with a large driving force, we would soon develop (4 years or less) other forms of energy and tell the NIMBIs where they can stick it when they whine about the nuclear plant, wind farm, oil drilling rig, etc. in their “backyard.” In the meantime, there would be rationing, either government enforced such as was done during WWII or economically enforced, can’t afford the high price brought about by the law of supply and demand.
2) Nothing happens because we buy our oil elsewhere. The oil market it international. The only difference in Texas oil versus Venzuelan oil versus Saudi oil is the level of sulfur in the oil (sweet oil=low sulfur).
I don’t know personally, but another poster basically said that Venzuelan oil is high sulfur, the least desireable oil. Under either scenario, an embargo would hurt him for more than it would hurt us. While there are several refineries that purchase high sulfur crude oil because they can make a slightly better profit than purchasing the more expensive but easier to refine “sweet” crude they can still operate using sweet curde; it would just raise the price a little (a few cents on the gallon). In the event that we were forced to rely less on foriegn oil, we would certainly suffer short-term damage, but assuming we made it through the few years of extreme pain, we would come out the other end stronger. Meanwhile he would lose his major source of money.
“What is the reason for invasion this time going to be?” The reason for resorting to military force will be the same as always for democracies: a widely shared perception that important national interests are severely threatened. For example, that’s why the US escalated the low-level war that had continued in the Gulf since Saddam lost his land grab for Kuwait. Reasonable people may disagree about the calculation of costs and benefits, but Occam’s razor suffices to explain the motivation.
If there was ever a poster boy for assassination, this guy is it. Certifiably cuckoo.
I’ve heard a couple separate posters here start a “bring it on” chant. I suppose we’ve all forgotten (or re-written) how well that foreign-policy attitude has served us in the last few years.
I mean, unless you guys are a bunch of Stephen Colbert clones, or inadvertently used the phrase without meaning any connection… then my goodness, you must all be mad. What a bunch of testosterone laden hawks you are. Please, take up something like pickup basketball as an outlet for all that aggression and spare us.
Don’t feed the trolls.
If the little man on the street can’t thumb his nose at big oil, what makes the leader of a budding South American socialist movement think he can?
engineer, you claim that weaker dollar will strenghten american exports. Really? like what exports? scrap metal to China? Raw pulp to Japan? People in europe don`t buy American products for simple reason- either they don`t exist, or their quality is so low that no discount can make them buy it. You can sell your Sebring for pennies but people still don`t buy it, they buy 80K overloaded Lexuses. Welcome to reality. you know , chrysler in Latvia is offering 5000Euros discount for minivans , Sebrings and 300c but people don`t buy them anyway. How can weaker dollar strenghten exports, if US almost doesn`t manufacture anything? Wekar dollar would be an advantage of a manufacturing state, not China imports patient.
I hear a lot of arguments against Hugo Chavez, but the fact is Mr Chavez won’t be short of buyers for his oil. China and India to name, but 2.
Now I appreciate that this post string could get very messy, but I believe that due to the rise of China and India, suddenly no-one is afraid of the United States anymore. It’s kind of like the school bully who’s just seen 2 new boys come to his school and they’re big and mean!
Just wait until more countries start trading their oil in Euros and watch the fur fly. In fact, here’s a little thought to mull over:
In 2000 Iraq started trading its oil in Euros. People said “You can’t make a profit on that! The Euro is too weak against the dollar!”. In 2001, the Euro appreciated 25% against the dollar and Iraq started making money hand over fist. Iran, soon after, starting trading its oil in Euros. Then, North Korea starting trading everything in Euros and dumping US dollars (Source: http://news.bbc.co.uk/1/hi/world/asia-pacific/2531833.stm). Iraq? Iran? North Korea? Do they have something in common? Axis of something…..?
Recently Mr Chavez has been mulling a switch from dollars to Euros (source: http://news.bbc.co.uk/1/hi/business/6202791.stm) and wouldn’t you believe it? The White House is getting a little testy with Mr Chavez……
katiePuckrik- you are damn right. that`s what I` ve been trying to tell without any positive resonance. And Engineer- if weaker dollar makes better US exports, how come US trade balance is even worse- now exceeding 800 billion dollars. Where are those great exports? pampers? scented buttwipes and rubbermaid boxes?
jurisb: Really? like what exports? scrap metal to China? Raw pulp to Japan?
Airplanes? High technology equipment? Heavy equipment? Sorry to burst your bubble, but there are plenty of American manufactured goods that are exported around the world.
jurisb: People in europe don`t buy American products for simple reason- either they don`t exist, or their quality is so low that no discount can make them buy it. You can sell your Sebring for pennies but people still don`t buy it, they buy 80K overloaded Lexuses. Welcome to reality. you know , chrysler in Latvia is offering 5000Euros discount for minivans , Sebrings and 300c but people don`t buy them anyway.
The reason that American automakers don’t export cars from the U.S. is because their strategy, since before World War II, has been to either open wholly owned subsidiaries in a particular market (the Ford strategy) or purchase existing companies and use them to supply the market (GM with Vauxhall, Opel and Holden).
You use Chrysler as an example, but it has to export vehicles if it wants a presence outside of America. It has no production base outside of North America.
If those Chryslers are subpar, I’d suggest that you point the finger at Daimler-Benz, as the vehicles were developed under its stewardship (that is certainly a stretch for that word!).
The Germans once again proved that they have no clue as to how to appeal to the American mass market, even if they use an American company to do it.
jurisb: How can weaker dollar strenghten exports, if US almost doesn`t manufacture anything? Wekar dollar would be an advantage of a manufacturing state, not China imports patient.
The value of goods manufactured within the U.S. has been INCREASING for the past few years.
Incidentally, several EUROPEAN automobile manufacturers either have built, or are planning to build, plants within the U.S.
An increasing number of their products sold here are sourced from lower-cost areas (U.S. in the case of Mercedes and BMW; South America and Mexico in the case of VW) because manufacturing costs in western European facilities are too high, and the quality is too spotty.
Sorry to rain on your parade with some facts.
KatiePuckrik: In 2000 Iraq started trading its oil in Euros. People said “You can’t make a profit on that! The Euro is too weak against the dollar!”. In 2001, the Euro appreciated 25% against the dollar and Iraq started making money hand over fist.
Um, Iraq wasn’t supposed to be making money hand over fist because of the trade sanctions that were supposedly agreed to by all of the major western countries…except that France and Russia were making backroom deals that violated the sanctions. This is how he was making all of that money…
KatiePuckrik: Iraq? Iran? North Korea? Do they have something in common? Axis of something…..??
It had something to do with them being supporters of terrorism, and causing mischief around the world. We can debate on the proper response to their mischief, but turning a blind eye to it and pretending it doesn’t exist (which seemed to be the preferred European response) isn’t it.
KatiePuckrik: Recently Mr Chavez has been mulling a switch from dollars to Euros (source: http://news.bbc.co.uk/1/hi/business/6202791.stm) and wouldn’t you believe it? The White House is getting a little testy with Mr Chavez……
The White House has been more than a little testy with Chavez long before this, so there goes that theory.
I hope that Bush (and whoever is elected in November) leaves Mr. Chavez alone and allows him to simply implode…that way people can see him for what he really is. Of course, this will require the “anyone-who-is-against-America-is-my-friend” crowd to admit that leaders can be cruel, ruthless and oppressive on their own, and it’s not America’s fault. Such a change in thinking would undoubtedly cause their heads to explode, so I’m not holding my breath…
We have several important exports. Software and computer hardware (the high dollar stuff, not commodity), aircraft, heavy machinery, etc.
A few things are involved with the trade imbalance in my opinion. Take note that my macro economic knowledge wouldn’t get me a grad degree at even a third tier school.
First, the trade imbalance is a lagging indicator. It takes time for the markets to adjust (like cars in Canada). Second, many of our exports do not get credited because a lot of intellectual property is owned by off shore entities to avoid our stupid taxes. Most other countries do not tax exports nearly as much as we do (a good reason to switch to consumption taxes). Another reason is that we are wealthy. We will keep importing because we CAN. It will take a long while for that to change.
If Chavez refuses to sell oil to the US, I give him two months tops before some CIA-initiated overthrow scandal ensues. That should bring back some fond memories for Hugo.
geeber- airplane export? For what value? for what diversity? Do export value of us airplanes cover even toy import value from China?
please name me the companies of those high technology equipment.name me these companies of heavy equipment and machinery, and the value of exports. what Us strategy has to do with detroit3? Anyone can come in US make a factory and then export import, reimport or whatever except US companies?And chrysler has factories outside US- in china, Austria etc.And Daimler benz is to fault for subpar quality? Geeber, was Chrysler`s quality better before merger? Was it better after?It has never been good enough.did Mercedes order Chrysler to use supercheezy plastics for interiors? if companies use cheaper labour abroad what the heck are japanese factories doing here? koreans?
Iran ,Iraq and North Korea- being supporters of terrorism? So you believe that governments of thes countries decided to give money to terrorists who would do what? kill Americans?
The value of goods manufactured in America has been increasing in last years? What do you mean? Production volume in amount? or inflation added to the price?
Landcrusher- `we will keep importing because we can`. I`d say ,you will keep importing as long as China will allow you. your state of being rich has to do with huge debt and achievements of your fathers who worked their asses off. This generation is just depleting the last remains of the cash hord and growing external debt together with their bellies.
Landcrusher, if Americans are so rich why do they sell artificially flavored crap in their groceries, if they are rich why do 100 000 people apply for 6000 job positions near Flint offered by a toyota transplant? Why do your house cost zillions yet are built of gyproc and cheapest materials? If your country is rich why the only brick houses in your towns are government postal services or Banks? Why do you sell Whiskey in plastic bottles? Food stamps? Subprime foreclosures? Let`s see baby boomers punching right in your balls with their 44 trillion pension bat!
jurisb: geeber- airplane export? For what value? for what diversity? Do export value of us airplanes cover even toy import value from China?
Boeing exports planes…and we export MORE than planes, so the need to have airplane exports match the imports from China only exists in your imagination.
jurisb: please name me the companies of those high technology equipment.name me these companies of heavy equipment and machinery, and the value of exports.
Um…Microsoft? Caterpillar? General Electric (locomotives)? Plus, hundreds of smaller companies that thrive in export markets. Here in Pennsylvania many smaller companies export their products. Sorry, but America’s export-import picture is much more complex than you make it out to be.
jurisb: what Us strategy has to do with detroit3?
You are the one who went straight from what America exports, to the failure of American cars to penetrate European markets with this post:
People in europe don`t buy American products for simple reason- either they don`t exist, or their quality is so low that no discount can make them buy it. You can sell your Sebring for pennies but people still don`t buy it, they buy 80K overloaded Lexuses. Welcome to reality. you know , chrysler in Latvia is offering 5000Euros discount for minivans , Sebrings and 300c but people don`t buy them anyway.
You are the one who equates the Detroit Three with America’s “export strategy.” The simple fact is that there is a rational reason for why Detroit does not export many cars made in the USA, and America’s export strategy is not centered on automobiles (and has not been for decades, despite the bleatings of Detroit management regarding Japanese and South Korean markets).
jurisb: Anyone can come in US make a factory and then export import, reimport or whatever except US companies?
“Anyone” includes BMW and Mercedes. Two blue-chip European companies that find the USA an attractive place to manufacture vehicles.
The U.S. companies don’t export many vehicles manufactured in the USA because they already HAVE engineering facilities and plants in Europe, Australia and South America that design, engineer and build vehicles for those respective local market.
Why would Ford, for example, export American-made vehicles to Europe when it already offers a full line of vehicles that are built right there and are designed for local tastes and needs?
jurisb: And Daimler benz is to fault for subpar quality?
Um, yes, considering that DAIMLER people were in charge of Chrysler, which means that they bear ultimate responsibility for what left the factory gates.
Incidentally, given Daimler’s absymal quality ratings over the past decade, this should not come as a surprise.
jurisb: Geeber, was Chrysler`s quality better before merger? Was it better after?
Getting better, and no, it didn’t.
jurisb: did Mercedes order Chrysler to use supercheezy plastics for interiors?
Daimler was IN CHARGE of Chrysler, it put its people in charge of running the company, which means that it had oversight over all decisions, including the materials used for the interiors.
Perhaps you do not understand this concept, but when Company A owns Company B, and Company A has veto power over Company B’s decisions, and puts its people in charge of Company B, it bears the ultimate responsibility for what Company B produces. This is what happened with Daimler (Company A) and Chrysler (Company B).
Which is why the condition of Chrysler is Daimler’s fault.
jurisb: Iran ,Iraq and North Korea- being supporters of terrorism? So you believe that governments of thes countries decided to give money to terrorists who would do what? kill Americans?
Yes…hello, wake up and smell the coffee, these companies have been covertly supporting terrorism (not necessarily limited to actions against the United States) for years. For example, check out what North Korea has done to South Korea, or even Japan (blowing up a Japanese airliner in the 1980s).
There are reasonable differences over how to deal with the threat that they pose, but the bottom line is that they are supporters of terrorism.
jurisb: The value of goods manufactured in America has been increasing in last years? What do you mean? Production volume in amount? or inflation added to the price?
Production volume and actual dollars generated.
juisb: Why do your house cost zillions yet are built of gyproc and cheapest materials?
Most Europeans couldn’t even afford the American houses built of “gyproc and cheapest materials.” That is why more of them live in apartments than their American counterparts, and why their houses tend to be smaller than their American counterparts.
Food stamps? Subprime foreclosures?
Europe has welfare, too, and the housing bust is affecting European countries as well. Britain, the Netherlands and Germany are particularly vulnerable.
jurisb: Let`s see baby boomers punching right in your balls with their 44 trillion pension bat!
The same thing is happening in Europe, too, only its far worse…your population is older, and there are fewer younger workers to support them than there are in the U.S.
Getting back to cars, you should start learning just how absymal the quality of your vaunted European automobile manufacturers really is…they survive on cachet and the driving experience and lease deals (because owners don’t want to worry about maintaining the vehicle after the warranty ends). Unfortunately, they are also losing customers (someone recently posted statistics that show how customers of European vehicles are much more likely to switch brands than owners of Asian vehicles), as an increasing number of people have the “been there, done that” attitude toward European cars. VW cannot compete with Honda/Acura, or even Toyota, which is why it loses money in the U.S….BMW and Mercedes have survived by expanding into lower-priced segments, which generates more volume, but ultimate cheapens their reputation, and generates (usually unfavorable) reliability comparisons with other marques.
JB,
Your rant isn’t winning any minds. No one will disagree that we have a trade imbalance with China. So what? What are they going to do about it? Stop selling us stuff. Okay. What exactly would that do to us? No crappy kid toys? If they cut off relations, then we might simply renege the debt. Did you ever think of that? What are they going to do about it unless isolationists like you get in power and destroy our military first?
Lastly, if you want to deny that Boeing, Cessna, Caterpillar, Deere, Sun Micro, IBM, and scores of other companies export products and services around the world then go ahead. It won’t make it so.
Landcrusher- do you understand the difference between an isolationist and a non-interventionist?US should trade with countries on equal terms, and equal values, not invade other countries under a pretense of promoting democracy. I am not against military industry because it yelds a lot of inventions and also drives manufacturing, but Yet I understand that every dollar spend on military yelds less than it could be returned from direct industry investments and R&D. Us spends 1 trillion annually on exposing their weapons in order to justify their manufacturing. Instead they should be escalating military technology at home, reducing size and increasing effectiveness. Every dollar spent on a useless mission in Iraq could be spent for replacement of C-130 hercules, or pouring new blood in next gen Chinooks, or scout helicopters. Instead of that US is left with endless versions of their obsolete Kiowas or B52s. basically speaking- regrilles. No Abrams replacement, No Osprey transport version, no f-22x interim bomber, etc.
About China- You have to understand that US imports very important components from china, including steel, heavy machinery , electronics and household appliances. If uS stopped imports from China, US would be basically left lifeless, because the items US makes herself like software or birdhouses, is not the commodity that customers are dying for. Imagine shops without tv sets, players, vacuum cleaners ,fridges, washing machines , phones, cameras etc. Us has quit manufacturing them. What is the item that US produces, but chinese can`t live without? Soda? You see chinese can always find a substitute manufacturer for US items, but US can`t find substitute manufacturer for Chinese items, because us service driven economy doesn`t have enough cash to buy directly components from, say Japan. Chiese market is self sustainable. If 20 years ago chinese themselves couldn`t afford the products they made, then situation today is different . Chinese have become large consumers. They can flood themselves and they can flood Europe. While American products hardly sell in europe , and hardly in China. Chines banks give large credits to US, all they need to do is simply cut sredit lines and US economy will drown. Even president Clinton, in 1997 when asked to raise trade barriers against China, said that it is impossible to do it against our creditors. What you can`t do with your Minuteman or JDAM, Chinese can do with their credit lines and exports. Of course US still has a lot of manufacturing companies, but much less what it had 30 years ago, while japanese haven`t lost a single fucking electronics or machinery company in last 50 years.Landcrusher ,you sound like a mad baby in a sandbox- what are you going to do with us, bla, bla. China isn`t going to do much, just diversify the currency reserve, and strngthen yan by gold, and switch oil trade to non- dollar currency.They are going to cut attached strings- one by one, one by one. let`s see you talking in the end of this year when US will have hit really deep into recession. You see, nothing in this world can be created from thin air, and US will have to pay for it. Sorry to say so.
geeber- I will return to you later.
geeber i even don`t want to go into discussion with you, probably you should go and research more data on american economy and it`s current issues. About cars- Show me a single american made car that would have a quality similar to a simple Skoda Roomster or Seat Altea? you can take even luxury american brands. When you answer that, I will discuss the economy issues furhter. I
jurisb: Landcrusher- do you understand the difference between an isolationist and a non-interventionist?
A better question would be: Do you have any idea what you are talking about?
jurisb: US should trade with countries on equal terms, and equal values, not invade other countries under a pretense of promoting democracy.
You mean equal values as practiced by France and Russia, which conducted trade with pre-invasion Iraq in violation of U.N. trade sanctions?
Please tell me what “equal values” that policy supports.
jurisb: While American products hardly sell in europe , and hardly in China.
Oh really? Buicks and Cadillacs (made in China, of course) are some of the best-selling cars in China.
jurisb: Of course US still has a lot of manufacturing companies, but much less what it had 30 years ago, while japanese haven`t lost a single fucking electronics or machinery company in last 50 years.
The Japanese economy has been in a serious recession since 1990, despite not having lost a single electronics or machinery company.
The U.S. economy has bested the Japanese economy in every important meausure of economic performance.
Which undermines your whole argument.
jurisb: geeber i even don`t want to go into discussion with you…
A wise move on your part…
jurisb: You probably you should go and research more data on american economy and it`s current issues.
More research is advisable on the part of one poster, but it’s not me…
jurisb: About cars- Show me a single american made car that would have a quality similar to a simple Skoda Roomster or Seat Altea? you can take even luxury american brands.
Regarding reliability (i.e, the number of times the car must be taken for unscheduled maintenance or repairs), several Fords and GM cars would easily beat any Skoda or Seat. The Chryslers wouldn’t, but, as we all know, Chrysler has been under the control of Daimler since 1998, and Daimler reliability is terrible (although Daimler vehicles have great build quality – nice paint, great panel fit, great upholstery, etc.).
Skodas and Seats are reworked VWs, and VWs have regularly ranked near the bottom of reputable quality surveys conducted in the U.S. (those conducted by J.D. Powers and Consumer Reports).
You can be forgiven for not knowing this because Europeans are less demanding than Americans regarding reliability.
If you are talking about build quality – I’m sure that the new Chevrolet Malibu, Cadillac CTS and Ford Fusion/Mercury Milan would equal the Skoda and Seat.
jb,
At this point, using Iraq as evidence in an argument about anything OTHER than Iraq is fruitless. If your trying to make the point that we invaded Iraq to free it’s people, then you are mistaken. The invasion was admittedly a mistake. Once we made that mistake, every decision afterwards is hard to judge because all the choices were bad.
And, yes, I do know the difference, but it’s a fine line.
On China, I disagree with your data. I don’t believe that we are “dying” for anything we sole source from them. Certainly, if trade stopped tomorrow it would be disruptive, but no more to us than them.
I will be glad to return to this subject at the end of the year. I suspect our relations with China will be little changed, recession or no.
Geeber-Ok. Which ford would exactly beat Skoda or Seat in reliability? probably the one with most non-american contents. Like mazda built fusion with ford tin. Do you understand that there is no such deal as american-japanese joint venture. there is omly japanese cars with US copmanies byuing stakes in them. i did some practical research, and ripped apart some claddings off 2 cars-Ford Probe 97` and Dodge stealth 95. guess what ,even those parts that were different from their original mazda and mitsubishi versions, were completely designed and stamped by- mazda and mitsu. Stealth`s only Chrysler product was the gearbox which had so evident problems with 2nd gear that was replaced by german getrag 6speed and Mitsu`s 5sp. one.
yes VW has some quality issues but at least they don`t have pathetic fit and finish,. their interiors are rock-solid.
Us economy has bested japanese in every single component/ Ok geeber- here it goes.
Sectors where Us looses-
External debt, national debt, GDp per capita, Gold reserves, Currency reserves, Export value, trade balance, industrial output, manufacturing value, Bank assets, manufacturing percentage within GDP.
Actually all I care is manufacturing percentage as part of GDP. If US GDp represents credits and services more than 85% of GDP, I can`t consider your economy a serious one.
And yes Japanese hav had a recession or slowdown, but they have preserved their manufacturing companies. US couldn`t do it even having a boom. how come? And don`t make a fool of yourself naming cadillac and buick sales in China as significant numbers, if we count off those cars that are rebadged chinese or german opels, you have a sales number that of Dacia, not more. Probably the same way you could claim that Cadillac is very popular in Japan. hahahhaha.
And whenever I talk how bad is US economy ,you start something about Europe, France or Africa. I don`t care of them. Even if they are coughing blood, I am talking just about USA. Period.
Just go on voting for obamas and hillaries and mccaines, probably you don`t deserve the good doctor.
jurisb: Geeber-Ok. Which ford would exactly beat Skoda or Seat in reliability?
Virtually all of them. Give me your address, and I’ll send you a copy of Consumer Reports annual auto issue (which will be distributed within the next month), which rates the reliability of all vehicles sold in America, including VWs. Ford products have regulary bested VW products in that survey.
You’ll be so much better informed, and won’t make the mistake of comparing the reliability of European cars (especially those based on VWs – LOL!) to the reliability of American cars.
I think we can safely extrapolate the performance of Skoda and Seat from VW’s (abysmal) showing.
I’ll happily compare any American Ford to the Skoda or Seat.
jurisb: probably the one with most non-american contents. Like mazda built fusion with ford tin.
Mazda and Ford worked together on that platform…it was a joint effort between the two companies. They collaborated on the project. Ford did not simply put new sheetmetal on the Mazda6 to create the Fusion/Milan/MKZ. Ford did what a smart company does – use an available resource to produce a very good product that appeals to customer.
jurisb: Do you understand that there is no such deal as american-japanese joint venture. there is omly japanese cars with US copmanies byuing stakes in them.
Wrong. Ford is COLLABORATING with Mazda to produce vehicles. It owns a 30+ percent stake in the company (enough to own a controlling interest under Japanese law).
Ford has worked closely with Mazda and Volvo on new vehicles, including the Fusion/Milan and the one used by the European Focus, Mazda3 and small Volvos. All THREE companies provided vital input for those projects.
The fact that these joint efforts have produced excellent vehicles for all three companies shows that Ford knows how to properly leverage its resources to produce good products.
jurisb: i did some practical research, and ripped apart some claddings off 2 cars-Ford Probe 97` and Dodge stealth 95. guess what ,even those parts that were different from their original mazda and mitsubishi versions, were completely designed and stamped by- mazda and mitsu.
You do realize that today is February 15, 2008, and that the vehicles you examined are over a decade old, and thus completely irrelevant to what Ford is doing TODAY. (And those cars were DEVELOPED more than 10 years ago if they were in the market in 1995 and 1997.)
When you research what is happening TODAY in the automobile industry, let me know. That will be “practical” research…not to mention relevant research.
jurisb: yes VW has some quality issues but at least they don`t have pathetic fit and finish,. their interiors are rock-solid.
I’m sure VW owners appreciate the interior craftsmanship and fit-and-finish while they are waiting for the tow truck to take their beautifully built driving machine to the dealer…
jurisb: Us economy has bested japanese in every single component/ Ok geeber- here it goes.
Sectors where Us looses-
External debt, national debt, GDp per capita, Gold reserves, Currency reserves, Export value, trade balance, industrial output, manufacturing value, Bank assets, manufacturing percentage within GDP.
Take an economics course, then you will learn how to actually tell when an economy is performing better. The U.S. economy beats Japan’s on employment growth, productivity growth, and overall economic growth…sorry to burst your bubble. Some Japanese companies such as Honda depend on the American market to keep them in business – the home market is too weak.
I’m sure that those unemployed Japanese appreciate the fact that their country has more gold reserves than the U.S.
As for the Japanese economy having a higher percentage of its GDP consist of manufacturing output – so what, this is irrelevant. The U.S. economy has made the transition faster to a mixed economy, where services are a larger percentage of the total GDP.
Sorry, but manufacturing output is not the sole sign of a country’s economic vitality (and, as I pointed out, U.S. manufacturing output has been INCREASING) anymore.
It’s not 1948 anymore.
jurisb:Actually all I care is manufacturing percentage as part of GDP. If US GDp represents credits and services more than 85% of GDP, I can`t consider your economy a serious one.
Which is the root of your problem regarding your “critique” of the American economy, and why anyone who has passed Econ 101 would consider your views to be outdated at best, and hardly “serious.”
jurisb: And yes Japanese hav had a recession or slowdown, but they have preserved their manufacturing companies. US couldn`t do it even having a boom.
“Preserving companies” is a waste of time and resources. It does not matter what companies produce the output.
What matters is whether TOTAL manufacturing output increase or decreases, and, as I’ve said in the U.S. it is INCREASING.
jurisb: And don`t make a fool of yourself naming cadillac and buick sales in China as significant numbers, if we count off those cars that are rebadged chinese or german opels, you have a sales number that of Dacia, not more.
You are the last person who should label anyone else with the “fool” epithet. Cadillac and Buick have been selling vehicles based on revised American platforms (Buick LaCrosse and Cadillac STS) and the ZETA platform (Buick Park Avenue). They aren’t just “rebadged” Opels.
jurisb: And whenever I talk how bad is US economy ,you start something about Europe, France or Africa. I don`t care of them.
We can’t talk about the U.S. economy in a vacuum, especially if we are talking about how it is (allegedly) underperforming, so we compare it to other economies. Besides, this thread was originally about Venezuela, so the discussion has never been limited to the U.S.
Incidentally, you brought up China, Europe and Japan, so YOU are the one who “started” talking about other countries.
jurisb: Even if they are coughing blood, I am talking just about USA. Period.
The real problem is that you have no clue as to what you are talking about, period.
For whatever reason, you apparently don’t like America, which is fine, that is your choice and your right, but the ignorance displayed on your posts shows the limitations of this worldview. America has problems, I certainly won’t deny that, but I want informed criticism, not silly rants or mindless America bashing.
At the very least, I hope that you’ve learned why Daimler is responsible for the vehicle’s Chrysler produced, and why it bears responsibility for running Chrysler into the ground. You need to take off the ideological blinders that are limiting your understanding of many issues…including the state of European automobile companies.
In the meantime, do yourself a favor and take an ECON 101 course so that you stop coming across as completely clueless on economics, and do some serious research into the automobile industry, and I don’t mean looking at 1990s Fords…
Ford did what a smart company does? How come all japanese and german companies are sooooo stupid and create their own platforms. And by the way japanese set new `stupid`profit records every year. How come retarded germans din`t get the smart idea of borrowing somebody`s engines, trannies, or electronics.
When i mentioned Stealth and Probe, I wanted to show that a cheetah never changes his spots. If ford avoided engineering when it was quite prosperous, what should make me believe that they did so while bleeding cash.
See, geeber if I hated America, i wouldn`t give a shit about her economy, and wouldn`t read all economy reports. i wouldn`t listen to Ron Paul, Peter Shiff, or Steve Forbes. your comment is a bit ridiculous about well performing us economy.
jurisb: How come retarded germans din`t get the smart idea of borrowing somebody`s engines, trannies, or electronics.
You do realize that BMW uses transmissions made by General Motors?
Generally, however, German manufacturers do not share components because they are as arrogant as Detroit used to be, and they can get away with it, because European customers place much less priority on reliability than American customers do.
Note, however, that VW loses money in North America, and “successful” Damiler-Benz ran Chrysler into the ground, and still has had to ask its German unions for concessions. Which is why VW is planning to sell…a rebadged Chrysler minivan. Looks as though at least one German automaker isn’t above rebadging an American vehicle.
jurisb: When i mentioned Stealth and Probe, I wanted to show that a cheetah never changes his spots.
And what you really showed was that you don’t know what you are talking about, because the Fusion/Milan/MKZ is not merely a rebodied Mazda, as the Probe was.
Generally, it’s best to compare apples to apples.
jurisb: If ford avoided engineering when it was quite prosperous, what should make me believe that they did so while bleeding cash.
What you or anyone else “believes” Ford did is irrelevant. The FACTS are that Ford is NOT using rebodied Mazdas for its cars.
Do you also realize that the V-6 used in the Mazda6 was designed and built by Ford? Which punches another big hole in your example…
jurisb: See, geeber if I hated America, i wouldn`t give a shit about her economy, and wouldn`t read all economy reports.
Judging by your posts, you need new reading material.
jurisb: your comment is a bit ridiculous about well performing us economy.
When you have something to back up your opinion, let me know. Methinks you will have to get new reading material before the well-informed can take your opinions seriously.