Hitting the “Nationalism” button too often

It gets at times pretty scary.  What nationalism means, at least to Trump supporters, is we do what is in our interest.  Actually, the US foreign policy always has put the country’s interest at its top priority.  It’s really the short-sighted policy of Trump when our policy extends to telling  other countries  what to do or we will try to screw them over big time.   I have said about a 100 times, you can’t win a trade war or an arms race, because your enemies will retaliate, a guaranteed lose-lose outcome.  Trump’s nationalist policies have shut out international cooperation of other countries in helping solve problems.   China could have helped us with to denuclearize North Korea, but not any longer.  Most of the time, Trump’s threats are really hot air.   At the last minute, he’ll find a reason not to take immediate action, but still leave this lingering idea that other countries are doing really shameful things.   Sort of like, you’re bad and we’ll get even later.  Very dumb and kind of childish.    And he will always, always claim victory. Saber rattling, blaming others and just plain lying are sad ways to run foreign affairs.

Case in point is our Venezuela policy.  Obviously, Trump was quick to support opposition leader,  Juan Guaido on the wrong assumption that the military would throw their support behind him, Maduro would be history.   He attacked the “Biden-Obama” administration for not taking action against Maduro.   He did not mention that during the 11 years Hugo Chavez was in power, intent on destroying democratic and civil liberties, and establishing a corrupt system of governance,  George Bush could do little to prevent this.   Trump claimed his policies worked in Venezuela, as he pressured the Russians to pull out of Venezuela.   In March 2019, (about a million Trump tweets ago) Russia  responded saying this wasn’t true and they were going to honor their commitments made to Venezuela.    See link in below.

Venezuela is a great example of Russia, China and the US each doing what is in their national interest.  Russia and China have invested heavily in Venezuela, which underlies their support of Maduro.   The US would like to see Maduro gone and restoration of a stability in the country.  The  recent visit by UN Commissioner on Human Rights, Michelle Bachelet did not make headline news.  The Trump administration has cut off all funding for the UN Human Rights Council, calling it a leftist organization.  The ultra conservative National Security Adviser, John Bolton,  has really lead the way against using the UN to resolve crises.

“The destiny of more than 30 million Venezuelans resides in the will and the ability of its leaders to put the people’s human rights above any personal, political or ideological ambition,” Bachelet said… The UN human rights chief plans to set up an office in Venezuela to monitor the ongoing humanitarian crisis there. Michelle Bachelet said the dire situation must not be allowed to “deteriorate any further.”

There isn’t a quick solution to Venezuela.  Bachelet’s visit was definitely a step in the right direction.   It says to Maduro to stop lying to its people.

Perhaps, the next great example of misguided nationalism, comes from Trump’s threat to impose tariffs on imported Mexican goods.  Of course, it never happened.  Trump’s version of events is that he pressure Mexico to take action against illegals entering into Mexico by threatening tariffs.  What really happened, is that Mexico offered nothing new, and these “concessions” were made months earlier.   See links.

There are a number of great examples how this overblown nationalism theme has failed.  I’ll leave the Iran drone episode to another blog, and move on to our constant attacks on Germany.    In 2018, Trump took aim at Germany, for their cooperative agreement with Russia to build a second Baltic sea pipeline to supply Germany with natural gas.   Germany was, of course, acting in their national interest.  Trump understood that liquefied natural gas (LNG) from the US to the EU could decline once the pipeline is complete.   See my blog:  https://newsandviews.net/2018/08/08/pipeline-dollars-to-russia-are-not-acceptable/

Using natural gas to generate energy is better than using coal,   The EU  needs the Russian gas, is because the existing production from UK and  Norwegian gas fields have been declining for years.  So, Germany and other EU leaders  are doing what is their national interest, and at this point, I guess, will  just ignore Trump’s comments.

It’s fine for a politician to proclaim his love for his country.  But, any real progress in international affairs must be multi-national, and with this, some of our goals would be compromised.  I guess it’s comes down to a choice of achieving some progress with existing international institutions and agreements, or striking out alone, and coming up empty handed.

Stay tuned,



Russia scoffs at U.S. demand that it pull troops from Venezuela

US will stop funding UN Human Rights Council

As Trade War Spreads to Mexico,  Companies lose a safe harbor

Who won the Mexican Trade War of 2019

Goldman Sachs and Venezuela

President Maduro blasted President Trump for all Venezuela’s problems.  Of course, the US caused none of the problems.  Now, for those looking for a scapegoat, they have Goldman Sachs and what is perceived to intervention by the US to support Maduro.  It isn’t.

Venezuela’s people are suffering from a lack of food and medicine.  The national oil company (PDVSA) is (or was) the lifeblood of the economy.  As the political situation deteriorated,  the bonds of PDVSA became worth less, because the possibility of non-payment (default) or partial payment on the bonds was very high.  If this were an American company,  and they defaulted on their bonds, the investors would seek relief through the bankruptcy courts.  Generally, when immediate liabilities exceed the assets of the company, the company is likely to collapse.  This is the situation with Venezuela with 17 billion in debts to pay in 2017 and only 10 billion dollars in reserves,   Something has to give.

Goldman Sachs entered the fray by buying 2.8 billion dollars of PDVSA bonds on the secondary market.      The bonds were bought at a huge discount (70%) to the market price.  Why?  Because the market wasn’t working, it was in free fall.  Nobody had confidence in PDVSA, and that’s why the bonds sold at the huge discount.     Investors always try to buy at the bottom, and sell at the top.  That’s capitalism, and the only way to stay in the game.

Julio Borges, the opposition lawmaker who heads the National Assembly, wrote the CEO of Goldman Sachs, accusing him of making “a quick buck off the suffering of Venezuelan people.”   Opposition leaders have threatened to cut off  payments on the bonds,  but this is likely just rhetoric.  The covenants with the bonds prevent the issuer from favoring one bondholder over another, so paying just Goldman or JP Morgan or another holder would set off lawsuits.    It would be like hanging from a cliff by a thread and then cutting the thread.   The institutions that sold the bonds, were part of the government, so there was a gain of hard currency in exchange for IOU’s from Maduro’s government.

There were protests yesterday at the Goldman Sachs headquarters in NYC, with signs saying Goldman Sachs supports  Maduro’s  dictatorship.    It is a dictatorship, and the people of Venezuela are suffering.   You can’t get rid of a political leader through destroying the financial system.  Without the flow of some hard currency, the country financial system either collapses, or PDVSA gets chopped up in small pieces and sold (by the way, this is not going to happen).

Stay tuned,