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October 10, 2005

Venezuela is offside, Mon., Oct. 10, 2005, 7:42 AM

Oil traders, and traders everywhere, ought to be concerned with what is happening in Venezuela. The political situation in this nation of 25 million has gone from the sublime to the ridiculous.

Yes, there is the Rule of Law in this major world oil producer; unfortunately, with respect to foreign investment, the laws have been made last month and in the weeks before that. They are in a constant flux.

Venezuela is the next global hot spot, and I intend to write about it.

Affected are the international companies that operate there in the oil, metal mining and banking industries. New rules, based on extreme left-thinking politics as I see it, are taking this nation down the same path Fidel Castro travelled in 1959, which ironically is the same year that democracy took hold in Venezuela.

This is not a good situation. After all, Miami to Caracas is about the same distance as to Dallas or Boston.

I'm going to write about Venezuela this week because the leader, Hugo Chavez, has become a problem for capital markets, including oil markets.

At this delicate point in time, America does not want to see instability in the rest of the Americas, and Venezuela is threatening just that.

Posted by Posted by Bill Cara on October 10, 2005 07:43:40 AM | Category: 10 Energy , International Equity Markets