IN DEPTH: Surviving the US Financial War on Iran and Venezuela


January 8th, 2018 – Fort Russ News – 
– Mision Verdad, by William Serafino, translated by J. Flores for FRN – Please support Flores’ Patreon!

The first Pentagon financial War Games

In the year 2009 in an Applied Physics Laboratory in northern Washington, the Pentagon made a novel war gome. Unlike the typical games that they develop simulating shipments of troops, drones and missiles, the “rules of engagement” linked bonds, financial derivatives and stocks. Several teams representing the US, China, Russia, Europe, East Asia, banks and investment funds simulated a geopolitical event of the collapse of North Korea and a Chinese invasion of Taiwan. It was played to avoid the destruction of the dollar.

In 2015, this time in the offices of the Pentagon, they performed a new simulation but this time much more updated: it was within the framework of a virtual confrontation between the US and China for its South Sea. There, 20 diplomatic, military, CIA and National Security Council participants debated and considered what would be the most effective financial weapons against China, from cyber attacks to state banks and stock exchanges, through the interruption of payment systems via sanctions until the freezing of energy imports.

The blockade against Cuba and the actions of economic insurgency against Chile were like petroglyphs compared to new theaters of financial war that capitalist globalization would draw in high definition.

The financial war game of the South China Sea was after the power game of reality. In 2012, the US expanded the sanctions on Iran for the sovereign development of its nuclear energy program, including an oil, commercial and financial blockade seconded by the UN and the European Union; in 2014 Russia was also a victim of similar war resources product of the color revolution promoted by the US in Ukraine, although the level of virulence was certainly lower than that of the Persian nation. Russia sought to limit the sources of financing for its companies in US and European debt markets, as well as some financial operations in the military and energy sectors.

The US found in the financial system dominated by its banks and green currency – in its last phase of expansion and development – a highly profitable and sophisticated method to suffocate nations and destabilize rival governments with the capacity to confront. Unlike the rudimentary actions of financial warfare of the mid-twentieth century, the 21st century is global and quite more technical.

The way to represent foreign intervention could be said to have changed forever to be replaced by the finances and technical advantages of US globalization, the aggressions are now blurred behind the curtains of the international stockbrokers and banks while on the ground they significantly change the routines of the population, each product of the basic basket and each pocket of the humble homes.
Mirror effect: variables compared after sanctions against Iran and Venezuela

Although the picture of economic deterioration and price increase in the country is consistent with the cycle of US financial and economic sanctions and with the fall in oil prices, the media and liberal economists insist on dismissing these factors in the Inflation behavior.

The Iranian case serves as an example to illustrate how financial sanctions have an impact on the daily lives of affected populations, on their access to consumer products and on overall economic stability.

While it is true that the sanctions applied against the Persian nation went to the extreme of its exclusion from the SWIFT system (a global platform that interconnects the payments and transactions of all the international banks in the world), it is no less true than Venezuela, even though it is not on paper, he suffers an induced disconnection from the western banking system for the realization of international payments and a limitation of his income in dollars, both due to the reduction of oil sales to the US market and the impossibility of issuing debt in that market.

On July 1, 2016, financial dispute specialist Jim Rickards spoke with Mike Hayden , former director of the National Security Agency and the CIA until 2009, about the financial war against Iran. Hayden referred to financial sanctions as “Precision Guided Munitions,” making a comparison with a highly effective artillery rocket. In Rickards’ view, “asset freezing would replace cruise missiles as a way to defuse an enemy.”

In the middle of the conversation they reported the effects of the US financial sanctions against Iran. As the country was excluded from international banking, it had to resort to its gold reserves and barter in order to collect oil and make essential imports. The currency drought favored a black currency market (a Persian Dollar Today) that knocked down the price of the currency, causing bank runs, hyperinflation and a shortage of imported goods. Private estimates put the monthly inflation at 69.9% during the hardest years of the sanctions. Unemployment skyrocketed to 15% and other variables such as the price of food and fuel were seriously affected.

The economic collapse moved quickly to the supply of fuel and public services, because no Iranian entity could make imports while its international assets were frozen, in addition weighed on the country a strong trade, military, technological and scientific embargo. The legal framework given by the UN Security Council during 2006 and 2010 through resolutions was key to the intensification of sanctions.

Hayden and Rickards point out that the black currency market in Iran, due to more attempts by the Central Bank to preserve the price of the currency, had lost half of the value to the Iranian currency. Any coincidence with Venezuela is the product of the parallel dollar as a US financial weapon.

As if it were a mirror effect, the sanctions against Iran and Venezuela have negatively affected the same economic variables with a high level of similarity.

For example, monthly inflation (between 40% and 50%) at the height of the financial war against Iran (2012-2013) reaches a similar peak in Venezuela after the Trump Administration sanctions round and the isolation agenda financing undertaken by the Venezuelan opposition during the year 2017.


A similar behavior occurs with the GDP variable. In 2012 Iran touched the ditch due to the limitations imposed for the sale of hydrocarbons and the depression of domestic trade, just as Venezuela has fallen in the size of its economy in recent years as a result of financial sanctions. In Iran, the behavior of this variable was preceded by specific economic sanctions, while in Venezuela the key factor is the fall in oil prices and the impossibility of issuing debt one year before the sanctions. The low factor of oil prices would also bill Iran later.


Venezuela and Iran share the attribute of being countries dependent on oil revenues and, to a certain extent, of imports that are key to their domestic consumption capacity. This factor constitutes a vulnerability that induces prolonged periods of monetary instability if the currency and indebtedness tap closes as a result of foreign sanctions or a fall in oil prices. The black market currency virus is in a state of latency waiting for the favorable climate (manufactured or not, but the first option is always better) to emerge.

It’s right there where the pincers of the financial war have tightened. And contrary to what economic theory suggests about the causes of inflation (excess monetary liquidity, rigid exchange controls, etc.), both cases are a manifestation of how financial sanctions impact the economic life of a country above of the State’s regulatory approach, including its own capacity for immediate containment.

For example, Iran always maintained a currency control approach that was more flexible than that of the Venezuelan government and yet a black market was born that significantly increased the prices of all goods. Inflation is also globalized and programmed, the Pentagon war games served to study which variables to alter so that the black market wins the race to the State. In Venezuela is the last of its operations.

Needless to say, in the two countries there have been attempted color blows in the Gene Sharp style, with their armed variants on the ground, based on the justification of financial sanctions and with the aim of damaging their relations with Russia and China.

The games are over: the Axis of Evil strikes financially

Hayden shared with Rickards a concern that today is a certainty: “The more you use the sanctions, the less effective they become because you motivate your adversaries to develop alternative payment systems.”

The multiple financial sanctions against Russia, Venezuela and Iran, with the appellant threatening to extend them to China, have generated a solid consensus on the dollar as a weapon of war and the need to create a financial architecture that is not vulnerable to the US.

2017 was a key year in this sense, because Russia, China, Turkey and Iran, as well as some countries of the Eurasian Economic Union, are directing their bilateral trade to their own currencies without going through the dollar’s alcabala. With different financial instruments, China proposes to de-dollarize the oil market – an advantage that gives it the largest consumer in the world – with oil contracts in yuan that are interchangeable in gold. The famous “petroyuan” begins to generate fears as it seeks to replace the dollar as the only oil payment mechanism.

The launch of a “Chinese Swift” in the medium term, together with the massive purchases of gold from Russia and China, the expansion of the Asian Investment Bank in Infrastructure and the growth of the Asian giant as a major trading partner of Latin America and Europe, it will probably make future US sanctions not have the expected effect.

Venezuela as part of that global architecture currently trades its oil in yuan, expands the partnerships with energy titans of Russia and China in the Orinoco Oil Belt and proposes the issuance of a national cryptocurrency (Petro) with which it can seek liquidity abroad and jump the blockades of international banking as a result of the sanctions of the Trump Administration.

Today it is an official member of the Asian Infrastructure Investment Bank, its huge reserves of strategic minerals (gold, diamonds, etc.) deposited in the Orinoco Mining Arc, added to oil and gas, embody a privileged geopolitical advantage in terms of consensus to generate an alternative to the dollar acquires a quality close to the inertia that requires international leadership.

And Rickards’ final question is: “Given that the United States exerted financial pressure on Iran, Russia and China, were not these countries likely to create their own payment systems, develop their own banks and reserve foreign currency, and will they turn their backs on the US dollar system altogether? “

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