"Deres gold n dem hills....black gold...Texas Tea"

Eni makes major oil find in Ecuador

Work done with environmental stewardship in mind, company says.

By Daniel J. Graeber   |   Sept. 18, 2014 at 6:38 AM   |   0 Comments (Leave a comment)

MILAN, Italy, Sept. 18 (UPI) -- Italian energy company Eni said Thursday it made an oil discovery in Ecuador that could hold as much as 300 million barrels in place.

 

Eni announced the discovery at the Olgan-2 exploration well. Drilling encountered a 236-foot column of crude oil and initial production tests yielded a flow rate of 1,100 barrels of oil per day.

 

"Early estimates suggest that the Oglan discovery potentially contains about 300 million barrels of oil in place," the company said in a statement.

 

Ecuador has the third largest oil reserves in South America after Venezuela and Brazil. A member of the Organization of Petroleum Exporting Countries, it exports an average 388,000 bpd and produces around 526,000 bpd.

 

Eni said the discovery was made less than 10 miles away from processing facilities already producing about 12,500 bpd.

 

The Italian company stressed its work in the Amazon rainforest in Ecuador was conducted in what it said was a pioneering way that minimized the impact on the environment to the greatest extent possible.

Follow @dan_graeber and @UPI on Twitter.

 

Ecuador fends off more American culture...we do not want KFC and McDs!!!!!!!!!!!!

Ecuador to target unhealthy diets with 'junk food tax'

Ecuador plans to impose a "junk food tax" on fast food restaurants, and will use the revenues to address the negative health effects on its citizens of diets laden with salt and fat.

• PHOTOS

File photo of a fast food meal. (SCOTT OLSON/GETTY IMAGES NORTH AMERICA/AFP)

 

QUITO: Ecuador plans to impose a "junk food tax" on fast food restaurants, and will use the revenues to address the negative health effects on its citizens of diets laden with salt and fat.
"We are moving past poverty-related problems since the country is progressing a lot, and moving on to problems of affluence," President Rafael Correa said Thursday (Sep 4). The chief of state, who holds a majority in parliament, said the tax would mainly target international fast-food chains, but did not set a deadline for any legislation or outline its exact content.
"We're talking about these big chains where meat is cooked in pans of oil used over and over, which is a threat to public health," Correa said. In power since 2007, the socialist leader has remained popular thanks in part to social programs financed by the country's vast oil sector. In Ecuador, two-third of adults and one-third of children suffer from obesity, according to Health Ministry figures.

- AFP/rw

These Minnesota retirees moved way south - to Ecuador

By Molly Guthrey
mguthrey@pioneerpress.com

Posted:   09/14/2014 12:01:00 AM CDT | Updated:   about 8 hours ago

Minnesota retirees Bob and Diane Hall decided to move to Ecuador after disliking the heat of Nevada and Arizona. (Photo courtesy of Bob and Diane Hall)

 

After Bob and Diane Hall of St. Paul retired in 2008, they, like so many other Minnesotans, moved to the Southwest.
"We decided to get out of the cold and go warm," Diane says.
But the warmth in Nevada and then Arizona was too warm.
"We hated the heat," Diane says. "So we needed a new adventure."
Surprisingly, the Economist magazine provided one.
"Bob read an article in the Economist, a little blurb about Ecuador and how so many ex-pats were moving there," Diane says. "He was reading it to me, and I said, 'Oh, yeah!' I sent him there to do an exploratory trip. He absolutely loved it. I knew if he liked it, I'd like it."
That was about two years ago. Since then, the couple studied up on this South American country.
"The country is about the size of the state of Nevada, so it's pretty small," Diane says. "Part of it is on the Pacific Ocean, and it borders Peru and Colombia."
It also took some time to reassure the kids.
"They all thought we were crazy at first," Diane says. "But they haven't stayed around, either. I have one son in Vegas and one daughter in the Netherlands."
So, after fulfilling some teaching obligations, undergoing orthopedic surgery, selling their house and paring down their belongings, the couple moved to Cuenca, Ecuador, on June 1.
So far, so good -- especially the weather.
"We're just coming out of winter time right now," Diane says. "I think it's going to be 69 degrees today. In December, it gets up to 75 or 78."

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It's also affordable: The couple rents a three-bedroom, furnished apartment in an upscale building for $650 a month.
"Our water and telephone bill totaled $12," Bob says. "Electricity was $10.50."
Bob, 76, a retired researcher and professor, and Diane, 69, a retired respiratory therapist, also find they get a lot of respect in their adopted country.
"People here, they really revere the elderly," Diane says. "Being over 65, almost everything is half price for us. The bus fare, typically a quarter, is 12.5 cents for those older than 65. Even airfare is half price, if the flight originates in Ecuador."
Converting to a different economy has been easy for these Americans.
"Ecuador switched to American currency after problems with their own currency," Bob says.
The people, though, are what make this place feel like home.
"Strangers will greet you," Bob says. "I was at an open-air market that sells fresh fruit and vegetables -- so fresh and no pesticides used -- when a lady came up to me and said, 'Thank you for coming down here.' I thought she was mistaking me for someone else. But she wasn't. She just meant, 'Thank you for coming down and seeing what it's like to live in our country.' "
Spanish is required, though.
"Very few people speak English," Bob says.
"We're taking Spanish lessons," says Diane.
The couple plan to stay in Ecuador indefinitely.
"Do we miss Minnesota?" asks Diane.
Long pause.
"I miss Cossetta's pizza," she said, finally.
Bob sees it differently.
"Down here," he says, "there are no mosquitos!"
To follow Diane and Bob Hall's Ecuadorian adventures, go to ecuadorfinally.blogspot.com.
Molly Guthrey can be reached at 651-228-5505.

Ecuador Announces World's First Digital Currency

By Paul Tullis | Takepart.com

2 hours ago

Last month I flew six and a half hours from Los Angeles, changed planes, flew another two hours, went through customs, and kept using the dollars I’d brought with me. Had I landed in Guam? Was I participating in some underground economy overseas?

No, I’d gone to Ecuador.

Like Panama, El Salvador, and a handful of tiny nations in the Caribbean and South Pacific, Ecuador adopted the U.S. dollar as its official currency back in 2000. As of December, the government just announced, the dollar will have a companion in the South American country: An as-yet-unnamed currency that will exist purely in digital form, stored largely on users’ cell phones. Quito is trumpeting its move as enabling safe storage and transaction of money for people locked out of the bank-based economy, increasing opportunity for the poor. But some economists say the new currency could be the beginning of the end of a decade of stability and wealth expansion in Ecuador that dollarization ushered in.

The switch from the old currency occurred following a period of financial chaos that included a widely fluctuating value for the sucre. That made it difficult for individuals and businesses to plan and invest for the future, said Steve Hanke, professor of applied economics at Johns Hopkins University, who was chief advisor to Ecuador’s minister of finance during the transition. It was “like having a yardstick that’s changing length all the time,” he said.

Since the switch, per capita income in Ecuador has nearly quadrupled, to $5,720—despite government policies that Hanke characterized as “anti-growth.” He said that’s because with the United States’ currency, Ecuador also got the dollar’s inflation rate and its exchange rate to other currencies. The three Latin American countries using dollars today have the lowest “misery index”—that’s the sum of the inflation, unemployment, and bank lending rates less the GDP growth—in the region.

Now Ecuador is breaking new ground in finance: If all goes according to plan, in December it will become the first country in the world with a national digital currency, existing for the foreseeable future alongside the dollar. No bills, no coins, no ATMs, no losing money in the dryer—this money will exist only virtually, mainly on users’ cell phones.

The new currency will be significantly different from the M-Pesa mobile payment system, which has been hugely popular in East Africa and most places where it’s available. There, local citizens are storing local currency on their phones and moving it around electronically. The effect, according to economists at MIT and Georgetown who studied it, has been to increase users’ savings and reduce barriers to commerce by facilitating transactions. Users love M-Pesa, and it’s demonstrably making the poor less so: Those with accounts have higher savings rates than non-users, and report less savings lost.

Apparently seeking to hitch the new digital currency to M-Pesa’s wagon, Ecuador’s National Assembly cited increased participation and economic growth, in a statement, as reasons it OK’d the currency. But some economists said the government might have other motives.

While people will be able to exchange the new currency one-to-one for dollars, according to the government, the e-money will be issued by the Ecuadorean Central Bank. That may not seem like much of a difference compared to M-Pesa’s electronic storing of local currency, but the importance for Ecuador’s government is huge. Marc Weisbrot of the Center for Economic and Policy Research said that Ecuador’s exclusive use of the dollar “eliminates the ability to use the exchange rate as a tool of policy, and it severely restricts monetary policy as well.” That makes the government less flexible in its ability to manipulate the economy—which, Hanke said, was a good thing given the corruption, incompetence and political gamesmanship that existed in Ecuador in the 1990’s.

But if millions or billions of dollars’ worth of the new currency are circulating, the government can use it instead of U.S. dollars to pay its bills. And once the money is out there, the government can change the exchange rate against the dollar—the same kind of shenanigans that led to the chaos Ecuador was trying to escape when it adopted the dollar in 2000.

“The fear,” said Hanke, “is that [the new currency] will undermine the dollarized system—it will contaminate it and confuse things. The government might be able to force suppliers to take this stuff at par [with the dollar], but it'll sell on a secondary market at a big discount.” That would effectively lower its value against the dollar, wiping out some of the benefit to the users the government says it’s trying to help.

“My guess,” Hanke continued, “is it'll end up failing and cause a lot of chaos and trouble in a system that's doing well.”

He’ll need to keep such ideas to himself; in August Pres. Rafael Corea’s government passed a law making it a crime to "publish, broadcast or spread" any information it deems as having the potential to cause “economic panic.”

Ecuador: $11 Billion in external debt

Is this the Big One? Central Bankers from the World Over Warn of Impending ‘Perfect Storm’

Aug. 25, 2014 11:00am

John Horvat

John Horvat II is a scholar, researcher, educator, international speaker, and author.
His writings have appeared worldwide including in The Wall Street Journal as well as other publications and websites.
For more than two decades he has been researching and writing about the socio-economic crisis inside the United States that has culminated in the ground-breaking release of his new book Return to Order.

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SHARES

There is a major financial storm brewing on the horizon.

Such dramatic statements have long been the staple of naysayers for decades. Usually these warnings are dismissed by the financial establishment as the ravings of fringe analysts. Yes, crashes do happen, but the naysayers are never seen as prophets, but just opportunists who happened to be right much the way a broken clock is right twice a day.

But maybe this storm is different.

There are still plenty of naysayers weighing in on the major problems with the traction-less, hobbling “recovery.” However, they are now joined by important players in the financial establishment who fear something big might be coming down the line. Indeed, this one might prove to be the big one.

There is a major financial storm brewing on the horizon.

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The concerns come from the latest annual report issued by the Bank of International Settlements(BIS) that meets in Basel, Switzerland. The exclusive, invitation-only group is composed of bankers from all the world’s main central banks. If anyone knows what’s going on in the economy, it should be these bankers. And their findings are hardly guarded behind closed doors. If anyone wants to see the report, it is readily available to the public.

What these bankers now see are turbulent times ahead.

The language in the 2014 edition of the annual report is unusually direct with warnings that the world could be hurtling itself toward a new crisis. With a note of déjà vu, it claims the climate is now more fragile and volatile than the buildup to the Lehman Brothers crisis in 2007.

The same old signs are there. Not much has changed. Debt levels remain high everywhere, encouraged by low interest rates. Dangerous new asset bubbles are forming.

What makes this storm different is that it is not only the developed countries that are out of balance but emerging nations have joined the party. Debt ratios in the developed countries have now risen to as much as 275 percent of gross national product, while the emerging economies of China, Brazil, Turkey and others are gorging themselves on private credit booms of their own, increasing their debt ratio significantly.

If banks and government don’t pay attention to warnings, bank vaults might go empty and the entire world could face another economic disaster.  (AP Photo/The Grand Rapids Press, Chris Clark)

It would be wrong to put the blame on abstract economic indicators, financial instruments or debt ratios. The real blame falls upon the actual people engaged in the markets. So many players in the game have thrown caution to the wind and participate in what might rightfully be called the “frenetic intemperance” of the times.

Investors are ignoring the risks of monetary tightening and are engaged in the voracious hunt for yields. Assuming low interest rates, the constant search for higher returns is compelling investors to snap up ever more risky junk bonds and stocks. Equity markets have been termed “euphoric,” calling to mind the “irrational exuberance” of the Greenspan era.

Not only are investors operating at full throttle, but they are not taking the right measures to avoid collisions.

Banks should be raising more capital as a cushion against risk. Large firms should be looking for ways to add productive capacity but are buying back shares or engaging in mergers and acquisitions instead.

Of particular concern is China’s unbridled and frenzied credit growth over the last five years. Many fear that the state-controlled banking system lacks the flexibility to avoid a hard landing that will lead to a financial day of reckoning for China with worldwide repercussions.

Credit: AFP/Getty Images

“The temptation to postpone adjustment can prove irresistible, especially when times are good and financial booms sprinkle the fairy dust of illusory riches,” the BIS report warns. “The consequence is a growth model that relies too much on debt, both private and public, and which over time sows the seeds of its own demise.”

The message from the central bankers is that the world has forgotten the lessons of recent years. Unfortunately, those who forget the lessons of history are often condemned to repeat them.

Thus, there is a major financial storm brewing on the horizon.

This is the conclusion not of fringe economists, but of world-class bankers. The result may well be not just an ordinary storm but a perfect storm with all major indicators converging.

Indeed, this might be the big one.