Commodities in Flux After US Captures Venezuela’s Maduro

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All right, John, thank you. While the Chinese foreign ministry is expressing concerns about the capture of Venezuela's Nicolas Maduro, and here's spokesman Lin Jiang, speaking through an interpreter earlier in Beijing. China expresses grave concern of the U.S. seizing Nicolas Maduro and his wife and taking them out of the country. The U.S. move is in clear violation of international law and the principles of the U.N. charter. China calls the U.S. to ensure personal safety of President Nicholas Maduro and his wife release them, stop toppling the government of Venezuela, and resolve issues through dialogue and negotiations. Spokesman Langeon says China is committed to deepening cooperation with Venezuela. Well, for his part, Karen, President Trump is warning other drug-producing nations in the Western Hemisphere that he won't long tolerate the flow of illegal substances into the U.S. Here he is again aboard Air Force One. We have a very sick neighbor. It's not a neighbor, but it's close to a neighbor. And that's Venezuela. It's very sick. Columbia is very sick to run by a sick man who likes making cocaine and selling it to the United States. And he's not going to be President Trump referred there to Colombian President Gustavo Petro, a frequent Trump critic who denounced the weekend raid. Nathan, the events in Venezuela have sparked new questions about America's stance toward Europe. Denmark's Prime Minister Metta Fredrickson is urging President Trump to stop threatening to annex Greenland. The comments come after President Trump again doubled down that he wants to take over the country. Right now, Greenland is covered with Russian. and Chinese ships all over the place. We need Greenland from the standpoint of national security. And Denmark is not going to be able to do it, I can tell you. And Greenland's elected leader, Jens Frederick Nielsen, posted on Facebook saying there's no reason for panic as Greenland's position is firmly anchored in international law. No, we're seeing immediate reaction to the developments in Venezuela across several markets, Karen. Spot gold has climbed above $4,400 an ounce. Right now it's at 4431, while silver is up nearly 5%. Well, surprising to some, Nathan, we are not seeing a dramatic move in the oil sector. In fact, right now, NYMEX crude oil is little changed at $57.29 a barrel. Steven Stepsinski leads Bloomberg's team covering energy. I think overall you just look at what is being produced out of Venezuela and they produce less than 1% of global supply. And so where they stand in the grand scheme of things, if you were to cut out their supply, it can be easily replaced. But also there's this look at, well, they have all these reserves. Can they add that supply as well? And there's expectations that they can't really add the supply very quickly either for a number of reasons. So the market has really shrugged this off. There's sort of been a wait and see situation.

And in a separate note, Bloomberg Steven Stapsinski says at a meeting yesterday, OPEG Plus, stuck with plans to pause supply increases in the first quarter. And Karen, U.S. airlines have begun rebuilding their Caribbean operations after the military incursion in Venezuela triggered airspace closures across the region. American Airlines and Delta are among those that have added extra flights and seats to accommodate displaced customers. Hundreds of flights were canceled over the weekend after the Federal Aviation Administration restricted parts. of Caribbean airspace. Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. Congress returns to Washington this week. The Senate returns today. The House comes back Tuesday. They will address government funding with a January 30th deadline to pass a bill or face another government shutdown. In addition, Congress must deal with health care now that health care tax credits under the Affordable Care Act expired last month. Millions of Americans are unable to afford health insurance without the sub- disease. Senate Minority Leader Chuck Schumer says Democrats are willing to work with Republicans on their plan to bring health care costs down, hinting that refusal to do so could impact the GOP in the mid-term elections. The Republicans have screwed this up to a fairly well if they can... find a way out of the mess. We want to work with anybody to lower the prices. Chuck Schumer spoke on ABCs this week, heard Sundays on Bloomberg. Republican Georgia Representative Marjorie Taylor Greene's resignation from Congress takes effect today. There are mixed reviews about her legacy. Larry Sabato is the director of the Center for Politics at the University of Virginia. I think it's always wrong to focus on the latest event involving a person and not look at the entirety, at least, of the public career. And her career, to say it's been checkered, is a compliment. Larry Sabato is with the University of Virginia. Meanwhile, local Republican Party chair, Jackie Harling says Green was a fighter who gave them a voice. Green's resignation will shrink the Republican majority in the House of Representatives. to six seats. Protests continue to grow in Iran over the weekend, as concerns sparked by the Islamic Republic's ailing economy puts new pressure on its regime to act.

Since international sanctions returned in September, Iran's currency is now in a free fall. More than 580 protesters have been arrested. Crews cleared mud from key California highways. Forecasters warned that more thunderstorms were on the way after downpours and high tides caused flooding, prompting road closures and rescues of people trapped in cars. Global news, 24 hours a day, and whenever you want it. With Bloomberg News now, I'm Michael Barr, and this is Bloomberg, Karen. Thanks, Michael. Time now for our Bloomberg Sports Update, and for that we bring in John Stash Hour. Thanks, Karen. The NFL regular season is over. The playoffs begin on Saturday. There were still two spots up for grabs yesterday. Carolina won the NFC South, despite losing its game Saturday at Tampa Bay. Atlanta's win over New Orleans created the three-way tie, and the Panthers won the tiebreaker. The Falcons after winning that game fired their coach, Rahim Morris. Last game of the season was last night in Pittsburgh, a back-and-forth fourth quarter. The Steelers on an Aaron Rogers touchdown pass with a minute to go, beat the Ravens 26 to 24, won the division. That's a Bloomberg sports update. Stay with us. More from Bloomberg Daybreak coming up after this. This week on leaders with me, Franci Lacka. I speak to tennis legend Rafa Nadal about how he stayed competitive despite injury. I was able to enjoy the victory. The victory is probably more than if I will not have this issue. One iconic match. In my mind was I am almost dead. And whether he misses playing. I don't miss tennis because there was nothing else to offer. Listen and watch Leaders with me, Francine Lacqua, on Bloomberg Television or wherever you get your podcasts.

Coast to coast on Bloomberg Radio, nationwide on SiriusXM, and around the world on Bloomberg.com and the Bloomberg business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. After an extraordinary weekend of airstrikes and the ouster of Nicolas Maduro, the world is watching for what comes next in Venezuela. President Trump says leadership in the country right now is clear. Don't ask me who's in charge because I'll give you an answer and it'll be very confident. What does that mean? It means we're in charge. That was President Trump aboard Air Force One last night. This morning we're joined by Terry Haynes, the founder of Pangea Policy. Sharp words, Terry, from the president, but it does leave a question, doesn't it, of what the U.S. in charge means in Venezuela. What does it mean? Good morning. Hi, good morning, Nathan. But bottom line is, I wish I knew, and that's no jab at the Trump administration, I think, but I think the policy here is a little more improvisational than a lot of people would like, particularly in markets. They are, I think, going to make this up as it goes along. If they can get... If they could get some sort of cooperation from the existing government, they might take that. I think that the existing government from Ms. Rodriguez on down is likely to be found wanting. You know, people forget that it's not just Maduro that's under indictment. people also forget that it's not as if uh... this is a some sort of conventional democratic country uh... in which uh... you know the succession will work and you know somehow they'll you know they'll manage to steer the ship slightly differently uh... the kind of change that uh... the united states now wants in venezuela not kind of change these people are poised to deliver i think Well, if it is the U.S. making it up as it goes along, Terry, what does that mean in terms of a potential U.S. military presence in Venezuela and this idea of U.S. oil companies coming in to rebuild Venezuela's vastly decimated oil infrastructure? Well, two things. One, I think that the... I think it is very unlikely that there will be some kind of major sustained boots on the ground presence in the United States, or from the United States to Venezuela. You know, might there be some sort of, you know, small, relatively small force that does specific things? That's entirely possible. I mean, but we have that all over the world in a variety of ways and a variety of guys. So I'd kind of look at that in the extreme. I think what the looked at very broadly, the...

The observations that what's going on in Venezuela, or what had been going on in Venezuela, for that matter, as part of the South America policy of the administration, is about oil or resources or something else. That's both true and too narrow focus. From the national security perspective of the Trump administration, you have to look at it holistically, meaning understanding what the situation is. pre-last weekend. Those competing or opposing the United States now have control of all those resources. So it is very important for this country, our government judges, that we have access to that as well. Taking your point about looking at it holistically, the administration has said it's about oil and it's about drug flows out of Venezuela as well. And the president just last night, aboard Air Force One, sent a warning to the president of Colombia, calling him a very sick man. What could potentially come next here, given those potential implications, Terry? Well, I think the... Yeah, I've been pointing out since the release of the National Security Strategy in November that what was in that document was called the Trump corollary to the Monroe Doctrine had in its sites basically reducing Chinese influence in South America. needs to be understood that China is today South America's largest trading partner and they seek to use that trade status to increase its geopolitical influence in South America. What that means, I think, for the overall region is that you have, whether it be in Cuba or Columbia or elsewhere, you know, the administration has now put those folks on notice that it is very interested in. uh... changing that behavior or having those governments fall frankly and uh... the president was very explicit about that in cuba but also thinks that uh... no united states action is necessary to bring that about i'd suggest uh... only there that uh... the cubans of have proved themselves to be far more tenacious uh... uh... you know surviving the loss of the soviet union now surviving the loss of venezuela uh... and uh... and you know we'll see if they can find another benefactor now Well, one of the big benefactors of Venezuela has been China, of course. I mean, we've seen the Chinese foreign ministry come out pretty strongly against the weekend events. I mean, what could this mean for the U.S.-China situation where they're trying to keep a trade truce intact? Well, they're trying, well, you know, the China statement, but I've had a lot of irony to it. Nothing beats the, nothing beats the Russian statement, of course, for irony. I'll let the listeners go look that up. But, you know, what that means fundamentally is, you know, the terms of the United States competition here has been that what we're trying to do as the United States government is.

you know really try to right size and push back against uh... china adventurism and uh... trying to influence uh... gathering in you know it's been many different continents and uh... the administration judges that it's going to start in uh... it's going to start in south america but uh... trump says day one has expressed interest uh... for for up to kind of clean up the United States defense in the Atlantic and the Pacific. And this is why Greenland is discussed, for example, it's not just because of the resources, but also because it's got, you know, it's right on the front lines, whether you look across to Europe or up through the Arctic, which increasingly is more important. But, you know, we've been pushing back at China. for a year now, whether it be kind of pushing back against its client state, Russia, and Ukraine, its interests in pushing Iran and its proxies in the Middle East, and also helping our ally Japan and others in the Philippines and others in the South China Sea. You mentioned Greenland. Do you think there's going to be a serious move by the U.S. on Greenland in the short to medium term now? Today, I look at this more as a means of the takeover talk of Trump's as pressuring Denmark to make some sort of a deal on Greenland. It also bears noting that, you know, gone back a few years, there was some interest in Greenland itself to separate or create a different political arrangement with Denmark. both of those strings are being twanged rather unsubtly. But I look at this as much the administration's view as much more interested in making some sort of oil minerals deal and all the rest. Again, going back to China, I think none of this, consider that none of this might have happened had not China kind of pulled the rare earth's string here, which is still unresolved and part of the unresolved U.S.-China trade tensions. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning, starting at 5 a.m. Wall Street Time on Bloomberg 1130 in New York, Bloomberg 991 in Washington, Bloomberg 929 in Boston, and nationwide on Sirius XM Channel 121. Plus listen coast to coast on the Bloomberg business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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