How to Get $12 Billion of Gold to Venezuela
August 24th, 2011I think the more immediate and pressing matter will be: How to Get $12 Billion of Gold in the First Place.
Dear Leader Chavez doesn’t actually believe these banks actually kept all of Venezuela’s gold on hand, does he? He can’t be that stupid. So, I see this as a pretty cunning bit of economic warfare.
Did it force the crooked banks, who did who knows what with the alleged gold on their books, to stand on the bid in the spot market recently to come up with physical metal? I don’t know, but it wouldn’t surprise me if that’s what happened.
I’d say that there’s about a 99% chance that fake bars will be passed to Chavez, so the regime had better be ready for that. They might look to James Turk’s GoldMoney for some ideas on how to proceed. (Note: I have no association with GoldMoney at all.)
On a different note: See the part in bold below that reveals how infuriated the mainstream financial press is with people who insist on holding the physical metal. HAHA.
Via: Reuters:
Ever since the news broke last week that Hugo Chávez wanted to transport 211 tons of physical gold from Europe to Caracas, I’ve been wondering how on earth he possibly intends to do such a thing.
There are 99 tons already being held at the Bank of England; according to the FT, the plan is to transfer other gold to the Bank of England from custodians such as Barclays, HSBC, and Standard Chartered; then, once it’s all in one place, um, well, nobody has a clue what might happen. Here’s the best guess from the FT:
Venezuela would need to transport the gold in several trips, traders said, since the high value of gold means it would be impossible to insure a single aircraft carrying 211 tonnes. It could take about 40 shipments to move the gold back to Caracas, traders estimated.
“It’s going to be quite a task. Logistically, I’m not sure if the central bank realises the magnitude of the task ahead of them,” said one senior gold banker.
I put the ever-resourceful Nick Rizzo on the task, but he came up with little more: the market in physical gold is tiny, and largely comprised of nutcases. The last (and only) known case of this kind of quantity of gold being transported across state lines took place almost exactly 75 years ago, in 1936, when the government of Spain removed 560 tons of gold from Madrid to Moscow as the armies of Francisco Franco approached.
Research Credit: alvinroast
I see you highlighted the most telling line in the article. I didn’t realize until this week that I’m a nutcase.
I just went short gold for the first (and last) time for about 24 hours and while I made money it was very stressful. I’m sticking to “portable property” as Dickens called it.
My back of the napkin calculations show that this amount of gold at current dollar prices is about how much the US national debt will grow in about 72 hours.
oh man, Felix Salmon really shows his true colours in that one.
what a f**king turkey. clueless in the City.
I have noticed many comments on the interweb proclaiming the inevitable safety of Chaves’ gold due to the assumed insurance. People actually think that he merely wants the value of the gold in paper currency. HA! This is just might be one of the most exciting soap opera style stories that will come in 40 installments. Might even be sign of the times historical shizznit we’ll remember for a long time.