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Guest Post: What Will Become Of Chavez's Gold Hoard?
Authored by Peter Christian Hall, originally posted at Reuters,
In August 2011, while undergoing cancer treatments that ultimately failed him, Venezuela’s President Hugo Chávez began withdrawing 160 tons of gold from U.S., European and Canadian banks. “It’s coming to the place it never should have left. ... The vaults of the central bank of Venezuela, not the bank of London or the bank of the United States. It’s our gold,” he said on national television as crowds cheered armored trucks carrying an initial bullion shipment to the central bank.
While Chávez suggested the gold repatriation might forestall a Libya-style seizure of Venezuela’s assets by Western powers he had antagonized, IHS Global Insight analyst Diego Moya-Ocampos told Reuters it might stymie potential claims by foreign corporations seeking compensation for nationalizations they had endured. Central Bank of Venezuela President Nelson Merentes said it was “an act of financial prudence and sovereignty” intended to guard against problems in the international markets.
The shipments, conducted by air after much talk of alternate delivery modes, concluded five months later in a celebratory caravan. (Germany’s doing it, too: Berlin has ordered repatriation of 674 metric tons of gold, worth $34 billion, from Paris and New York.)
The Caracas hoard would today be valued at around $9 billion, were it not for the fact that Venezuela has been selling it — about $550 million worth in the first eight months of 2012, according to the International Monetary Fund. Did further sales follow over the past six months, with proceeds partly paying for the public largesse that helped fuel Chávez’s victorious up-from-the-sickbed presidential run?
Hint: Even with the additional cash from gold sales, Venezuela’s foreign exchange reserves hit a five-year low in September, three weeks before Chávez won a narrower-than-customary victory over Henrique Capriles, who will represent the opposition in a presidential election to be held on April 14.
Campaigning to hold the presidency for the Bolivarian Revolution will be Chávez’s designated successor, Nicolás Maduro, a former foreign minister, National Assembly speaker, union leader and bus driver who marched to free Chávez after the visionary army major’s attempted coup put him in jail for two years. A prominent target of Chávez’s rebellion in 1992 was Miraflores Palace, the executive office complex at which he later lived and where Maduro now works.
Several blocks east of Miraflores Palace on Caracas’s broad Avenida Urbaneta stands the 26-story Central Bank of Venezuela, whose vaults are said to contain what remains of the repatriated gold.
At 50, Maduro has much to worry about. In October, challenger Capriles won 44 percent of the ballots against Chávez, then behaved gracefully in defeat. Capriles will be supported by the elements that staged a nearly successful coup against Chávez in 2002, details of which are still disputed. At the time, the U.S. blamed Chávez for the uproar, and documents later surfaced to show that the George W. Bush administration anticipated Chávez’s ouster. (A remarkable and controversial movie, The Revolution Will Not Be Televised, aka Chávez: Inside the Coup, was shot by an Irish film crew that documented the ins and outs of Chávez’s dramatic comeback; it can be viewed via YouTube.)
As Venezuelans look ahead, they are well armed. Global Firepower, a website that assesses the world’s militaries, ranks the country No. 40 in strength, behind only much larger Brazil and Mexico among Latin American nations. On the ground, Venezuela endures a harrowing crime rate. With one-fourth of Mexico’s population — and no formal cartels waging wars — the nation reported 161 percent as many murders as Mexico did in 2011. Reported abductions for money increased twentyfold from 1999 to 2011 (though many kidnappings are resolved privately, leaving no statistics). After 45 years in Caracas, Norway closed its embassy in 2012, preferring to operate from Bogota.
No one seems to know how or why violence is so endemic. For all the complaints about falling oil production and capital flight, Venezuela’s quality of life improved at the third-fastest rate in the world during the second half of Chávez’s presidency. Income inequality fell markedly and citizens expressed considerable satisfaction with life there.
Still, the country suffers towering levels of venality. In 2012, Transparency International’s global corruption index (see its map) rated Venezuela Latin America’s most corrupt nation. It ranked as the ninth-most-corrupt country in the world, trailing Iraq in a four-way tie with Burundi, Chad and Haiti.
Thus, there is something less than $8.5 billion in untraceable gold bullion stashed in an extremely politicized city that’s simmering with grudges and dreams. Should strife erupt in Caracas, thousands would inevitably covet a plentiful supply of metal that’s as liquid as can be when it comes to transactions. Physical gold is modestly short of priceless to a criminal. What mala gente or dissident generals wouldn’t want some of Chávez’s rich legacy?
So far, Chávez’s unusual choice to keep so much of his country’s foreign reserves in gold has paid well: Paper profits from the steep rise in the metal’s price surely outweigh proceeds from his pre-election bullion sale. But his demise leaves a glowing bomb buried underneath a tense society. It will take leadership and luck to keep the benefits of Venezuela’s bullion flowing peacefully and productively.
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That and screaming in CAPS about religion. And, I'm w/Francis - out of the loop since this morning and missed out on what's been censored (?) Remember a couple times in the last couple months seeing comments "disappear" but not to an extreme extent and don't recall ever seeing it called out in the threads.
I, for one, find your tie and your predatory smile to be equally disturbing.
perhaps i shouldve kept a bag over my head................
JC was the completion and fulfillment of Judaism- upon the Rock that was Peter he built a new Church that still stands to this day and will outlast all dynasties and nations. Therefore he did not die a Jew.
nice revisionist history...he WAS A JEW AND DIED A JEW......HE BUILT NOTHING...and if you had a CLUE about what jesus stood for, you would see that he would be outraged that any organized religion filled with dogma and ego propped up around his name......................
@kito
~~~
I 100% agree with you on that comment...
~~~
Oh wait ~ Throughout all of this I forgot to say something very important...
POPE FRANCIS BITCHEZ!
Sincerely, FRANCIS Sawyer
did i mention that im a JOO for JESUS????
Krudlow is that you????
francis-you're taking Kito's balls and all tonight.
otto, he just recognizes that you are an ignorant bastard................
@otto
~~~
No ~ I'm going to say this... I think kito honestly tries to say what's on his mind... I think he speaks from HIS OWN INTELLECT [instead of some force-fed agenda]... I believe the same about YOU... &, for my part, my idea ARE MY OWN... [not some shi I ever read in a pamphlet]...
Jesus Herman Christ... That's what FIGHT CLUB is [& always has been] all about... At least I HOPE... Because that's why I'm here [BLEEDING IN THE BASEMENT INSTEAD OF DRINKING A BEER NEXT TO SOME IDIOT UPSTAIRS AT THE BAR]...
Herman!
keep praying to your golden calf kike. reread what I said-and don't tell me about having a clue what He stood for you whiny bitch.
otto otto, is stormfront getting stale for you?????? just remember that is was a jew who defended the kkk's right to march.............................
DEFINITELY NOT Krudlow......and BTW you get a +1 for that one
i also know that many communist jews were in power in the soviet union that sent 50 million to their death
Thanks Otto btw for being one of the few lonely voices
standing up against the mindless pope bashing.
Flash crash in silver just now:
http://www.pmbull.com/silver-price/
If you look at the 2-hour you can see where it happened 3 times and bounced right back up now.
Is this related to the CFTC thing? What gives here?
Sinclair said watch for things to get real volatile right around this time, and it is really starting to jocky around a lot.
It coincided with the EURUSD slipping below 1.3 again. Major risk off?
Very strange that there is zero reaction out of USDJPY, though.
Hmmmmmmmmm.
@ Orly,
You've got some things, maybe sometimes of questionable value but still worthwhile, to contribute here. Don't reinforce dipshit posters (like above) who don't have a clue about how the real world of markets work.
I am trying to find out how the real world of markets work. I am trying to get them to understand that even ZeroHedge could be so much better if they would tone it down...a lot.
If they did, maybe there would be posters who would be more forthcoming with how the real world of markets work and what happens in their little niche.
But now I am curious. What is of "questionable value"?
:D
@Orly
Re “questionable value”: well, from above your ‘Short EURUSD, long USDJPY’ might qualify there.
Re “……how the real world of markets work.”
You are going to find little-to-none posters who will clue you in to what goes on in the markets. For example, I scanned the post (but didn’t view the video) about Kyle Bass’s “AIG again” reality construct. (Before I finalized these comments I looked back and it wasn't my intent to glorify Kyle Bass). At ZH, you’re not going to find many people who have Bass’s perspective and who are willing to put it in print. Viewers at ZH literally don't understand what he is saying (e.g. jump risk). It is his perspective precisely that tells one how the real world of markets work.
Check out the post and see how many ZH responders denigrate Bass. They do it through, literally, ignorance. However, the reality is that Bass has capital (money) on the line and he makes decisions, sometimes profitable and sometimes at a loss, which impact that capital – and he, naively imo, vocalizes his reality construct. Most of his detractors, at least on this site, have no actual market experience. They are just armchair critics who have no idea of what constitues the investment risk/reward environment nor do they have any real profit/loss experience upon which to base their a-hole comments.
But if you take Bass literally, you will be wealthy.
Btw, I don't mean to invade your personal space, but surely your name tag isn't referring to Big Jon and Sparkie's "Little Orley", or is it?
Wait, you poo-poo the posters criticizing Bass, because Bass has his own money on the line and discusses his reasoning, and then throw orly under the bus for doing the same exact thing? Makes no sense.
No, no. It is short for Olexsandra. My little brother could only say Orly.
Well, see that is just what I am talking about and I get it all the time. Very often, I will throw things out there to see what sticks.
You may have an idea about 4X and I'll say this trade or that but you'll say, no, not that. But you don't say why. I guess I am not bothered to say why I thnk that way because the only one keeping score is me.
Euro is being held under 1.3 for the first time in a long time without a very hard push to get it back above. The USDJPY pair has acted in mirror image of EURUSD lately. Euro looks ready to roll over and USD will rise. Stealth trade is USDCHF long.
That's my logic. Where am I wrong?
@AllThatGlitters
Hi, Jerkoff,
Generally I’m not an ad hominen guy but in your case I make an exception.
I just tuned in ~11:19 EDT and read your asinine remarks about a “flash” crash in silver. As I run the numbers, May Comex at its low a few minutes ago, $28.565, was maybe down 1.2% from its NY Globex last sale at $28.90. That hardly constitues a “crash” of any sort, let alone a “flash crash” that typically will run a market down 50-90% of its absolute value.
Here’s a suggestion: why don’t you open a real-time actual account with an established broker. Then, after you have made a few trading decisions that are done in a real-timeframe (that lets you experience the uncertainty of how your decision is going to impact your account’s equity) and that ultimately result in actual profits or losses, maybe you can contribute something of value here.
Finally, why don't you stick with the current thread's subject instead of going off into your never-never land?
I too had a comment removed. I thought it was pretty mild to be honest, and ZH almost never censors anything (even some of the most bat shit stuff imaginable) so I took it a little personal. That said, this is not your typical website, and the Tylers have earned my respect for the work they do - so I let it go. I assume one of the Tylers is Catholic and wasn't in the mood to have his religion shit on - fair enough. I don't mind being respectful to my gracious ZH host but a little heads up would've been appreciated.
Ooooh, I know! How 'bout we're respectful of everyone?
Fight Club is not about who can get the loudest and come-back with the snarkiest put-down. It's about a battle of ideas.
FWIW Orly... THE WHOLE FUCKING WORLD [Throughout History of Mankind] is nothing more than a battle of ideas...
Considering ZH is the wild west - it does run pretty well. I don't like the most extreme voices, but I understand many of them are angry and frustrated (even if I don't agree with who they are angry at).
I wouldn't want to censor any of those voices though. I don't want to shove those folks into a dark corner of the internet - so they end up in an echo chamber only hearing other people who think the same way. If they are here, they are exposed to many different ideas - and may be better for the experience.
I've learned a thing or two...
@HD
~~~
That's the BEAUTY of it... When people are FREE to be uncensored... Then REALITY eventually shines...
Probably the BEST relationships that anyone of us will EVER have will be with our FAMILIES, WIVES, CHILDREN, PARENTS... Why?... Because ZERO of us have ever NOT had an argument or discrepancy [or many] with any of the aforementioned...
But the GRACE is when your own PATIENCE kicks in [as well as theirs]... You end up realizing that as a UNIT, you can withstand anything... & Jeez ~ if you had an ARMY of that, then probably most of the fondest things you dream of could come true...
So you're saying you'll speak to us like you speak to your mother? That would be nice.
:D
come on orly. did you not get the memo? his mother is dead:
http://www.zerohedge.com/news/2013-03-10/demographics-bitcoin#comment-33...
so pay some respect, will ya?
but on the other hand, she is aliiiiive. risen from dead:
http://www.zerohedge.com/news/2013-03-13/guest-post-what-will-become-cha...
see previous comment... & FWIW, I'll kinda be happy when you stop involving my FAMILY in this shit...
"You end up realizing that as a UNIT, you can withstand anything..."
Well said. Sums up how I feel about Mrs. HD... Life keeps throwing punches and we just keep getting stronger.
(backbenchers:)
Hear! Hear!
Nicely said.
Thanks. Appreciated.
whoa? zerohedge does censor stuff? i didn't know that. so what is it then? clergy is untouchable in fight club? i tought everything was touchable here.
Why?? - quite simple: you are but a guest in Tyles house - you follow Tyles rule or leave, its that simple
Same rule in MY house
would you have the same reaction regarding anti-yid & anti-muz comment ?
Same thing that happened to Gaddafi's gold. Vaporised, leased, swapped, and rehypothecated.
I spoke with Jim Willie last weekend, and he claims the Mali invasion is over their 50 ton/year gold production...50 ton/year works out to 350 tons over 7 years.
http://www.silverdoctors.com/jim-willie-france-us-liberating-mali-gold-t...
I see "france-us" in that URL. And I thought it was "Francis."
And why is Willie and the new Pope involved in "liberating" Mali's gold?
What gold??
"Several blocks east of Miraflores Palace on Caracas’s broad Avenida Urbaneta stands the 26-story Central Bank of Venezuela, whose vaults are said to contain what remains of the repatriated gold."
I understand that there is a long tunnel under the Central Bank of Venezuela to JP Morgans vaults.
Contrary to what people have said for thousands of years, Chavez took it with him.
There must be central bankers in the afterlife...
...burning in hell, with the fires stoked by fiat.
There is no hell, I oughta know, I run the place!
How can you run something that doesn't exist...? Oh, I see what you did there!
Up to your old tricks again, eh, Mr Evil?
I hear the Pearly Gates are made of that Barbaric Relic: Gold. Covered with pearls and precious stones. Not a fiat note in sight! So... bad for banking. ;-)
What? The barbarous relic has value?
What do you know. Must be why China, India, Germany, and U.S. Citizens want more of it.
To author Peter Christian Hall --
"No one seems to know how or why violence is so endemic" Well maybe, just maybe, violence is endemic because there is no rule of law in a country that has been nationalizing foreign investments that date back to, or before US Steel's huge capital investment in the 1950s.
'
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And how come it's going to take the FED 7 years to give the Gerries back their gold, when Chavez can get 1/4 of the amount the Krouts want back in 5 months?
•?•
V-V
Is it a coincidence that any national leader who threatens to end the fiat is soon dead? See the ME for recent examples, and now Chavez.
Gangsta bankstas rule. Central banks, previously known as Nazis, fascists. Now, with their cuddly name of socialist, collectivist, Common Purpose, EU, Democrat, Republican. They want to own everyone and everything. Gold and silver are their true enemy. That explains the manipulation and shorts...for the low paper price into their grubby physical hands.
I'm glad Kyle Bass stands firm. Maybe there should be a new expletive: Bass It!
JFK and RFK stood in the way of the Nazi-funded Bush crime family. Enough said...
...because ol' Joe (booze runner Nazi fan) Kennedy got in with the mob. Remember: the modern crypto-Nazi political elite, the mob, the Crown, the Vatican, and central gangsta bankstas employed in all major nations are one. All control freaks: for their few at the expense of the many.
The sin of the father was visited upon the sons.
History tells us so.
Long live the Republic. The Constitution and Bill of Rights are our best hope.
We remember our own, right or wrong. Ol' Joe was a conniving bastid, and his sons died because of that.
Yeah ~ that too... :-/
~~~
It's fucking complicated...
Dear Cecil:
What is the true source of the wealth of the Kennedy family of Hyannis, Massachusetts? I have heard several stories about Joe Senior having made a killing in Prohibition rum, sleazy stock market practices, or the Boston construction industry. I heard the other day that he made the seed money for all this by selling opium to China, and that takes the cake. Also, what is the Kennedy money doing today? Besides the Democratic party, is there a family business? Do they have a foundation or something? Why don't I see the Kennedy Trust as a sponsor of quality public television?
— Peter Greenberg, Jackson Heights, New York
Cecil replies:
Cecil doesn't ordinarily go in for this People magazine stuff, but Lord knows I like dishing the dirt as much as the next guy, and Joe Kennedy is a target the size of all outdoors.
J.P. was what we call an operator. He made his money by (1) pulling various hustles before it had occurred to anyone to make them illegal, and (2) possibly pulling other hustles that were definitely illegal but generally winked at. His stock-market shenanigans were an example of the former, his Prohibition liquor business (never proven, by the way) an example of the latter. That said, let's not get ridiculous. He didn't sell opium to the Chinese; the British did. Nineteenth century. Very famous. Trust me.
Joseph P. Kennedy was the ambitious son of a prosperous Boston saloon keeper and ward boss. He married the mayor's daughter, went to Harvard, and generally made the most of his ample connections and talent. He ran a bank (admittedly two-bit) at 25, and was number-two man at a shipyard with more than 2,000 workers during World War I. At 30 he became a stockbroker and made a fortune through insider trading and stock manipulation. He was a master of the stock pool, a then-legal stunt in which a few traders conspired to inflate a stock's price, selling out just before the bubble burst.
Kennedy may also have traded in illegal booze, although the evidence is circumstantial. His father had been in the liquor business before Prohibition, and Joe himself got into it (publicly, that is) immediately after repeal. Some believe the family business simply went underground during the dry years. He may have been strictly a nickle-and-dimer; Harvard classmates say he supplied the illicit booze for alumni events.
But there might have been more to it than that. In 1973 mob boss Frank Costello said he and Kennedy had been bootlegging partners. Other underworld figures have also claimed Joe was in pretty deep. At least one writer (Davis, 1984) thinks bootlegging enabled Joe to earn his initial financial stake, but that's hard to believe; he had plenty of chances to make money more or less legally.
Whatever the truth of the matter, Kennedy's real strength wasn't his alleged criminal ties but his business smarts, notably an exquisite sense of timing. In the mid-1920s he became a movie mogul (taking time out for a celebrated dalliance with Gloria Swanson), then organized a merger and sold out just when the industry was consolidating, clearing five to six million dollars all told. He pulled out of stocks early in 1929 and sold short following the crash, actually making money while others got creamed. Just before Prohibition was repealed he lined up several lucrative liquor-importing deals.
By the 1930s Kennedy was rich, but he didn't make serious money by modern standards until he got into real estate in a big way during World War II, raking in an estimated $100 million. In 1945 he made the deal that remains the centerpiece of the Kennedy fortune: for a measly $12.5 million he bought the Merchandise Mart in Chicago, a huge wholesale emporium that had cost $30 million to build. Within a few years the annual gross in rent exceeded the purchase price. In 1957 Fortune declared Kennedy one of the richest men in America, with assets of 200 to 400 million bucks.
http://www.straightdope.com/columns/read/716/what-is-the-true-source-of-the-kennedy-familys-wealth
What will happen to Venezuela's gold hoard?
Exactly the same thing that happened to America's gold hoard.
(P.S. It ain't at Fort Knox.)
What happened to Venezuela's gold hoard?
i bought some of it
1600. or less
Ok,i am agnostik.I dont believe in god.But i believe in family,frendship,to be honest,hardworking as all of you.I dont like my labor to be confiscated from banksters.Zero Hedge is one of the last resorts for me.Please,fellas,lets keep this last bastion for us.Dont let MF''ers ruin it.Divide and conquer.I am proud to be between such a smart guys and gals here.Religion is used to divide people,dont let it happend.
www.youtube.com/watch?v=dVUU3p5iHMA
just fucking be happy WE are NOT in China!
Notice to any Z/H pantywaists: If you can't hang with the big dogs, then stay under the porch!
And Yen Cross drops the hammer!
I have always liked your comments YC, always something new.
It will stay shiney and store value.
Venezuela's wealth is black gold ,but that can not be surreptitiously moved out of the country so bringing the real gold back into the country makes sense if you want to loot the treasury and not leave a trail. Skimming a few million at a time takes so long and if you have terminal cancer your time frame is short. Billions can be moved with diplomatic shielding, they do not need to go the tungsten route, nobody even gets to peek in the vault, His daughters will be much sought after.
Well I guess the gold will be the payment for the military system and buereaucrats. I do not believe a second that Dicatatorship will end with Chavez death. And so the Bolivar won't do any good for buying things. And you know the systems people care for but one thing. Their well-being. See the long gone GDR see the "communists" party in China. Look whereever you like the keepers of the system just keep the system to get them running.
You can bet your life right now anyone in "position" is getting while the getting is good....lots of bonuses being paid to themselves and raiding of the kitchen cuboards....and yes the daughters are very rich right now....and they read EVITA....and can probably sing too
I wonder why he didn't try a cannabis treatment?
http://classicalvalues.com/2013/02/cbd-science-hplc-analysis/
http://classicalvalues.com/2013/03/endocannabinoids-the-science/
Gold?
What Gold?
I heard Germany just got a shipment.
Remember folks, nobody is making you read this stuff. If you want "child proof" commentary, the MSM has it for you.
Back to the topic of Venezuela's gold:
Venezuela can now call in Geoffrey Bell. Or more correctly Geoffrey Bell can now call in Venezuela.
Geoffrey G30 sugar daddy, and 'yes sir' to Richardson. Groomed at Schroders and the ear of the Venezuelan CB.
"Hi it's Geoffrey, listen, I have a spendid plan for your gold. I'll swing by next week for a chat".
http://en.wikipedia.org/wiki/Geoffrey_Bell
VENEZUELA'S GOLD HAS BEEN QUIETLY MOVED TO CHINA - TO THE PBOC - IN A SECRET DEAL.
SPECULATE AS YOU WILL - THE IMF PROPOGANDA CANNOT BE TRUSTED.
Hugo was a classic shitbag communist. He stole money from the country his entire political career. It is too bad that the country mourns his death. He should have been placed face down in an open coffin and burned in the town square for being a common thief!!
They all do in the banana republics. You can set your watch to that. Doesn't matter what the political leanings are.
Unless I am missing something when your a Socialist like Chavez the FED doesn't take 7 years to deliver your gold?
Physical gold is modestly short of priceless to a criminal.
Is that why central bankers buy it? ...after printing up their counterfeit loot, naturally. Guess I answered my own question.
Wonder what happened to Gaddafi's gold now that the NATO backed al CIA-doh! thugs got it? A more interesting question.
A lot of first time commentors on this thread. Their basic thesis? <Whine> Why can't ZH be like all the other, nice sites? <Whine>
You aren't regulars. This isn't your site in any sense of the word. I've seen too many "free" sites disappear or get "controllers", because these sites make the "collective" uncomfortable. I don't care about your discomfort. Your threat is to leave? The door is right over there. Your presence here is counter-productive. Go to a site that will validate your feelings, you poor dears.
There are only a billion of them.