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Venezuela Begins Liquidating Its Gold
Yesterday we reported that in retaliation to the latest Obama executive order which declared Venezuela a national security threat and ordered sanctions against seven officials, Maduro promptly took advantage of this "outside threat" to rally his toilet paper-starved population "around the flag", and while pointing at the "evil imperialist" Obama, granted himself even greater authoritarian powers: "I have put together a special law that gives me special powers to preserve the peace, the integrity and the sovereignty of the country before any situation that presents itself due to this imperialist aggression."
Bloomberg further quoted Maduro as saying that the "special decree powers will help defend Venezuela democracy, freedoms", that "the U.S. using human rights issues to justify invasion of Venezuela, planning trade blockade", and that Maduro will "lead a special defensive military exercise on March 14." Because nothing screams democracy like going "peak dictator" and launching a military exercise.
Venezuela's always entertaining leader aside, Venezuela's political problems have their basis in, and will only get worse due to one simple thing: money, or the lack thereof.
As a reminder, the nation whose primary - and only according to some - export is oil, has been slammed in recent months due to tumbling oil prices, which means oil is now a loss-maker for Caracas, whose oil breakeven price is said to be far higher than where Brent is currently trading. Which is why Maduro's political troubles seem to be multiplying in recent months: in fact it has gotten so bad that some press reports suggest Maduro's grip on the military is starting to wane.
Which likely explains why in an attempt to secure some stability, i.e., funds, now that Venezuela is no longer able to tap Chinese bailout loans as last-recourse funding, Reuters reported that Venezuela's central bank is in talks with Wall Street banks to create a gold swap that would allow it to monetize some $1.5 billion of the metal held as international reserves, according to government sources familiar with the operation.
Under the swap, the central bank would provide 1.4 million troy ounces in exchange for cash, said a central bank source. After four years, it would have right of first refusal to buy the gold back, added the source, who asked not to be identified.
Of course, by then Maduro will almost certainly no longer be the ruler, so the "gold buying back part" will be someone else's problem, and what is actually happening is that Maduro is "pawning" some 1.4 million ounces of gold to a banker syndicate, one organized by Bank of America and Credit Suisse according to Reuters, in exchange for $1.5 billion.
It also explains why there is an implied 7% discount to market prices in the swap, since 1.4 million ounces equivalent to $1.5 billion translates to about $1,070 per ounce, or a 7% discount to market.
Or said otherwise, a liquidation.
The banks and Venezuela's central bank did not immediately respond to requests for comment.
"Work is being done to complete this operation toward the end of April," said another source, linked to Venezuela's finance ministry.
Venezuela would have to pay interest on the funds but the central bank would most likely be able to maintain the gold as part of its foreign currency reserves.
As a further reminder, most of Venezuela's reserves are held in gold after late socialist leader Hugo Chavez began moving central bank assets away from the dollar in the wake of the 2008 global financial crisis. "The central bank in late 2013 received proposals to carry out a similar operation, the bank's chief said at the time, but denied any agreements had been completed."
And now, Venezuela is selling its gold, which at least in the global central bank arena, appears to be a far more liquid asset that "tradition" and is instead perfectly legitimate legal tender.
Finally, now that Maduro has tipped his hand how he plans on funding the country's near term debt and cash obligations, this is just the beginning: his administration faces a cash crunch following the maturity of a 1 billion euro bond this month and coupon payments of nearly $700 million in April. Expect Venezuela's gold liquidation to accelerate. The only question is who will end up the rightful owner of Venezuela's physical gold once the pawn shop confiscates the collateral.
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Yeah, that's a sustainable solution.
/s
hopefully after they run out of gold they will start selling pussy. venezuela girls are hot
They already do....lol
look at the inca and aztec cultures. they had no banking systems and prospered big time. why does venezuala need to borrow money from other countries? because she is not self sufficient. teach the people how to fend for themselves, provide the materials and currency and tell the bankers to fuck off.
What a load of crap you're pushing JB whatever. They are under a confiscatory tyrannic regime. These are not brown children to be directed. These are proud people who tamed some of the most rugged and unforgiving terrain the world offers. Are you a troll?
i love being in a battle of wits and my opponent is unarmed...
No nation on Earth is self-sufficient, but I would beg you to find another nation on Earth that has the same per capita energy, raw material, and human need (clean water, sunshine, climate stability) as Venezuela. this is precisely why the worst of the worst vie to ascend to power there, not because the people are no less vigilant of their own prosperity, and nothing to do with the "self-suffiency "of a people. America is as bad a socialist nation if not worse - my country, mind you.
With Venezuela's 1.4 million oz of gold, over 100 million oz of spot positions can be sold on the LBMA.
Socialism. Undtil stupidity runs its course. Then back to being a Wall St. whore
I call bullshit. They also said Russia was selling its gold and turns out they were buying. Same bs tactic by the US, put santions on them and then say they are selling their gold.
Added benefit of the fall in oil prices...gold liquidation.
http://www.debtcrash.report/
I feel really sorry for the average Venezuelan Joe. Been there and there's some really good people. Too bad they keep getting hooked up with such loss-leaders.
note to self, never do what Venezuela does.
Got to wonder why they don't sell it to China, or Russia, for maybe 7% more.
Or as someone said above, sell it 100 times over on the the paper gold market.
I also have to wonder who will actually have possession of the gold? Will it be safely stored in Venezuela? Or Tel Aviv West/New York?
And finally, it seems it didn't take long to get the gold back that Chavez repatriated.
Right on queue, accordng to the plan.
The plane takes off loaded with gold, flight plan NY but it never arrives.
Actual destination Frankfurt? Shanghi?
We will never know.
Crash in the Indian ocean, suspiciously close to Diego Garcia.
.
yep, just like fractional reserve banking. they'll use to to create more paper than they have physical to back up...and can further manipulate the price to their advantage. This is 43 tons. Surprized the Chinese didn't outbid.
one day, a powerful player will have enough gold and want it to reflect its worth. then the game is over.
They can't make ends meet with all of the oil being pumped?
Like the US can?
Excuse me.... Facts have no place in this discussion.
Sorry - I'm a little sarc-impaired this morning.
US doesn't want to tap into it's oil, it can use someone elses...
It is ironic that another Socialist Utopia is crashing and being forced to run to Capitalist bankers for help.
No such thing as a capitalist banker. Capitalism is the very definition of self-financed prosperity. We don't have that now.
I am surprised that banks even accept such archaic colateral for a loan... (sarc)
How great does this work out for the banks involved. They get to trade 1.5 billion is created-out-of-thin-air dollars that they can borrow for free or conjure up from nothing and get over a million ounces of gold at 7% BELOW SPOT PRICE. At 100/1 paper to physical this will give them a lot more shorting ammo on the futures market.
If one didn't know any better..., you could almost say it was planned.
everyone turns in real money for playing chips when they go to the casino.
Amen.
If I had any faith in Venezuella REal Estate laws I would go down there tomorrow and buy some nice beech front property. I could pay for it by selling toilet paper and shampoo.
Yeah, and the regime would give you title to it, and and youd be good. The government there holds private property sacred.
@jbvtme The Inca's & Aztec's were blood thirsty savages. They weren't a bunch of socialist hippies running around in the woods. Certainly not worth promoting as a standard. The gods they worshiped demanded copious amounts of human blood. Ripping out the hearts of those sacrificed, throwing it in the face of their idol before rolling the bodies down their stone temples (pyramids). Even in more northern native American cultures we find mass human sacrifices. Notably, recently, in southern Illinois within the mounds built there. Monks mound in particular is a giant earthen pyramid, absolutely massive in scale where mass graves were discovered containing sacrificed victims. http://westerndigs.org/infamous-mass-grave-of-young-women-in-ancient-cit...
"teach the people how to fend for themselves, provide the materials and currency and tell the bankers to fuck off"
There is not a more sure fire way to bring international war upon your land, than doing what you just suggested.
Did Secret Service go to Venezuela or Columbia?
US has been trying to control Venezuela for some time. Looks like its working. One of the few countries left without a Rothschilds Central bank. Obama recently declared them "a Threat to National Security" and Seeks Regime Change. Now they're being forced to sell their gold when its at a low price. Coincidence?
http://www.globalresearch.ca/president-obama-declares-venezuela-a-threat...
too bad they didn't crowd liquidate...I'd like some of that -7% gold action
....oh and the pussy
Especially if the latter was at a discunt. Sorry, meant "discount".
Check the bars for Tungsten.
Long tungsten bars and 1 gallon cans of Home Depot shiny gold paint.
Hot yes..but from a place that has limited toilet paper?...
;)
Just soak em til the berries come off.
real pussy or pussy receivables?
Knowing these guys, it's paper pussy.
A Jew advocating for slavery and the sex trade, what a surprise.
you'd think somebody in DC would jus come p with the bright idea to make them the 51st state and get it all over with
they are going to sell it to Lloyd's of Goldman....who we will be surprised to learn corners the Gold Market in the not so distance future....because who would want to own Gold when every money printer in the world is running full tilt!
Now we know where those famous armored truck robbers from NC went to.
their gold was ALWAYS the target
Yesl, that is exactly what the psychopaths in western banking and their government lackeys wanted all along.
Absolutely, and this is how they will get EVERYONE'S gold....force everyone to liquidate in order to pay taxes and/or raise money to pay off loans. These guys know they'll never have to send goons door to door to confiscate...they're way too sophisticated as thieves to need to use crude measures like that.
Why couldn't V make the same deal with Chinese banks?
Why does it have to be Wall St banks?
Isn't this some of the gold held as 'reserves' at the bank? They didn't repatriate all of their gold, so why not sell this 'fake' gold back and get cash? Am I missing something here? Does anyone have the actuals on what Venezuela did those years back with the actual physical returns plus what was left in custody as reserves?
I liquidated some vermicelli with meatsauce after a big cup of coffee this morning!
Isn't meatsauce a little heavy for vermicelli ? ;-)
with a side of croton oil?
post it to facebook
Pics or it didn't happen.
Chavez is spinning in his grave. It's always about oil or gold, always.
It's always about power and control. Gold and oil just happen to be really good tools to achieve the goal.
And therein lies the rub for precious metals.. emerging market central banks are liable to liquidate their reserves increasingly as they come under pressure from creditors and scramble for cash.
The strengthening USD is blowing up their USD denominated debt obligations while (low) commodity prices are cutting deep into their govt. tax revenues.
This will be the last leg down.
+1 "The strengthening USD is blowing up their USD denominated debt obligations while (low) commodity prices are cutting deep into their govt. tax revenues. "
feel the mighty tides of the Global Reserve Currency. of course, those tides are stronger at the edges of the dollarzone, i.e. Emerging Markets
(the last leg down? evidence for this?)
No evidence, but this last leg down will be through the coming debt crisis. After that I am in agreement with Armstrong that capital and wealth is going to be hunted all over the world to fund bankrupt governance structures.
That will be a bullish signal for any assets which are potentially mobile, tangible, durable, not subject to counterparty risk, and are "off the grid". Very few commodities, or indeed financial instruments, have the characteristics of precious metals.
I think we might see a Bitcoin rally soon as risk aversion seeks safe-havens, but (again) in my opinion, this is going to bring cryptocurrencies into direct confrontation with the existing power structure. Unlike '11-'13 where crypto was a "quaint" idea to government and could be taxed, this time it will be a deer in the headlights.
Also: would add, I have really disliked gold ever since I started researching PMs in '11. I have a little (because it doesn't make sense to not own any) but I do like silver. I like silver a lot. I am sure that I could potentially be persuaded to like gold over silver again at some point in the future, but it won't be any time soon.
I'm not in disagreement, but I note this "No evidence, but this last leg down will be through the coming debt crisis "... faith-like part in your discourse?
I simply doubt we'll see one last leg down, and I can't follow this "millenialist" logic. too much time spent digging archeological artefacts, I guess, to see TEOTW_As_We_Know_It without putting it in historical context. And the global context is that only a fraction of a fraction of humanity has those thoughts
in other terms, The Great British Empire is no more, and yet Blighty is still... attractive. The Soviet Union broke up, and we are still at it's aftermath
perhaps your comment is the wrong one to attach those remarks, no direct implications meant. to have some gold is wiser then to have... none
I am in agreement that the only thing that you can be certain about is complete uncertainty. Of course, we might see gold go to zero, effectively.
However, risk is ever present and will not wait for people. Time keeps going. Yes, looking back through history at events we have the benefit of hindsight, we can run analysis upon them, we can tease out causal effects from data and from reports.
There is a world of opportunity out there, but if you wait for the events to occur, the opportunity is lost, even if the causation can be assigned. So yes, faith on my behalf. Faith in over 20 years of accumulated knowledge, scientific reasoning and education.
Could I be wrong? Absolutely. Am I certain in what I say? No. Only a fool would boldly proclaim an opinion without anticipating the possibility of being incorrect.
But I am also aware, based on the indecision exhibited by the previous generation of my family, that rising risk, inflation and volatility will destroy wealth. That much is absolutely certain. So yes, post Financial crisis events have forced me to seek out opportunity and I do not have the luxury of waiting for the events to happen so I can (scientifically) gather data and prove/disprove a hypothesis.
Edit: Should people believe what I say? No. I invite them to do their own research, to formulate their own hypotheses, to trade their assets (or not trade their assets) in ways they are personally confident in. I invite criticism. God forbid someone lost their shirt because of something I posted here.
Boys, boys..., it's way too early to follow such seriousness, still only on my second cup of coffee. However, these back and forths are the reason I was attracked to ZH in the beginning. Good to see intelligence coming back in vogue.
Amen. Next, A Message To The Young From Uncle Ghordius: whatever you do, don't expect gold to get you out of debt. Specifically, get out of debt first, and then accumulate some gold. I know, it sounds... antidiluvian, antiquated, archaic. Perhaps it is, and perhaps I am wrong, too. But I don't think so. Contemplate creative ways of getting out of debt, there are some
Venezuela voted to loot its foreign business partners then itself, seizing property directly or by dictating price and that sort of thing. Its voters were driven by the deadly sin of envy. In that environment you want to look like a victim too, while continuing to live reasonably well. You will be a criminal, trading on the black markets. Criminals big problems is engaging trade without protection from theft by trading partners and third parties and of course the government itself. Silver coins(or hard currency) meted out slowly, to make ends meet, ostensibly earned mostly from other trade or labor, could make thing easier without presenting you as a target. Probably hard to imagine in Germany, but ask some of your more Latin minded european brothers and you'd find it ls in the cultural DNA, how to live under a thieving regime.
Given the prospect of quite significant deflation around the corner, I do not think that is bad advice at all. Also, notice the downvotes on your comment, and my own.
The minute someone takes contrarian position, even if only saying that the market could fall in an asset people hold (like gold), the cognitive dissonance kicks in and the downvoters come out in force.
For the gold bugs downvoting above, I challenge you to ask yourselves "what if". What if my asset positions declined 30% in value? What if I lost my income stream? What if capital controls were placed upon my bank? Could I stay liquid? It's really for your own benefits, you MUST consider potential downside risk.
The point of holding PMs is that there IS NO COUNTERPARTY RISK. I denominate my metals in ounces, not fiat. Besides, I went all in at $700, so I'm good. And yes, the prices will continue to be manipulated until they're not. Last week I predicted a smackdown:
http://www.zerohedge.com/news/2015-03-05/goldman-warns-snow-may-leads-lo...
Today I say Au will close this week below $1100.
And as for confiscation:
http://www.zerohedge.com/news/2015-03-05/gold-prices-and-real-interest-r...
"I denominate my metals in ounces, not fiat."
Great. But if, for some reason, you were forced to sell the metal, you would be denominating your metal in another commodity (if bartering), or fiat (if selling.)
I agree in principle that PMs are a store of value, and a (relatively) liquid physical asset, but they are NOT liquidity. If you are taking all of your cash out of the bank and buying physical gold every month, and stashing it under your mattress, this is stupid. Liquidity provision is important.
There are two parties in a trade. If you are FORCED to part with your gold, for whatever reason, you are forced to price it in other terms than ounces.
Here are a few reasons why you cannot rely exclusively on gold as a panacea in a financial collapse:
- You might have rising rent to pay.
- You might have rising taxes to pay.
- You might have rising food costs to pay for.
- You might have increasing interest payments (adjustable rate debt) which you need to cover if interest rates rise.
You see? Liquidity provision. It is important and no amount of gold tonnes will help if you have cash-flow issues in the short term. Also, if you are forced to part with assets (which gold is, incidentally), it will probably be on unfavorable terms, so you will likely also take a cut what you could obtain for it.
What's your point? If I need "liquidity" I can go back to the LCS and sell. No biggie.
And when, as Voltaire wisely wrote, the fiat du jour "returns to its intrinsic value - zero," PM holders will have the only money in town (I live in a small city in Flyover Country USA, surrounded by food and water.)
Note that I carry no debt and own other hard assets besides metals, like 10 months of food and provisions.
Good luck!
Sounds like you're sorted. I'm a little envious.
If Bitcoin comes big into the picture, they will attack it physically through cybersecurity campaigns. Then say it isn't safe through media and call it cyber warfare, blame it on Russia or North Korea. The scare will be great and it will plunge down the shitter.
Blythe will also attack it via Wall St., creating even more volatility until such a time as they will de facto control it's value.
Bet on it.
I nailed the Bitcoin collapse at end '13 to the week. I profited when that guy was spamming ZH about Bitcoin last year (edit: fonestar/gh0atrider?). There was a little blip around this time last year where it hit $600, and I called the breakout to the downside again (to the day). I was watching people on various exchanges proclaiming that Bitcoin was going to hit $1000, $2000 etc. again.
This was not the only crypto market collectively that was making such silly proclamations. Litecoin traders were also making even more outlandish proclamations, with anticipated rises in rate of value that would have made the '13 mania look like a walk in the park.
I was one of the few solitary voices on said exchanges (like BTC-E) stating that people were probably going to be disappointed (much like Ghordius above, it can be lonely being a contrarian.) Sure enough BTC dropped from $600 to ~$170 recently and then rallied a bit higher into this month. LTC dropped even more sharply as I recall.
Anyway, enough on market history.. a lot of banks have been acquiring crypto exchanges and charging crypto commissions, likely to hedge against risk by accumulating some crypto positions. It isn't unlikely that if the banks came under pressure from governments to dump these positions, they would. Or again, if they were strapped for liquidity, the same thing could occur.
I would also point out that seizure of crypto assets (and public auction) by various government agencies in the US is also pretty common.
Then you also have the exchanges themselves, which are fraught with risk. Mintpal was fraudulent. Mt. Gox was fraudulent. I am sure there are may be other crypto exchanges which have acted in a fraudulent manner. That is undermining confidence in the space itself. It makes institutional investment within the "asset" very difficult.
Furthermore, there is an expanding "crypto" base at the bottom, as cryptocurrency needs to be open-source by its very nature. Open source means more and more cryptocurrency variants can be piled into. That means there is an ever-expanding supply at the bottom (if you sum all crypto in circulation.)
There are all sorts of ways that cryptocurrencies could come under assault and I think the people who are really holding out for a rally like '13 will be sorely disappointed. Having said that, I do believe that BTC will rise moving further into this year though. I've stated as much to some people I know. Some of whom are still holding their coins and hoping for a rally so they can turn a profit.
Also, the fact that people are still holding out for a new rally also assures me that the next rally (if it comes) will be far less of a mania. There will be downside pressure as the price rises on the way up as people try to get out of their positions.
That's a lot of speculation in one post.
I'm not sure how you called all those price movements and didn't become a millionaire in the process, but that's on you I guess.
Still, you're too focused on the negative. Fraudulent companies just fade away, the system gets stronger.
It might be hard to grasp for some people but the decentralized and antifragile nature of bitcoin will make it quite difficult to attack or even harm the system.
The media campaigning is already happening for months now but that's just delaying the inevitable. It's way too late now, the great minds are already working on the future instead of trying to forcefully maintain a broken system, and they will be greatly rewarded.
Ofc also long gold & silver (Venezuela probably being forced to sell at the bottom, poor fucks)
I was not trading in bitcoin. I probably should have been shorting. I bought BTC on Feb 13th though. $235.79 then, currently $290.51. Will continue to hold for a few months, but I am not in a large position.
I just cannot bring myself to believe that BTC is safe long-run. I already have been getting jittery in this position.
Nailed it stig...been telling the gold bug idiots this since the gold bull run poooped out in 2011.
MAJOR BULL RUNS ALWAYS HAVE MAJOR CORRECTIONS!
GOLD IS NOT DIFFERENT!
keep buying Dumbasses; the struggling nations of the world need buyers as they dump 100's of billions in gold to TRY and stay alive.
So i can get a piece of the $100's of billions of a real asset or i can get a piece of the $1000 trillion in paper derivitives. Easy choice.
Duh! Sure gold is better...but if your average price is $1200 and the price falls to $500 you're fucked royally...and if the shit hits the fan, I mean really hits the fan...they'll outlaw the ownership of gold, ban it use for payments, and brand you as a fucken criminal...that's if the starving mobs haven't drowned you in your bunker and stole your gold by then.
There's also the Precedent OF GOVERNMENT SETTING THE PRICE OF GOLD!...for something like 130 years of recent history, the PRICE OF GOLD WAS SET AT $50 an ounce...WHATCHA GONNA DO IF THAT HAPPENS?
He who owns the gold will eventually set the price. That would be China, Russia, India mostly. You think they'll set it at $50.. or $5000.
Wrong.
Marketplaces discover prices.
If you have a chunk of gold and an empty stomach, the guys growing the food may offer an exchange of some of their excess production for some of your gold. He with the highest excess production, may be most able and likely to take the lowest exchange for the metal. The guy with the most gold - or the hungriest guy with gold, may be most likely to give up more of the metal for the food.
The guys with gold can SET any arbitrary number they want. It is meaningless. The real value of a thing is determined when someone else wants it.
In any case I better buy somemore of the damn things... I love fishing ;-)
BS ! BIG time bs !
Gold is on the way to $500 and Silver to $5bucks, maybe in 20 years time it will restart a new bull run.
Folks will not allow PMs to take off ever again untill blood in the street, even then perhaps...
If you own it, use it as a fishing weight...
"WHATCHA GONNA DO IF THAT HAPPENS"....hmmm back up the truck?
even if gold price drops to $500 from $1200, that's still better than paper 'money' that was worth $1200 dropping to $12..or maybe $1.20.
Drugs are illegal including MJ in many states and Federal.
By your reasoning, black markets don't exist. To even call it reasoning is more than a stretch.
Hot news flash: People don't much give a shit if something is illegal if they want to use it and substituting ALL CAPS for logic doesn't make an argument more creditable.
Any 17 y.o. kid buying beer on a Friday night will tell you that.
Five years ago or so a ballpark estimate for the derivatives market that was widely circulated was $1.5 quadrillion. That having shrunk by 1/3 seems incredulous. Still, I haven't seen any new guesstimatez...
You haven't seen the MAJOR bull run yet. Thus far has merely been the early adopter run/correction. Many people have understood that gold is likely to experience the exact same deflationary pressures that ALL commodities/safe-havens would see as players try to stay one step ahead of collapse by liquidating assets. This is the nature of the game those players are in.
The serious "gold-bug idiot" that you so ignorantly refer to, understands that they are not chasing income. These "dumbasses" understand that you will be standing destitute, with your dick in one hand and a tin cup in the other, once the dust settles. They understand that they haven't made $500 on the metal they bought @ $600/oz, any more than they have lost $500 on the metal they bought @$1600/oz. They understand that they have safely taken their labor from yetserday, and stored it away for tomorrow, better and safer than any IRA, 401k, savings account, stock, or gov't bond ever could.
Very well said Pipes. I buy gold and silver like I buy ammo. Not to turn a fiat profit but rather so I will have it when I need it.
Golds not at a major bullrun moron. it has been mostly stationary for about 3 years...The bullrun was cut short, if they hammer it down further, more ppl will rush into it. If it goes to 50 an oz (which is hilarious) the deflationary effects will be astronomical. Fact is, it's preparing for it's next great bullrun.
LOL!
"Golds not at a major bullrun moron."
10 years time and price run from $250 to $1850...only a fucken moron would not call that a bull run!
$1850 to $1150 over the next 4 years is a correction..not enough though.
Keep ignoring history, I doubt you know what happens to people that do...
Moving the goal post...
You must:
Adjust the nominal figures for inflation for the real price.
Consider the possibility that this is, in fact, merely a temporary correction in a larger cycle.
Many people believe, and are correct, in their assertions of monetary metals being a HEDGE against currency volatility, financial uncertainty, counterparty risk, political risk etc.
My guess is, most morons within the market space have already sold their stakes. Some may have even bought in just as gold began to turn down and sold out at a loss. Could gold go lower? Yes. Will gold remain low long term? That much is extremely uncertain.
Let's contrast this with the USD dollar?
- I know 4 people currently long USD, short EUR. I know 3 more people considering entering the trade. I would posit that this is a mid-late stage mania.
How about Stocks?
- Divergence market cap. and underlying earning potential suggest that people are piling into stocks for one reason, or another, and ignoring fundamentals. There is (theoretically) a limit on how high this divergence could go, provided debt is tethered to something, but it is not. I am certain it could go higher in the short-run. But again, mid-to late stage mania.
Interest rates are at historic lows. Borrowing in this environment is madness, unless fixed rates can be locked in, and future income streams are all but assured.
That leaves two broad classes of assets which interest me as an individual right now:
- Commodities. Ie: gold, silver, agricultural commodities etc.
- Cash.
The alternative is to deleverage as much as possible. Ideally I would want to deleverage fully, and then hedge 50/50 in both.
I do not like dead-cat-bouncing residential property, which is still overleveraged with a market deviation between real wages and property prices.
I would buy productive agricultural property and land, but I do not have enough cash to do so.
So, that's the excuse for today's dip in price.
And silver swoons by 2x in sympathy.
Motherfuckers.
BCB - hysterical! Because I was thinking that too - though a little differently. The Venezuelans are getting double-dipped as they waited too long where gold is now way down over the last few years, much less today.
They had oil; no need to sell the gold...the gold was plan B.
They should have exchange the oil for gold instead of dollars...dumbfucks.
They exchange their oil for coffee beans now apparently.
I wonder when we can exchange our corn for oil...
...
In this world right now, you don't exchange your gold for anything. When someone asks for your gold, give them lead.
Viva Utopia! Viva!
Gold and Gold Receivables.
Gold, gold fractionals, and gold rehypothecationals.
Should be good for continued heavy naked paper shorting of gold going forward.
Yoo'd think ChInRu would give them more for it than brick-in-the-Wall-St.
Years from now we will learn what really was going on in Venezuela to collapse the economy.
Somehow I think all that gold will be spirited off, just like Ukraine, never to be seen again.
That is somebodies Golden Parachute and an awesome heist-recovery script for Hollyweird - starring The Rock.
Gosh, the country via Socialism is really going down hill. I know! Let's sell our gold!
{looks in mirror and smiles at self}
We do know what happened in Venezuela. A Demagogue promising lots of free shit and promising to transforming Venezuela sold hope and change and they gleefully bought it. Once in power, they looted, causing crisis, then exploited the crisis to loot more, rinse wash repeat. Tampons (unused you pervs) are a currency there at this point. Maybe we should buy a crap ton of tampons instead of silver coins.
WHERE IS THIS GOLD LOCATED?
That would have been a nice detail to put in the article.
Wasn't there an article on here last year about Venezuela's gold reserves? A Goldman Sachs rep. (or some other big bank) was invited to see it, and was shocked at how small the room was.
Must have missed that article. But you're saying it's actually in Venezuela? That's sort of important to know. The next question is whether that gold is going to be transported out of the country as part of this deal, or if it's just going to be retitled in-place.
Chavez received the CIA cancer jab for repatriating his gold.
Chavez and Maduro ARE the CIA. The CIA could not have arranged a better situation to destroy Venezuela's economy and society, as both of these clowns have performed that task flawlessly.
While they are certainly CIA assets, I'd put them into the "Useful Idiot" category, rather than the co-conspirator one, as I don't think either of them could act that well.
a bus driver hand picked by chavez...
riiight
Why can't Ruined Country N have produced its own looting demagogue tyrants all on its own?
The help of the CIA is as unneeded as it is unwanted, to produce what we have seen go down locally in Venezuela. At least we could learn the lessons of their foolishness rather than wallowing in fantasies that it isnt their fault, that its the banksters or the CIA, that the revolution was robbed, man. The revolution was a robbery. Occam's. They voted for a thieving tyrannical demagogue.
The article clearly references this would be a cash-for-foreign-held gold. NOT the repatriated stuff.
Well, "international reserves" certainly implies that, but in the political world, you just never know. It makes sense though, as this "swap" will allow western banks to get out of an obligation to deliver rehypotheticated gold at a 7% discount to market. A real "win-win" for the banks.
I expect it to become the template until such a time as there aren't any significant sovereign claims left.
Then comes the reset.
Right.
So the model becomes...If you have a country which has placed significant gold reserves in your care, send in Economic Hitmen and pull strings to destabilize their economy. When they are sufficiently distressed they will liquidate their assets, at which time they will be settled in fiat.
Thus, the problem of long-gone physical...is solved.
Hitmen like Chavez? He looks more like a Hollywood plant than a CIA one, based on the number of commie actors who fawned over him, like they did for Castro, and even Stalin and/or Hitler back in the day. Was Nero a CIA plant too? How amazingly powerful is the CIA? Its not just a government pay scale rigid bhreaucracy stuffed with comfy yet bitter time servers. Its magic. Its the fukkin ministry of magic.
yes, there were several such articles on ZH
If that gold was held in an offshore account, it was re-re-re-re-re-rehypothecated years ago.
Exactly. Knowing where it is PHYSICALLY RIGHT NOW is important to understanding this story.
I fear that is a question that cannot be answered.. Mexico, Austria, India...the list is endless... Gold and Gold Receivables...
Venezuela repatriated its gold a few years back. The last country to withdraw and receive substantially all their gold held in North America.
Provided the gold (or the replacement imitation tungsten/gold) remains physically in Venezuela it can be sezied by the rulers. Whoever and whenever they may be.
You gotta ask yourself this:
Would you loan a batshit socialist bus driver head of state of a failed country $1.5 billion without having direct access to the gold collateral?
If the answer is Yes, my guess is that you would be a minority of one.
"WHERE IS THIS GOLD LOCATED?"
Seriously? Ok...
3477 e 19th st
Kansans City MO
555-345-9832
The front door password is: 348729
The vault password is: Right 12, left 44, right 77, left 18
Anthing else you'd like to know?
When reading into the article was also waiting for the punchline of "where", then automatically assumed that it would be going to China. I see USD $1000 as a downside target for gold and probably the resumption of the commodities bull run.
Totally.
China would accept the gold as colatteral for an interest free loan, the metal shipped to China and a four year option to buy it back at today's price included as part of the deal. Everything priced only in Yuan.
Mostly to stop the physical metal falling into Western hands.
Just dont have a North Korean smuggle it for you
How about some crowdfunding? I'd buy a few oz at $1070. Even $1080.
You gonna send the money order to Venezuela and wait for the coins to show up in your mailbox? You will absolutely need a middleman to broker the transaction and there goes any discount. Only the big boys get to buy at discount, unless you know a guy who sells stolen AU from an alley.
Well at least this turd has finally floated....amazing we have all this printed Euro money looking for something to buy but not seems to go for PM's...Wonder if that is verboten.
Yes PMs are not allowed to play in this game going on....we are the fat ugly guy that never gets picked for the team...
Barbarous collateral.
fools, why didn't they sell it to Putin?
But it's just a "babaric relic". Gold has no real value in today's society.
explain this to the Old World. for some reason, it's chockerblock full of barbaric lovers of gold, from South Africa to Norway, from Portugal to China
Some commenters amuse themselves by omitting the sarcasm tag...I've done it often and the results are hilarious...downvotes are the least effect...
If you steal ALL the gold on the planet how can you have a gold standard?
FINALLY.
THIS WAS THE POINT ALL ALONG.
Selling your good gold to those crooks in exchange for their crappy dollars? Offer it to the Chinese who would LOVE to unload more of their crappy dollars. Surely they'll pay you just as much or more. And you won't be helping the banksters out of their short squeeze. Weren't they the ones who poisoned Chavez, or was that the CIA? Nice people anyway.
Wait, who granted themselves special powers with a new law? Obama or Maduro?
Yes.
I guess they will continue to smash Gold & Silver until we see bars and coins laying on the side of the road. But hold onto to that dollar, we have not run of of trees yet.
Why lend them any more $$$ when its a basket case and wall st. owes China gold anyway. Win-Win in term for the BRICS.
makes sense "vyeung"..
China's holding a nail gun to USA central banks, so they in turn are desperate and point a bigger nail gun to Venezuelas head...
I'm thinking that China is playing much harder ball behind the scenes than any of us imagine... at least I hope so ! (Christ, never thought I'd be rooting for Asia), but at this point, they're about the only ones that can put the moves on the USSA.
Selling gold at a discount? Who the hell does Maduro think he is, Gordon Brown?
I'm surprized they still have it, like what took them so long
Sell while low argentina, yeah that makes alot of sense.
who has time to make clear and intelligent decisions, when a nail gun is pointed at your head?