Did Citi Just Confiscate $1 Billion In Venezuela Gold

Tyler Durden's picture

Just over a year ago, cash-strapped Venezuela quietly conducted a little-noticed gold-for-cash swap with Citigroup as part of which Maduro converted part of his nation's gold reserves into at least $1 billion in cash through a swap with Citibank.

As Reuters reported then, the deal would make more foreign currency available to President Nicolas Maduro's socialist government as the OPEC nation struggles with soaring consumer prices, chronic shortages and a shrinking economy worsened by low oil prices. Needless to say, the socialist country's economic situation is orders of magnitude worse now.

According to El Nacional, "the deal was for $1 billion and was struck with Citibank, which is owned by Citigroup."

As Reuters further added:

"former central bank director Jose Guerra and economist Asdrubal Oliveros of Caracas-based consultancy Ecoanalitica said in separate interviews that the operation had been carried out.  A source at the central bank told Reuters last month it would provide 1.4 million troy ounces of gold in exchange for cash. Venezuela would have to pay interest on the funds, but the bank would most likely be able to maintain the gold as part of its foreign currency reserves."

On paper yes - very much as any comparable gold leasing operation conducted by sovereign nations with central banks - but the actual physical gold would be transferred to an unknown vault of Citi's choosing where it would become an asset controlled by the bailed out US bank.

We note this peculiar gold swap case because something curious took place overnight. On the same day that Venezuela announced it would seize a local Kimberly-Clark factory after the US consumer-products giant announced it would shutter its Venezuela operations after years of "grappling with soaring inflation and a shortage of hard currency and raw materials", Venezuela's President Nicolas Maduro said on Monday that Citibank planned to shut his government's foreign currency accounts within a month, denouncing the move by one of its main foreign financial intermediaries as part of a "blockade."

Among the many reasons why the sudden departure is surprising is that due to strict currency controls in place since 2003, the government relies on Citibank for foreign currency transactions, meaning that suddenly Venezuela's financial "blockade" is indeed about to get worse.

"With no warning, Citibank says that in 30 days it will close the Central Bank and the Bank of Venezuela's accounts," Maduro said in a speech, adding that the government used the U.S. bank for transactions in the United States and globally.

In typical bluster, Maduro added: "Do you think they're going to stop us with a financial blockade? No, gentlemen. Noone stops Venezuela."

What Maduro did not mention is that among the central bank accounts closed by Citi will be at least one, rather prominent, gold swap launched just over a year earlier.

Reuters adds that Citibank, could not immediately be reached for comment about the purported measure against Venezuela's monetary authority and the Bank of Venezuela which is the biggest state retail bank. 

With the OPEC nation's economy immersed in crisis, various foreign companies have been pulling out or reducing operations. However, few of them held over $1 billion in Venezuela gold as hostage.

So during his next address, perhaps someone inquire Maduro if as part of its "blockade" Citi also absconded with a substantial portion of the country's gold reserves, and if so, which other banks have comparable "swap" arranagements with the insolvent nation?

Meanwhile, Hugo Chavez, who spent the last years of his life repatriating Venezuela's gold is spinning in his grave.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Kirk2NCC1701's picture

Citi = Saudis

Damn Sandites!  Does that make me an anti-Sandite?

The Merovingian's picture

Coming soon to a US style Banana Republic near you!

Four chan's picture

print the money steal the real asset. rothschild was a genius.

OrangeJews's picture
OrangeJews (not verified) Four chan Jul 12, 2016 5:51 PM

Who would have ever thought Hugo Chavez would be the "good guy"???

nope-1004's picture

All Venezuela had to do was invent a GLD fund and sell Citi the derivative, call it VGLD.  Isn't that how "smart money" invests?


santafe's picture
santafe (not verified) nope-1004 Jul 12, 2016 6:24 PM

The long arm of USG is behind Citi's move.

Richard Chesler's picture

This move made courtesy of the enrichment of some bolivarian "socialist" negroes.


Lore's picture

This is the same shit that they did to Iraq and Libya: swoop in and seize the national assets and leave a trail of blood and paper in their wake...

Hillarys Server's picture

Yes, Hillary did well. She's "experienced".

In 20 years there will be a Showtime documentary on her called "Women who Kill".

mary mary's picture

Yes, but the bombs would have started dropping the next day, like they dropped on Omar Gaddafi.

Escrava Isaura's picture

Maybe is the Tungsten that Venezuela is handling back with a note: Thanks, but no thanks.


Also, post-collapse gold will be meaningless.


But it will be the last bubble, out of desperation by some neocon that wants to keep party.  


gonetogalt's picture

Meaningless???? GOLD, Bitchez!!!

When the dust settles, it'll be everything. And certain tribesmen own/control enought to control every country on Earth. And you don't have enough to make a dirty spot in the bottom of a thimble. Methinks, "Sour grapes?"

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) nope-1004 Jul 12, 2016 7:14 PM

"All Venezuela had to do was invent a GLD fund..."

Or VenezCoin crypto currency.  Start buying them for $1000 through straw purchasers and Venezuela ia all set.  The Ponzi scheme is off to the races!...

actionjacksonbrownie's picture

Maduro in Spanish loosely translates into "STUPID FUCK"... or something similar.

peddling-fiction's picture

It means mature or ripe, literally. Could be interpreted as "harder" from más duro (ma-duro).

Hail Spode's picture

That is "Pandejo" but what we really need here is the Spanish for the term "if you can't hold it, then you don't own it." 

Hail Spode's picture

"si no se puede sostener , entonces no lo posee ."

ZorroHedge's picture

I would say only an idiot would have thought he was a bad guy, and a complete morron would still think he is the bad guy.

buttmint's picture

Orange et al...word around the campfire is that Hugo Chavez was a hit by the seeia...maybe a pinprick of malignant cancer delivered clandestinely. Worked slower than polonium, but the effect was the same---head of state erased with extreme prejudice. Americans are very nasty enemies. I am certain Putin and Snowden has dirt on the technique employed.

The "black arts."

mary mary's picture


Venezuela traded $1-billion of real money for $1-billion of counterfeit money.  Stupid.

Here2Go's picture
Here2Go (not verified) mary mary Jul 12, 2016 5:56 PM

aaaaand, it's GONE!

TheVillageIdiot's picture

Like a crown and anchor game at the fair.... move over son, others in behind want to play...

FX223's picture

Well played Washington...well played!


Fuck all moneychangers!

willwork4food's picture

$1B is nothing for a country. It is for the president and his buds so they can maintain their high standard of living. Citi knows this, as other companies that are leaving in droves. Fuck this asshole,his familiy and his friends.

Shemp 4 Victory's picture

Yep, that gold was confiscated the moment the gold-for-cash swap deal was made.

A billion dollars in cash wasn't going to change the outcome one way or another. All it did was provide a momentary reprieve from the inevitable. The only thing a billon in cash bought for Venezuela was a delay until today of what would have happened a few months ago.

Now their gold is gone forever. I'm sure there is a lesson in here somewhere for those who .... Oh look! Pokemon!

Badsamm's picture

They kept it in a bank? Lol.

Say What Again's picture

Sometimes I want to print a posting to read at the beach.  What happened to the "print" button? 

Colonel Walter E Kurtz's picture

It is being blocked by your ad blocker.

Turn it off and it will be up near the top in the same panel/block where you can also share the page with all your facebook friends!

NotApplicable's picture

It's the little icon at the top of the page by the facebook and twitter icons.

Urban Redneck's picture

just insert /print/ in the URL after zerohedge.com and before news/date/blah blah blah... (if you don't want be bombarded with ads and needless web scripting)

Say What Again's picture

Thank you for the comment.  It works perfectly.

Jam's picture

Going to the beach to work on your tan brother?

Il Dottore's picture
Il Dottore (not verified) Kirk2NCC1701 Jul 12, 2016 11:50 PM


nightshiftsucks's picture

But who wants the worthless yellow metal ?

kliguy38's picture

that's exactly what I thought....sell it to me.....its only rocks

offwirenews's picture

great...now the globalists have just extended this b.s. manipulation a little longer.

I swear, I'm going to probably O.D. on popcorn at this point

Supernova Born's picture

Citi going barbarous.

Herodotus's picture

Has Venezuela cut off shipments of oil to the US?

Bank_sters's picture

Venezuela went to the shitibank pawn shop and got fooked.   

CJgipper's picture

Did they?  It's not like they're paying on the underlying loan.

Here2Go's picture
Here2Go (not verified) CJgipper Jul 12, 2016 6:14 PM

Maybe they should bid for the Olympics! That oughta turn things around!

steelhead23's picture

A clear sign that U.S. foreign policy and Wall Street are closely enmeshed.