Venezuela's Gold Liquidation Accelerates; Will Be Out Of Gold In One Year

On Friday, Turkey unveiled its latest unorthodox financial surprise, when a local newspaper reported that Ankara will repatriate all of its gold held at the NY Fed. The stated reason: an attempt to circumvent the dollar. "Why do we make all loans in dollars? Let’s use another currency" said Turkey's president Recep Tayyip Erdogan during a speech at the Global Entrepreneurship Congress in Istanbul on April 16, according to Hurriyet. "I suggest that the loans should be made based on gold."

In what some saw an appeal for a gold standard by the Turkish president and a bid to sever ties with the US Dollar, Erdogan added that “with the dollar the world is always under exchange rate pressure. We should save states and nations from this exchange rate pressure. Gold has never been a tool of oppression throughout history."

While Erdogan may have had honest, and even noble, intentions (yes, one can smirk here) it is worth noting that Turkey is hardly the first country to demand its gold back from western nations, having been preceded in recent years by Germany, Austria and the Netherlands.

But the most notable, and ominous for the people of Turkey, example of gold repatriation is also the first one in the post-crisis period, when Venezuela's then-leader Hugo Chavez demanded all Venezuela gold located in offshore central banks be returned to the motherland. At the time, Chavez said he did it for the people, and since he died shortly after, there was no way to gauge what his real intentions were.

The problem is what happened later.

Conveniently, last week Russ Dallen of Caracas Capital wrote inform his clients what Venezuela has been doing over the course of the past several years regarding is repatriated, and now swiftly dwindling gold reserves.

In September 2011, Venezuela had $21.269 billion in gold reserves. After a rash of selling gold in Switzerland to pay bonds maturities and coupons in early 2016 (which we tracked assiduously and reported on in these reports), Venezuela's gold reserves had fallen to $7.7 billion where they held steady until November 2017. But as we reported in October of 2017, there were loans backed by gold that Venezuela had taken out that were coming due. As we reported last month, in the last two months of 2017, Venezuela had lost $1.1 billion in gold and reported that they held $6.6 billion in gold on December 31. In January, Venezuela's gold reserves fell another $500 million.

As of January 31, Venezuela had just $6.1 billion in gold reserves, down another half billion from the $6.6 billion Venezuela reported a month earlier on December 31. In short, Venezuela burned through $1.6 billion of its gold reserves in 3 months, and it is important to note that this fall in gold reserves is without Venezuela paying its bond debts.

Here is a chart of the recent declines in Venezuela's gold...

... and the dramatic plunge in the past 2 years in context.

As Dennis Gartman summarized in his Friday letter to clients, "at the current pace of sales, Venezuela will effectively be out of gold by May or June of next year. Having fallen from $21.3 billion seven years ago, it’s now down to $6.6 billion as of the end of January and we suspect that it’s sold another billion since then." His conclusion:

"The trend is clear; "The Seller" is almost sated."

He certainly is, and soon the world's poorest socialist paradise will also have no gold left unleashing the final stage of Venezuela's social collapse. Still, one wonders who is on the other side of the trade, and is so eagerly buying all the gold Venezuela has to sell. 

Meanwhile, we hope Venezuela's tragic experience with its soon-to-be-vaporized physical gold which was converted to paper money so Venezuela could repay the country's debts to the west will be a lesson to the people of Turkey: keep a close eye on what Erdogan is about to do with the people's gold. If the "president for life" follows in Maduro's footsteps, Turkey's gold will soon be gone, all 591 tonnes of it.


Twncpcone Sun, 04/22/2018 - 17:53 Permalink

Financial markets are owned by the same people who staged 9-11.


There were no commercial plane crashes on 9-11.  Twncpcone.


As the article states gold has been used to oppress people.  Just like staged acts for never ending war.

Mr_Potatohead Mr_Potatohead Sun, 04/22/2018 - 19:09 Permalink

If you read… , you'll see that things start to get very interesting on pg 6 of the prospectus and then look very interesting at the top of pg 11.  Interesting choice of language for a prospectus, huh?  Wanna bet a lot of those bars were bought with funds poured into GLD?

Austin-Fitts wrote some nice stuff that used to be available here (but isn't anymore) -->

Maybe the reason Rothschild exited the gold market in April 2004 (just as things were getting interesting) was to avoid trouble -->


In reply to by Mr_Potatohead

Kokito Twncpcone Sun, 04/22/2018 - 20:09 Permalink

By ZeroSh.t logic  we could also say that Ukraine, the world's capitalist paradise, has no gold left & has become a total failed state and the European Union has become Ukraine

Check ZeroSh.t own article on Ukraine’s gold :)))))


Venezuela - Gold Reserves     Latest      Reference

Gold Reserves                      184.90     Q1 2018     Tonnes

Foreign Exchange Reserves    9591.00    Mar 2018   USD Million


Ukraine - Gold Reserves        Latest      Reference

Gold Reserves                     24.30       Q1 2018    Tonnes

Foreign Exchange Reserves   18200.00  Mar 2018   USD Million


This ragtag PofS and right-wing (fascist & neo-Nazi) website can not hide their exaggerated hate towards the socialist system of the Chavistas in Venezuela. ZeroSh.t is always coming out with articles, statistics, charts & graph, all FakeNews, predicting the complete collapse of the political & economic system in Venezuela but their predictions have always been proven wrong time & time again. 


Tyler Durden, you are a dumb Mother-Fuc.r & a stupid shit (who ever you are). Go fuck yourself.

In reply to by Twncpcone

Bopper09 Sun, 04/22/2018 - 17:53 Permalink

Still beats Canada!  Carney proudly announced that we had zero before he left to destroy England.


Dumbest thing any human has ever said.

abgary1 Sun, 04/22/2018 - 18:03 Permalink

At least Venezuela has Gold, Canada's central bank sold off all of Canada's, while the socialists (PM Justin Turdeau, Comrade Wynne, Ratchel Nutley, John Whoregan (aka Andre Weaver)) do everything in their power to destroy the only industry that generates any wealth, jobs or tax revenue, that being the oil industry.


The ignorance of the Socialist is beyond belief and the destructiveness of Socialism is frightening.

rphb Sun, 04/22/2018 - 18:20 Permalink

There is nothing noble about Calph Erdogan, and neither is his suggesting to use gold. He is doing it for one reason and one reason only. Because it is in his own best interest.

And really, it is in almost everybody's interest to use gold, America is the only one that benefits from the fiat ponzi & pyramid scheme, and only the top elite in America at that.

Someone that dreams of being caliph, or indeed anyone that wants to be sovereign needs gold, as gold is the only thing that can ensure that sovereignty.

So even though the man is doubtlessly evil, in this one instance it is also in our interest to go along with him.

Nuclear Winter Sun, 04/22/2018 - 18:23 Permalink

What's left? PetroCrypto DOA... Invasion of Puerto Rico during blackout off the table... Exporting crack (Columbia, Mexico) and hookers (Russia) too much competition.

Maduro needs to pussy up, grab the rope of Judas and hang himself in public. Then let the citizens of Venezuela stone the Fat Corrupt Communist Fuck (FCCF)!

V-Pesos worth less than the "doody" scene in Caddy Shack swimming pool...


Angry Plant Mon, 04/23/2018 - 01:26 Permalink

The thing none of gold bugs seem to understand about gold. No one will use to buy something priced in gold if they can use fiat instead. Why should they it's always good for the seller to receive payment in gold but it doesn't work for the purchaser as well fiat does.

Quantify Mon, 04/23/2018 - 05:30 Permalink

Countries will learn very quickly what the U.S. learned long ago. If you tie your currency to gold, you will run out of gold very quickly.