It was quite comic, if not tragic, to watch the idiotic trio of Merentes, Giordani and Chavez try to explain why they were moving Venezuela’s international reserves. As I have said before, I believe the gold should be in Venezuela, not elsewhere, as a normal policy, the problem is why these clowns are making this move right now. I initially dismissed the news about the reserves being moved, there was not much to be moved besides the gold, which I did not believe would be moved (and was not the main focus of the proposal) But these guys truly plan to move the gold, never mind how much it will cost. Time to worry!
Let’s hear some of the bizarre explanations given today:
Chavez: How long are the countries of the South going to finance the rich ones?
Hugo, when you have something in custody, you have it there for safekeeping. There is no financing involved, least of all with gold. They keep it, protect it, charge you a fee. Period. If it is a bond, the same. These are small fees, I bet moving the gold will cost more than a decade worth of fees.
Chavez: It is a “good” decision for the Venezuelan people
Each Venezuelan will go to bed each night peacefully and sure that his/hers Bs. 3,460 in gold is safe in Avenida Urdaneta in downtown Caracas, under the custody of Merentes and Giordani. Unless they take up Chavez’ invitation and put it in the basement of Miraflores Palace.
Giordani: We did it to diversify the assets
Jorge, Jorge, how stupid do you really think we are. While it has worked really well to keep the gold, Venezuela’s reserves are far from being “diversified” with you running the show. Gold is 63% of reserves. You hold about US$ 2.7 billion of Venezuela and PDVSA bonds, less than US$ 5 billion in really liquid reserves. So, in terms of investments, there is no diversification.
If you are talking about geographical diversification, then I ask: Why do you have US$ 42 million in Panama? Panama is BBB, while the US, even after the downgrade is still AA+ and AAA (according to two of the rating agencies)
BTW Jorge, this silly move is going to cost you in future financing.
Nelson Merentes: Measures avoid losing money because of the financial crisis
Oh Nelson, you know quite well what custody means. Lehman went bankrupt, but those things under custody at Lehman were returned to their owners, that’s not how the world works and you know it.
Nelson Merentes: There are countries in better shape
Funny, not one of those you mention has a better rating than the US, or even close! In fact, Brazil has the same rating as Panama for that matter.
But the scariest sentence was Hugo’s:
We have difficulties…
Oh baby! If you have difficulties at US$ 90 per barrel, I hate to think what will happen if there is indeed a financial crisis.
In the end, it is clear (to me, at least) that this is political. Chavez wants to avoid sanctions if…that’s the hard part to guess, but I can only think of two things: US sanctions because of the Iran connection or UN sanctions if the Constitutional order is broken.
You can bet on the second. The gold will take a few months to get here. The timing is perfect! When the Constitutional order is broken, the gold will be here and the reserves will be depleted! These guys have a plan and it goes back to the Jose Vicente intreview two weeks ago, Chavez still has doubts about democracy.
(A final note: I used to say that when people where I used to work were interested in stocks, it was time to sell. Now that Chavez and cronies nationalize the gold industry in order to “build” reserves and they decide to bring back the gold to Venezuela, maybe it is time to sell gold, the dumb money is on it. This must be the top!)
The Devil's Excrement 
August 25, 2011 at 2:48 am
Crown sourcing the transport of gold reserves:http://blogs.reuters.com/felix-salmon/2011/08/23/how-to-get-12-billion-of-gold-to-venezuela/
August 23, 2011 at 12:30 pm
No comments
“….cómo se va a tener casi 60% de las reservas del país en bancos que están cerrando. Ningún país esta exento de vivir los impactos de un tsunami económico“ Chavez.
August 22, 2011 at 6:34 pm
http://www.npr.org/2011/08/22/139859316/chavez-wants-gold-holdings-transferred-to-venezuela
August 19, 2011 at 3:08 pm
Not too far. There are some steps before they devalue.
First of all, BCV will “realign” up the SITME arbitrage, so they will devalue, at the end of December, even before, depending if oil prices return to 60 $/B, they will jump well over 75% from 4.3 bs/$, not less than that. That is my self-accumplished prophecy.
Believe me Chavez y su combo, and of course venezuelans, are in trouble, the fiscal hole is huge!! and the only medicine around is to sew the lips!!, or if you like, big budget surgery. It is paimfully.
August 19, 2011 at 2:21 pm
(in spanish) well well, fro B+ to BB- tal cual como lo hicieron con USA, riego politico. “The nation’s “changing and arbitrary” laws, price controls and other factors have hurt its domestic economy”, S&P said
Tanto va el cantaro al agua hasta que se rompe, Standard & Poors rebaja calificacion e Venezuela de B+ a BB- por aumento del “riesgo politico”. GIordani, Merentes y Chavez, la trilogia de la nueva economia socialista, se llevan un galardon for weekend!!
August 19, 2011 at 2:51 pm
And these idiots, the three stooges, didn’t see it coming. Now, of course, contracting new debt is going to be more costly. BTW, how far is the country for another currency depreciation?
August 19, 2011 at 1:44 pm
Well, as probably was expected Standard & Poor has reduced Venezuela’s bond rating.
http://www.eluniversal.com/2011/08/19/standard-poors-rebaja-calificacion-de-venezuela.shtml
As a person who has no knowledge of the bond market I can only assume that this will raise Venezuela’s cost of borrowing.
August 19, 2011 at 1:25 pm
Have you heard about the golden rule?
Whoever has the gold, rules
August 19, 2011 at 6:11 am
Don’t miss the the related ‘debate’ in the AN:
August 19, 2011 at 9:29 am
Thanks for bringing this. Notice how the PUS representatives remain mostly silent to what Rodriguez said. They are cowards without arguments.
August 19, 2011 at 10:14 am
Not bad.
Could people watch that on VTV? I hope so.
August 18, 2011 at 8:30 pm
Sometimes I get very pessimistic and think that these thugs will not relinquish power if they lose the election. They have every incentive not to do so. I guess when that happens we will get the same status in the U.S. as Cubans have enjoyed. That would be a wet dream for Chavez: seeing hundreds of thousands of escualidos leaving the country.
August 18, 2011 at 8:21 pm
I just saw a video of national assembly representative Miguel Angel Rodriguez responding to an attack by one of the three stooges, aka Giordani, stating what is the real reason for moving the international reserves to Venezuela. In no uncertain terms, he said that they just plan on stealing that money, and called them repeatedly, thieves. That was a brave thing to do. Finally, someone in Venezuela has grown a pair! The link: http://www.youtube.com/watch?feature=player_embedded&v=akSXjt9pgXc. There is no waste here!!!
August 18, 2011 at 4:51 pm
If you had to “get away” and the whole world was tracking your money, it could make sense to travel with gold.
One gold bar, as used in the Federal reserve (7 x 3.625 x 1.75 inches) weighs about 30 lb. (14kg), but is worth (at current market prices) about $800,000.
Dense stuff, that gold. I wonder how much Montezuma was worth at today’s prices.
August 18, 2011 at 6:07 pm
Alex, it is going to be detected my metals detectors in any airport.
Nowadays it does not seem to be any wayout or gateway.
August 18, 2011 at 7:14 pm
Unless you have your own airline with direct flights to Teheran!
Stealing gold is so…Hollywood!
August 18, 2011 at 7:18 pm
But Somali pirates are curious about the gold shipment to Venny
August 18, 2011 at 7:42 pm
You are right, I did not consider the 320 Airbus, however is fliying with cubana, Ilushin….
August 18, 2011 at 7:34 pm
I heard that a nobel prize winner of communism of old could not defect with his gold medal, so he dissolved it in acid and transported the solution. On arrival outside the borders, he had the gold precipitate and had it molded back into the medal.
There’s always a way.
—
August 18, 2011 at 4:14 pm
Chavez knows he will not be around by December 2012, his bloated face is due to the farmacos he receives to slow down organ failures. He needs like ten or 12 chemotherapy sessions total.
August 18, 2011 at 6:10 pm
Do not believe on that, it is pure makeup!!, He insists that he has cancer ….”pero del bueno”…
August 18, 2011 at 4:08 pm
Iranian TV says Kadafi will leave power & go to Venezuela:
http://www.noticierodigital.com/2011/08/television-irani-kadafi-abandonaria-el-poder-con-destino-a-venezuela/
August 18, 2011 at 3:58 pm
Glenn Says:
August 18, 2011 at 6:18 am
There is no doubt that the move is to avoid sanctions when Chavez refuses to leave office and moves into repression mode. There is also no doubt that this is to facilitate stealing the last of the fungible resources of Venezuela as he marches on to make the dictatorship official and well known, same as Fidel. He will need to maintain payments for votes, military obedience and continued corruption. You only thought it couldn’t get worse before now…………..
———
This is a transparent fact. Chavez will quite possibly lose the coming election, but with all the gold, a new administration will command such depleted liquid assets they will have to negotiate with Chavez/militrary forces, who will thwart true democracy at every turn.
The fatal flaw with this strategy is the preposterous assumption that Chavez cronies and loyalists and the military itself will safeguard said oro, when in fact, the longstanding and inviolate tradition, from Mexico to Tierra del Fuego, is to pillage and loot the coffers till every last B is gone.
I mean, por favor, caballeros! Do you really think Venezuelan military officers and Chavez buffoons can possibly be in the same room with a mountain of gold and not pinch a kilo or two for El Pueblo, for la familia, plus a bar or two for that red Jeep Cherokeee and a vacation crib in Margarita and those old standbys of all red-blooded generals and chamos – roncito, puros, and poontang.
Jesu Christo. The moment all that oro hits the shores of the Bolivarian Republic, twenty billion will become nada, nunca, zero, in no time at all – of that we can be sure.
Juancho
August 18, 2011 at 3:53 pm
He just wants empty the nation’s coffers to fill the so-called revolution’s pockets.
—
August 18, 2011 at 3:40 pm
If Chavez refuses to recognize the results of the coming election, the international community would, as a first step, freeze Venezuelan assets overseas.
As in the case of Libya, the next step is to recognize the legitimacy of the opposition, and transfer control of the assets to them.
But if the reserves are inside Venezuela, that cannot be done.
August 18, 2011 at 3:06 pm
“A good decision for the Venezuelan people?” This has a good decision for Hugo Chavez’s personal finances and politial nonsense written all over it.
August 18, 2011 at 2:12 pm
Saying “We have difficulties…” may be the biggest understatement since “Houston, we have a problem.”
At least the Apollo 13 astronauts had the capacity and will to learn about and understand the nature of their problem. Regrettably, Chavez & Co. does not.
August 18, 2011 at 11:47 am
Citgo is gone, the bonds it issued are guranteed by the assets of the company.
I dont think an arbitration case can freeze the international reserves. International sanctions, or US sanctions can.
August 18, 2011 at 1:59 pm
If anything were going to happen, interested in this issue would have to wait for a brand new US President, no more than two years from now. Obama will not play hard, Venezuela has lot of friends, and international public opinion has changed a lot in the last 3 years. Chavez did learn Castro’s lessons, “con la mano dando y a Dios rogando”. WHen Castro die in just few months a lot of Prime ministers, Presidents, Kings, princes, royalties, Hollywood’s fauna, celebrities, famous CEOs, etc. will be in his funeral.
August 18, 2011 at 11:46 am
my thoughts are pretty much along the same lines as everyone else.. with all the arbitration occurring in the world against venezuela, it would seem citgo will no longer belong to venezuela for long.. my guess is moving all the gold back to venezuela allows for what you guys say, paying off the votes.. stay in power, and if chavez loses, a coup will occur financed by the gold. nonetheless, venezuela will default on its financial obligations to other countries… (developed ones at least) and from then on, the gold will be safe in venezuela, and they will still have hold of it.. such a pity.. a beautiful country destroyed within 13 years…
August 18, 2011 at 11:27 am
the West does not have access to Libya or Venezuela oil fields… they may sacrfice Venezuela to get Libya back
August 18, 2011 at 11:23 am
Obama is the weakest president in US history
August 18, 2011 at 11:22 am
Qaddafi cannot be alllowed to arrive in Venezuela. WORD TO US NAVY
August 18, 2011 at 11:13 am
dont be suprised if Col. Qaddafi goes to Venzuela… I have been pushing this thesis ever since
August 18, 2011 at 2:18 pm
I don’t think Qaddafi is that rational. From what I have seen of his psychological makeup, I think he will go down with the ship. He swore to fight till the end, and I think his somewhat twisted sense of honor will demand it.
August 18, 2011 at 11:10 am
[…] Devil’s Excrement also touches on gold, but in this case is looking at repatriation, rather than nationalization. […]
August 18, 2011 at 11:06 am
Miguel:
Tip of the hat to you. My thoughts exactly. Chavez wants to avoid economic sanctions which would be implemented mainly by the United States and the European Union. Note that historically, China, Russia and Brazil tend to oppose those sanctions. My guess is that he fears those sanctions more so because he truly plans to break the constitutional order than anything else. He is really scared by the show of unity of the MUD and correctly perceives that he might loose next’s years election. Nonetheless, whatever the real reasons, the international community has taken note of this, and will probably watch Chavez even more closely. My guess is that they will exert pressure through a barrage of lawsuits involving the nationalized businesses in Venezuela. Also, it would not be very hard to imagine that every pertinent federal agency in the U.S. will be instructed to watch Chavez’ regime even more closely. With or without disease, his days are numbered.
August 18, 2011 at 11:15 am
… are numbered. We hope. But the destruction will be enormous.
August 18, 2011 at 12:46 pm
The President’s Math is very simple.
BCV will pay in bolivares (print them) to the Republic for the gold it or any state company like PDVSA sells to BCV. Here there is an exchange rate issue; it is an important question since the inflation (tax) impact will depend on it.
Treasury will account Gold in a similar way as oil, for instance, some kind of royalty, taxes, etc. will be paid to the Republic/BCV, and it is more or less the same.
The gold bullions will travel to UK in order to be certified, I think. So international reserves will increase (the gold component) by that much.
At the same time, Treasury, “fisco” receive fiscal revenues coming from gold, we economists, have to break down fiscal revenues and add gold in it. BCV will have a new hard power money source, it hs to print money to pay for it. Negocio redondo, my friends.
August 19, 2011 at 3:53 am
I dont think there is a chance for the MUD to be honest, with the bunch of stupid selfish candidates running I find it hard. The only cause could be his cancer and the survival of the robolution.
August 18, 2011 at 11:04 am
Reason 1: Gaddafhi has his gold in Libia and has used it to pay his mercenaries to fight his civil war.
Reason 2: Gold will be distributed between Chavez and the Cubans. SImple robbery.
Either way, most will be stolen and used against us, which is even worst. Imagine yourself paying a sicario to kill you, or a lawyer to sue you.
I believe that one day of Chavez will take a few months of hard work to get back. If we let him get his hands on the gold then then we are talking about a year or so of hard work.
2012 seems like a long way from now. One of our few hopes is his cancer, for which I pray everyday, but if he survives then we will meet in Miami’s calle 8, which would be renamed little Caracas.
August 18, 2011 at 12:30 pm
No need for calle 8 when already exist Westonzuela in Florida and Katyzuela in Texas. I’m in Katyzuela. We have great cachapas con queso de mano here.
August 18, 2011 at 5:40 pm
Tell us where?
August 18, 2011 at 10:53 am
If you read Spanish history, you will dicover that Spain gave its international reserves to Russia at the end of the 30’s or the beggining of the 40’s. Russia NEVER returned those funds (reserves). They were STOLEN by the Russians. I imagine that this is the future of our reserves whithout even thinking on the real possibility of devaluation of the Russian currency. We can not permit this and we should make as much noise as possible. A Crooko is a Crook forever until death.
August 18, 2011 at 12:37 pm
They did not steal it proper, they had a scam to put a markup around 3 for the purchase of arms from Russia by the Spanish Republicans. The amounts were deducted from the Spanish reserve held in Russia. At the end there was not much left. Looks like an early boliburgueses scam.
August 18, 2011 at 10:41 am
To: Alex Dalmady:
Yes, you are probably correct. There is no precedent.
This, however, is a very, very unusual case. Name me the last country which has seized the assets of most foreign entities within its borders and then simply ignored any legal requests for just compensation? Just one. Your excellent point, however, is well taken.
August 18, 2011 at 10:18 am
Si se lee historia espanola, descubriran que Espana entrego sus reservas a los Rusos a finales de los anos 30 o principio de los 40. Rusia NUNCA devolvio las reservas. Estas fueron ROBADAS por ellos. Me imagino que ese sera el futuro de esto, sin hablar de posibles y seguras devaluaciones de la moneda Rusa. Esto no lo podemos permitir y hay que hacer el mayor ruido posible. Ladron es Ladron hasta la muerte.
August 18, 2011 at 12:07 pm
No fue Espana quien entrego las reservas sino los comunistas que perdieron la Guerra Civil y la Republica, aunque parece que aun se debate quien en realidad las entrego. La URSS que ahora no existe nunca las devolvio y eso que Franco se canso de pedirlas.
August 18, 2011 at 10:06 am
Dr Faustus,
The reserves are in the name of “Banco Central de Venezuela” which although it belongs 100% to the Venezuelan government, it is a separate entity. I supposed you could try to freeze these assets as a way of collecting an arbitral claim, but I doubt it would stick for any amount of time.
Not an historian, but I can’t think of a precedent.
In any case, if said assets were frozen, you would immediately have a conflict with all of the BCV’s other creditors, including everyone who has a bolivar note or coin in their pocket.
August 18, 2011 at 11:01 am
How about Iran’s funds when it was declared a hostile governement??
August 19, 2011 at 6:03 am
Actually just a note but Irans reserves (those held by the iranian government) were never frozen. What was frozen were grey area slush fund money of the Shah, like Chavez’s “fonden” Iran kept its gold reserves and many others. The problem was they had no one to sell them arms not a lack of money.
August 18, 2011 at 11:02 am
And how about Russia stealing Spains reserves in the 30’s or 40’s
August 18, 2011 at 10:02 am
The kind of scenario i’ve in mind Citgo or any other asset in the US doesn’t matter anymore for the chavismo. Actually, it’s the cost of fighting the almighty empire and be free; the equivalent to the cuban embargo. Excellent for the balcon del pueblo.
Thus what’s happening is more the sense of time of a very ill egomaniac, the survival instinct of his cronies, and fascist corrupt generals.
August 18, 2011 at 9:45 am
“moctavio Says:
August 18, 2011 at 9:27 am
No, such decisions would be against PDVSA, not against Venezuela, I dont believe reserves can be frozen for a dispute like that.”
The 17 or 18 companies who have filed arbitration cases at the World Bank in Washington D.C. have filed their claims against Venezuela, not PDVSA. Those assets would indeed be in jeapordy were the majority of those cases to be ruled against Venezuela. You may be correct in that corporations would have a difficult timing “freezing” those assets through court orders, but it is surely not impossible. This is a very unusual situation in world finance, and new legal precedents may be set here. It surely bears watching. I still think Saposetty is right.
August 18, 2011 at 11:44 am
No, Octavio, PDVSA owns nothing; please read 300, 301,302,303, articles from 2000 Constitution as well as the LOH. Property rights are defined within “Republic” and not PDVSA, neither State. This issue has been largely ignored by international markets, but not only there, as well in Venezuela, people do not like to read small prints. 2000 Constitutions changed the “ambiguous” definitions of property rights (State property) from past constitutions and oil laws. The ANC (asamblea nacional constituyente) assigned property (and rights) to the “Republica”, which is logic in the believe that oil rent belongs to “fisco” or Treasury. I think I send a post with this information yesterday. I know that could sounds weird, but the constitution was written by communists.
ag
August 18, 2011 at 9:35 am
[…] Miguel Octavio watched on TV the three stooges discuss the move, It was quite comic, if not tragic, to watch the idiotic trio of Merentes, Giordani and Chavez try to explain why they were moving Venezuela’s international reserves. As I have said before, I believe the gold should be in Venezuela, not elsewhere, as a normal policy, the problem is why these clowns are making this move right now. I initially dismissed the news about the reserves being moved, there was not much to be moved besides the gold, which I did not believe would be moved (and was not the main focus of the proposal) But these guys truly plan to move the gold, never mind how much it will cost. Time to worry! […]
August 18, 2011 at 9:30 am
[…] Miguel Octavio watched on TV the three stooges discuss the move, It was quite comic, if not tragic, to watch the idiotic trio of Merentes, Giordani and Chavez try to explain why they were moving Venezuela’s international reserves. As I have said before, I believe the gold should be in Venezuela, not elsewhere, as a normal policy, the problem is why these clowns are making this move right now. I initially dismissed the news about the reserves being moved, there was not much to be moved besides the gold, which I did not believe would be moved (and was not the main focus of the proposal) But these guys truly plan to move the gold, never mind how much it will cost. Time to worry! […]
August 18, 2011 at 9:27 am
No, such decisions would be against PDVSA, not against Venezuela, I dont believe reserves can be frozen for a dispute like that.
August 18, 2011 at 9:18 am
“sapitosetty Says:
August 15, 2011 at 8:44 pm
That report says they will bring the gold to Venezuela. It may make sense from their point of view, given the likelihood of arbitration decisions in coming months.”
Sapitosetty is exactly correct.
August 18, 2011 at 9:00 am
BBC states that the reserve is some 29.9 billion USD, a figure that has moved rather little over time. This would indicate that a lot of the gold in this reserve was acquired recently otherwise the reserve would have been increasing steadily. Unless someone pinches the excess.
August 18, 2011 at 7:21 am
The coup has already happened!
What else do you need?
“Yo no tengo que pedirle permiso a nadie. Es una medida consultada, pero es una decisión soberana”
CHAVEZ = SOBERANO
Is this not caudillesco enough! Is this democracy?
August 18, 2011 at 7:47 am
Alejandro,
The original coup happened when Chavez stacked the deck in the TSJ (Supreme Court) after the Constitutional Reform.
August 18, 2011 at 12:03 pm
Sorry, we did not have a constitutional reform, we had a National Constitutional Assemble, which make a new, brand new constitution, and this make a lot of difference.
August 18, 2011 at 7:04 am
@Econ_Vzla wrote, wisely, in Twitter this week that we soon will have Golden Excedentary Reserves…
August 18, 2011 at 6:32 am
I am not saying Chavez is trading, what I am saying is that he has realized that gold reserves are so important that on the same day that he announces bringing the gold, he also nationalizes what little is not owned by the Government in the gold sector, because “he wants to strengthen reserves with our own gold”. When everyone thinks something is going up, it may be time to get off (BTW, I like gold as an investment…but I have been known to be wrong)
August 18, 2011 at 7:14 am
Your idea is valid… tech bubble and the taxi driver, joe kennedy and the shoe-shiner advicing him to buy certain stocks, etc.
GOLD 100 OZ FUTR (USD/t oz.) 1,814.500 20.700 1.15% 07:53
What should be clear is that we can’t think of Venezuela as a whole anymore, everything is reduced to the regime and its survival. Venezuela is Chavismo, and unfortunately there’s no OPEC sanctions for that and the Russians and Chinesse couldn’t care less who owns the bloody thing.
As a devil’s excrement depending regime-country not even the region matters any longer.
August 18, 2011 at 8:19 am
“What should be clear is that we can’t think of Venezuela as a whole anymore, everything is reduced to the regime and its survival. Venezuela is Chavismo”
The sudden urgency-“end game” -I fear will get uglier.
August 18, 2011 at 6:25 am
It seems that as any bank operation there’s a clearing process thus the banks will have to go to he market and buy gold. So it’s hasty to believe that Chavez is trading,.it’s political. None the less with unintended consequences, and feeds uncertainty.
I’ve checked the 1998 Russian Financial crisis. Although chavismo has been. in power for 13 years and are well prepared for anything, what worries me is a selective default of any financial obligation in dollars. The chinesse nor the russians, and to a certain extent the brazilians.will.be honored.
The problem is domestic and that where the russian crisis allows.some understanding: rationing, inflation, protests, and… probably a venezuelan version of putin is waiting…
August 18, 2011 at 6:18 am
There is no doubt that the move is to avoid sanctions when Chavez refuses to leave office and moves into repression mode. There is also no doubt that this is to facilitate stealing the last of the fungible resources of Venezuela as he marches on to make the dictatorship official and well known, same as Fidel. He will need to maintain payments for votes, military obedience and continued corruption. You only thought it couldn’t get worse before now…………..
August 18, 2011 at 6:13 am
Miguel, you are absolutely correct. This is a prelude to the coup that is about to take place. I doubt that there will be elections next year &, if there are, they won’t allow the oppos to take over.
Also if they set an early election date, like September, they will have almost 5 months to make their play.
I have very little faith that 2012 will end in our favour.
August 18, 2011 at 4:28 am
You don’t move core reserves to a liquid environment unless you are desperate. But what do 95% of the Venezuenlan population know??? No sean pendejos.
August 18, 2011 at 4:20 am
“You can bet on the second. The gold will take a few months to get here. The timing is perfect! When the Constitutional order is broken, the gold will be here and the reserves will be depleted! These guys have a plan and it goes back to the Jose Vicente intreview two weeks ago, Chavez still has doubts about democracy.”
“When the Constitutional order is broken”-Miguel- bless you, again!
I don’t know how you exposed the truth-what a calculator you have!
Thank goodness, you are workiing for the people.
This is -“the breaking point” and that time has arrived.
August 18, 2011 at 4:22 am
“Chavez still has doubts about democracy.” You think so?
Understatement of the year-ha.
August 18, 2011 at 4:15 am
They, FODEN, PDVSA, BCV are broke. Why the new Bond Issues? Chavismo is BROKE. They are all LIES. XXI IS ALL LIES.
August 18, 2011 at 4:02 am
Miguel,
I have heard that one of the reasons why Gaddafi has lasted so long – just one, of course- is that he has huge reserves of gold in Tripoli itself.
He pays and pays to whomever he needs real gold. Couldn’t that be also one of the reasons for our autocrat to do this?
August 18, 2011 at 4:01 am
The Great Faker strikes again. Chavez is red and “totally fake”. Just like with Colombia-faking his desire for a war, same with US -faking a desire for war,(Oh, the weapons from Russia-they are real -but just a “fake”front, fake show of fake force)chavistas-are a “faker movement”(-the wearing of red blends in with their -red-faced embarassment for lying-even when they look at themselves in the mirror.) [In Italian-they are called “fockers”-as in “Meet the Fockers}
It is always some strange kind of faking lies from Chavez You can see it in his eyes and every move he makes. The blind who have no taste for the truth- fall for his lies.Chavez must go. Every faking thing he has done and said is
outrageously wrong.
Every faking plan unrolled -we find out -too late-it is a fake, so wrong.
August 18, 2011 at 2:41 am
” Now that Chavez and cronies nationalize the gold industry in order to “build” reserves and they decide to bring back the gold to Venezuela, maybe it is time to sell gold”
I don’t get it, how will the movement of Venezuelan reserves affect the global gold market?. Or do you think that there will be an sudden sell off of gold by Chavez once the reserves are in Venezuela which would increase the offer and depress the gold prices?
August 18, 2011 at 5:52 am
No, this is just that people say when everyone wants to participate in a trade, it is time to get off, if Chavez thinks he knows where gold is going and wants to bet on it, time to get off!
August 18, 2011 at 1:49 am
ETF News
“While Venezuela is a relatively minor player on the world stage, this could be a big game changer here in the United States because one of the banks that holds 10.6 tons of Venezuela’s gold is none other than JP Morgan. In a recent audit of JP Morgan’s holdings it was reported that they held 338,303 ounces of gold or roughly 10.6 tons. While this is a modest size deposit it is sure to cause some jitters at JP Morgan as they scramble to find the replacement gold which has already been pledged about 100 times across various paper markets to ETF’s like the SPDR Gold ETF (NYSE:GLD).”
If true one might expect a major selloff in paper gold contracts, or they could become worthless. On the other hand, physical gold would skyrocket.
August 18, 2011 at 12:05 am
Miguel,
“As I have said before, I believe the gold should be in Venezuela, not elsewhere, as a normal policy,”
I normally bow to your superior knowledge, education, experience and so forth in the subject of economics, but I have to disagree on this one. Having the reserves stored abroad, in the U.S. or in any other country with secure and transparent storage facilities adds to transparency and confidence in said reserves. If those reserves were in Venezuela, imagine the temptation on the Government to dip into them for solution to the latest crisis de jour? Without those verifiable reserves in place, Venezuela’s bond rating would plummet.
August 18, 2011 at 9:02 am
Not just dipping into them for the crisis du jour, but dipping into them for golden parachutes. Does anyone, chavista or not, believe 100% this crew is above that? Gold reserves will simply become one more widely-questioned statistic.
August 18, 2011 at 9:53 am
agree
August 18, 2011 at 11:56 am
That is a good perception, but appart of that, we do not have to wait for that move in order to assess what I am doing wiuth these “yields” on my portfolio.
The Venezuelan fiscal crises is there, no rules govern the budget and the debt, when the “caja” shows its teeth, and it is going to be soon, the problem will not be anymore fiscal but a “cash flow crisis”.
Chavez said yesterday something very interesting, as gringos like to say, “We are in difficulties….” Chavez discovered “el hueco del macarron”….. They destroyed the basic fiscal rules, they melted down the institutional balances, we venezuelans are going to pay that price.
ag
August 18, 2011 at 12:12 pm
You collect yields until you decide to sell or the bond crashes under default and then if you are stuck you recover some. You win some, you lose some. Kodak bonds were up 8% yesterday, Venezuela is down 2% today. The day I am not comfortable, I get out. Is not deterministic, it is probabilistic and usually the probabilities are in your favor.
August 18, 2011 at 1:44 pm
I wish it would probabilistic, I do not mind to play at random!!.
August 18, 2011 at 1:47 pm
Sorry, when I write “yield” I am not talking “venda y cobre”, it is word to name particular nice “junks”. It could be understood “barato, riesgoso pero rendidor”…..
August 18, 2011 at 5:14 pm
An investor who put 100,000 dollars in the Global 2010 bond in 2008 after the crisis and switched to each new issue that venezuela came out with that was out of the yield curve, today has 220,876 dollars PLUS interest, I am too lazy to calculate the interest but it is about another 5% minimum per year. Not so random for three years
August 18, 2011 at 6:16 pm
You are right Octavio, it is not so random. He played, he got it.
However I do not like 2008, because it is not random chosen
August 18, 2011 at 6:18 pm
I did not advise my clients to invest in Venezuelan bonds (other than Petrozuata and Cerro Negro) until then. They have done this sequence and still enjoying it. Hope to get them out on time.
August 18, 2011 at 12:01 am
Time to sell?
I’m curious if anyone reading or posting here, regardless of how much they hold in paper assets, actually owns any gold?
“While Venezuela is a relatively minor player on the world stage, this could be a big game changer here in the United States because one of the banks that holds 10.6 tons of Venezuela’s gold is none other than JP Morgan. In a recent audit of JP Morgan’s holdings it was reported that they held 338,303 ounces of gold or roughly 10.6 tons. While this is a modest size deposit it is sure to cause some jitters at JP Morgan as they scramble to find the replacement gold which has already been pledged about 100 times across various paper markets to ETF’s like the SPDR Gold ETF (NYSE:GLD).”
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