Venezuelan Central Bank Sells Gold In Secrecy

September 26, 2012

While I have no problem with a Central Bank selling gold from its reserves if it deems that this is the correct investment decision, the news that Venezuela had sold about 1% of its gold reserves is another example of how this Government does not have any accountability and how the move to bring the reserves to Venezuela was simply political grandstanding by Hugo Chavez.

First of all, we would have never found out about this, if the much hated International Monetary Fund had not published its annual financial statistics, showing that Venezuela sold about 3.6 Tons of gold. Since we don’t know when this happened, we don’t know how much money it was, but it is roughly US$ 180-190 million, pocket change for a Government that has thrown away billions in Chavez’ petty cash fund, called Fonden.

But the fact that the gold was sold after it was brought back to Venezuela purportedly to “protect” the gold reserves shows how cynical Merentes, Chávez and Giordani can be. Somehow, on the way back, or before the reserves came to Venezuela, they sold “only” 3.633 Tons of gold. Interesting that it was the old Venezuelan leaders that never sold gold and this Government that fills its mouth with words such as “sovereignty” and the “people’s gold” in defense of the gold reserves that went out and sold some for the first time in 30 or 40 years.

Gold reserves have saved the day for the Chávez administration. As gold prices went up, reserves dropped, but remained at a high level. Very recently, the Central Bank even changed how it accounted for the gold in order to make reserves look better. As I said, the whole show of moving the reserves was a signal that we should be worried, this is proof that I was right and it make get worse if Chavez wins on October 7th. As Chavez says, this was all for show, but not they have begun selling the family jewels in secrecy. The Faja, the mining projects, the concessions can all be reversed, but gold sold and money spent is simply no longer there (or here).

So much for caring about the people and sovereignty from a Government without scruples!

33 Responses to “Venezuelan Central Bank Sells Gold In Secrecy”

  1. NicaCat56 Says:

    I can hear the PSF’s already screaming, “Conspiracy!”, “Meddling!”, “Injerencia!”…

  2. Mike Says:

    Watch out for your gold fillings in your teeth. They may be expropriated.

  3. Luisa Mosquera Says:

    unbelievable!!!! by the time Capriles takes over in january, they will have probably taken it ALL over to Cuba!!!

    • CharlesC Says:

      “they will have probably taken it ALL over to Cuba!!!” When you have no accountability and trust, all that is left is rumors and conspiracy theories.
      I believed one concerning Chavez and the gold and I think maybe that explains why things happened the way they did:
      The Pope visiting Cuba-was not going to meet Fidel Castro, was not going to meet Chavez. But, he did- and some claim the Pope “gave Castro and
      Chavez his blessing” ( couldn’t bless Raul, though- haha).[ Seriously, Chavez seems to buy everyone -Kirchner, even maybe Santos to a degree...the list is long.] Anyway, that really disgusted me- the Pope playing around with two of the most evil men on the earth, I believe..

      Back to reality- who bought the gold?

      • CharlesC Says:

        Sorry for not clarifying- the rumor is/was that Chavez donated a large amount of gold to the Catholic Church on behalf of himself and Castro.

        • leo Says:

          Where is your proof for this rumor? and what makes you think the Pope can be bought? And that the Pope would give his blessing too these men? The Pope has done a lot of good and sacrificed his life to serve God and for people what makes you think he would throw away all his years and years of work for some gold? Sounds to me like you have an Anti-catholic bias!

  4. Carolina Says:

    Surprised?
    We all knew this was going to happen when they brought the reserves back to Venezuela. How sad is that.

  5. Dr. Faustus Says:

    Let me point out what is really scary here. Why did the central bank feel the ‘need’ to sell their gold assets? No more money left in Fonden? Bandes? The selling of even a small amount of gold describes a government with a ‘pawn shop’ mentality. Wow.

  6. cacr210 Says:

    Misión raspando la olla.

  7. Andres F Says:

    I’m surprised they have only sold 1%. I guess if Chavez didn’t feel certain about winning the elections, he would have sold more by now.

  8. Roger Says:

    Why buy Venezuelan Bonds when you can buy Gold? Wonder what the exchange rate was?

  9. bobthebuilder Says:

    Where is the rest? Adourning some palacial Simon Bolivar-esque residence?

  10. Mediocriollo Says:

    Miguel, the $ amount is correct, but they sold 3.7 tonnes leaving them with 362 tonnes.

  11. Maynard Says:

    Wait a minute. I’m surprised at moctavio. 362 tons of gold is a huge amount, probably the total quantity in BCV’s vaults (see world-gold-reserves) . And their value is more like $18 bn than $180 M…

  12. Roy Says:

    We are going to have to face it. Capriles will inherit a government with no reserves, empty bank accounts, failing infrastructure, and a mountain of debt.

    • Pedrop Says:

      Well that’s what happens when a DGI recruit makes his way to the top. Don’t expect the best I suppose.

    • Mike Says:

      If he succeeds in stabilizing the country politically, and if he goes economically predominantly “invisible hand / Smith”, the private investment that will flow back into Venezuela will far outweigh the temporary financial problems of the government. Venezuela is indestructible, if it’s resources are used properly.

      • Roy Says:

        I agree. Venezuela can be rebuilt. We just shouldn’t have any illusions about how fast it will happen, and what the impediments to progress will be. The new government is going to have its work cut out for it.

  13. Ronaldo Says:

    That makes total gold reserves worth about $18 to 19 billion dollars. It is all unaccountable. Chavez and his 40 thieves could walk away with it all. This may become the biggest gold theft in the history of the planet. Chavez brought the gold to Venezuela so he could steal it easier.

    Just look at Chavez caressing a gold bullion bar with a shit-eating grin in this photo-http://wtaq.com/news/articles/2011/aug/23/venezuelas-chavez-says-gaddafi-still-libyas-leader/ Chavez knows he just hit the biggest jackpot ever. This is not the people’s gold, it is all for Chavez.

    Some may go to Cuba, but more will go to Iran, North Korea, and Chavez family Swiss Bank accounts.

  14. island canuck Says:

    Miguel Angel Santos ‏@miguelsantos12
    Dada la caída de 12.7 toneladas (3.2%) de reservas en oro desde dic-2010 hasta ago-2012, es evidente que el BCV vende más de lo que compra

    The difference appears to be some 12.7 tons since 2010

  15. oso negro Says:

    Saw an AN-124 really straining to get into the air about 6 weeks ago from BLA. This was my first thought; heavily laden with gold, but then I don’t think there is gold being kept in BLA or PLC.

  16. Odette Says:

    I dont think they sold it.. this much would have made more of a difference in the market value. Just like when Portugal, trying to get out of debt card, sold some of its reserve… look under Fidels bed … it maybe there…. (get-a-way-buy-my-protection-reserve)… just a thought

    • NorskeDiv Says:

      Portugal sold a big chunk at once. Chavez will probably follow the same path of Peron and gradually sell the reserves a little bit at a time. Furthermore, the quiet nature of this sale prevents the market from reacting in the same manner.

      Chavez will also probably fellow Peron’s example and sell gold as “new production” from Venezuela’s gold mines – watch carefully for any surprising increase in Venezuela’s gold production. Gold is the worst asset for an unreliable government to hold, by its nature it is fungible, can be melted down and enter the general market with no one the wiser. Venezuelans would be much better off having government reserves in the form of Chinese or US bonds, whose sale is necessarily public and traceable.

      Gold is the most secure asset in a stored value sense, but the least secure in any other sense.

  17. Rene Says:

    These guys ran out of cash, this explains why the black market for dollars has been dry for the last few months and the delays in cadivi/sitme. There will be shortages and rampant inflation in the next few months. These incompetetnt cleptocrats not only blew over a trillion dollars but they are leaving us heavily indebted.

  18. alexander Says:

    Moctavio, there are far better arguments to analize and explain such issue of selling monetary -reserve- gold. Nothing to do with repatriation, or hiding the sale, the IFS from IMF, every month, publishes the stock of gold of every country in the world -if member of IMF- since the monetary gold market is fully regulated by IMF. Reading those statistics every month, every economist or financial analist must read them, we find the stocks level. WGO as well takes care. As well as BIS (Bank of International Sttlements) from Basilea, Switzerland, a kind of “central bank” of central banks.


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