In August Venezuela’s President Hugo Chavez announced that he would be repatriating the foreign-held gold reserves in American and European banks and they received the first shipment of gold from European countries on Friday.
The Venezuelan central bank reports that about $300 million in gold was brought in to Caracas by plane and they plan to bring 160 tons held abroad back to Venezuela.
The president of the central bank, Nelson Merentes said that the first shipment came from “various European countries” by way of France and called the arrival of the gold bullion a “historic” moment for his country, according to the Wall Street Journal.
Hugo Chavez said, “Now [the gold] will go to a place from which it should have never left: the central bank vaults [in Caracas]; not those in London or in Europe, but our own land.”
This is likely quite a good move as Western banks are becoming increasingly exposed to massive amounts of derivatives and sovereign debt crises that are wracking several economies.
These crises very well might be engineered by central banks and their “too big to fail” cronies just as the crash in 2008 was, and Chavez might preempting a possible gold run by demanding physical delivery of his gold now before there is no gold to deliver.
While Merentes would not give the specific number of tons of gold brought shipped to Venezuela on Friday, he said that the shipment was worth roughly $300 million.
This comes as U.S. stocks see the worst Thanksgiving drop since 1932 and all indicators show the European sovereign debt crisis continuing to worsen.
Chavez’s repatriation of gold reserves is part of his initiative to nationalize the Venezuelan gold sector, something which the Wall Street Journal says “puzzled economists.”
The Wall Street Journal published speculation that it could have to do with internal arbitration cases involving nationalizations and Venezuela seeking to prevent having their assets seized abroad.
They claim that it reduces transparency and would “raise more questions over the central bank’s declining reserves.”
How exactly they know the status of the reserves is not said, and Venezuelan figures posit a much more logical explanation for the move.
Venezuelan officials said that they were seeking to minimize exposure to the overly indebted Western economies of the United States and Europe, while leveraging the highprice of gold that only seems to be rising.
They also said that they were seeking to invest in developing allies like Russia and China which have also been investing in the Venezuelan economy and continue to grow at rates not seen in the West.
There has also been a steady attack on Chavez coming from the United States and the West in general so his choice to demand his gold now prevents Western nations from seizing his assets held abroad as they did to Gaddafi.
The Wall Street Journal does seem to be able to pin down a number of how much gold Venezuela actually has.
First they say that before Friday, Venezuela held nearly $11 billion worth of gold, or 211 tons, out of 365 tons of reserves stored in banks in the United States, Canada and Europe.
According to the World Gold Council, Venezuela holds the 15th-largest gold reserves andChavez said, “It’s the economic reserve for our kids. It’s growing, and it’s going to keep growing, both gold and economic reserves.”
Unfortunately you’ll never hear Bernanke or one of the countless criminal Western banksters saying such things, all they care about is robbing us blind and making sure we are enslaved by debt for generations to come.
That is not to say that Chavez is a saint, but the fact that a leader would even talk about working for the well being of his people is something wholly foreign to someone like myself in the United States.
“Venezuela is going to become an economic power, not for the bourgeois or capitalism, but for the Venezuelan people,” Chavez added.
Later, they say that the Central Bank of Venezuela holds 154 tons of gold bullion domestically, a number considerably different from the 211 tons cited earlier in the article.
Regardless, the Venezuelans seem to see the writing on the wall, with American stocks seeing the worst loss during the Thanksgiving week since 1932, Belgium getting its credit rating slashed and reports saying Greece is telling bondholders they will have to accept larger losses.
This fueled the pervasive concern that the European debt crisis is worsening and treasuries fell in response.
The S&P 500 continued to slump for the seventh straight day in a row, marking a weekly drop of 4.7% and a daily loss of 0.3%.
The euro declined as well, losing 0.9% along with the S&P GSCI commodity index dropping 0.3% with Bloomberg reporting, “The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments lingered near a record, up 6 basis points at 386.”
The signs are not looking good and Chavez demanding physical delivery of his gold just reflects the global awareness that something is seriously wrong with the world economy and it is not getting better any time soon.