Chavez Strikes First

Hugo Chavez will recall 90 percent of Venezuela’s gold from U.S. and European vaults before the Empire can steal it via sanctions. Besides, Chavez sees no need to keep paying the fees that banks charge for holding gold.

Venezuela’s central bank is the world’s 15th largest holder of gold, with 365.8 tons, of which some 211 tons, worth $12.3 billion, are held overseas.

The news caused the trading price of gold to spike upward to $1,830.00 per ounce.

In May 2011 the GEDPW (Global-Empire-of-Debt-and-Perpetual-War) hit Venezuelan state oil company PDVSA with sanctions as punishment for selling gasoline to Iran. Chavez does not want to wait for more sanctions. He sees what the Empire is doing to Libya and Syria.

Chavez had repeatedly threatened to recall Venezuela's gold from U.S. banks in the past. At a summit in 2008, he urged his Latin American allies to begin pulling their reserves out of U.S. banks, saying the USA would be hit any day with an economic crisis (which it was, right after the summit). Chavez has not called for his gold until now, because having gold in foreign banks makes the Empire more willing to do business with you, since the Empire can steal your gold any time it wants. This freedom to steal is called "financial stability."

Gold traders and logistics specialists said the transfer of 211 tons of gold – about 17,000 standard 400-ounce bars – will be one of the largest moves of physical gold in decades. While billions of dollars worth of gold is traded every day, only a tiny fraction of it moves from vaults in London, New York and Zurich. The Bank of England holds 99.2 tons of Venezuelan gold. Barclays, HSBC, Standard Chartered, and JP Morgan Chase also hold Venezuelan gold.

Mike Cundy, director of security for G4S, which along with Brink’s dominates the bullion logistics industry, said: “This is a very big one – I can’t think of another case where we’ve moved that sort of thing.”

Venezuela will need to transport the gold in several trips, since it would be impossible to insure a single aircraft carrying 211 tons. It could take about 40 shipments to move the gold back to Caracas.

The political opposition in Venezuela loudly condemned the move, since they are allied with the Empire.

Chávez will also move foreign exchange reserves before the Empire can steal them the way it stole the currency reserves of Iran (1979) Iraq (2003) Libya (2011) and Syria (2011). Venezuela’s gold will go to Caracas, but its cash reserves will be moved to banks in China, Russia, Brazil and other nations in Asia and Latin America. About $3.7 billion of those cash reserves are at the Bank for International Settlements. $1.1 billion is at Barclays Bank, and smaller amounts are held at France's BNP Paribas, Deutsche Bank, J.P. Morgan Chase, the World Bank, and the the U.S. Federal Reserve.

Chavez will also issue the decree for the nationalization of the gold mining industry. Technically it was already nationalized in 1965, but most of Venezuela’s gold fields today are in remote jungle areas near the Brazilian boarder, and are controlled by illegal wildcat producers that form a mafia of smugglers. There are no police, roads or authority, and the mafia causes severe mercury pollution. The new law will crack down on this.

Rusoro Mining Ltd. (based in Vancouver, British Columbia) is a private company that is a joint venture with Venezuela’s government. It has significant mining operations in Venezuela, producing gold at an open-pit mine and an underground mine. Its CEO Andre Agapov claims to be a friend of Chavez, and the company will not be targeted. Indeed, Chavez would like big mining companies to come in and extract the gold, but so far there are no takers. Last year he offered to let gold miners export up to 50 percent of production, from 30 percent previously. (The other 50 percent must be sold to the central bank.)

BANKS PANIC

If we use fiat currency, then why worry about where gold is located? This brings us to yet another banker scam. When you buy gold, you don’t actually own gold. You often own a “lease” on gold. Thus, JP Morgan Chase, for example, has used it’s 10.6 tons of Venezuelan gold to sell billions worth of “leases,” which in turn are bought and sold via exchange-traded funds -- i.e. investment funds traded on stock exchanges, much like stocks. And of course the bankers manipulate the ETF market.

JP Morgan Chase will have to replace that Venezuelan gold to keep its fraudulent “leases” current. If it cannot, then many exchange-traded funds will fold like the house of cards they really are. 

Incidentally, Qaddafy kept most of Libya’s gold in Tripoli, not in foreign banks, which is another reason (among many) why the Empire moved to destroy him.

From 1990-2009, banks had been net sellers of gold bullion. Now as the Empire dies, foreign central banks are buying gold to reduce their dependence on the U.S. dollar as a reserve currency. During the second quarter of 2011, central banks bought 69.4 metric tons of gold (76.5 short tons), or more than four times the 14.1 tons reported in 2010. This – plus the Empire’s death spiral – is what is driving up the price of gold.

In 2010, Mexico had only 6 tons of gold. This year the Bank of Mexico bought another 100 tons. Russia bought 26 tons, taking its total gold holdings to around 837 tons. Thailand and Kazakhstan are also buying gold. During the last two months, South Krea bought 25 metric tons. In 2009, India bought $6.7B in gold from the IMF.

All these nations want to diversify their foreign currency reserves away from the U.S. dollar. By pulling their gold out of the USA, foreign nations are signaling that they have lost confidence in U.S. financial strength.

Canada is not keeping up. Before 1980, Canada had 653 metric tons of gold, but sold all of it to exploit the “sizzling” price of gold  at $350 per ounce. Today the Bank of Canada has only 3.4 metric tons, which ranks No. 80 in the world on the list of officially reported gold reserves, according to the World Gold Council. A motherlode of gold remains buried under Canadian soil, but the beneficiaries of that stash will be mining and exploration companies and their shareholders, not taxpayers. (If you distribute proceeds from State resources to the masses, like Qaddafi did, you get bombed.)

In England between 1999 and 2002, Gordon Brown, as Chancellor of the Exchequer, sold off 60 per cent of England’s gold at $275 per ounce, or a seventh of what it trades for today. As a reward for his stupidity, Brown was made prime minister in June 2007.

The central banks of Switzerland, Australia, Denmark, Spain, Portugal, Norway and Sweden also sold their gold, mainly to Asian countries.

The USA supposedly has 8,943 tons, worth more than $468 billion at current market prices. Germany supposedly has 3,749 tons. That’s U.S. short tons of 2,000 pounds, not metric tons. A metric ton is 1,000 kilos, or 2,204 pounds. The IMF supposedly has 2,847 tons.

I say supposedly because the U.S. government has not had a genuine audit of its gold holdings since the 1950s. America’s 8,943 tons are probably not gold, but bullshit. No one gets to see inside Fort Knox. Ever. No Congressman can see. I doubt the bankers would allow even the U.S. President to see.

In recent years the government changed the description of gold holdings in reports so that now it is only described as "custodial gold" rather than physical gold reserves. The so-called experts such as the World Gold Council, GFMS, and CPM Group do not include the appearance of all these gold supplies in their reports on global gold supplies and demand, which makes their analyses grossly inaccurate.

Several gold traders have commented that a surprising number of coin melt gold bars were being delivered in London and Zurich markets, bars which almost certainly came from the U.S. Treasury vaults. That means foreign central banks are pulling out of the dying USA.

A return of any form of gold standard – by which the value of currencies is directly linked to gold – is unlikely. But as fraud, debt, and war consume the Western Empire, gold is definitely reclaiming is place at the heart of the financial system, and Chavez decided not to wait for the Empire to strike first, as it has Libya.

Don't be surprised if the Empire says it "lost" some or all of Venezuela's gold. In late 2008, $15.3 million worth of gold, silver and other precious metals vanished from the vaults of Royal Canadian Mint, which produces coins for at least 12 other nations. On 29 June 2009 the Mint said it was stolen. No one knows who pulled off the heist. Mint spokesperson Christine Aquino said the police were not consulted, since this was an “internal matter.”

In Feb 2011, 75 Australian gold bars were stolen in Canada, and remain missing.