A few days ago we penned "As Chavez Pulls Venezuela's Gold From JP Morgan, Is The Great Scramble For Physical Starting?" in which, logically, we wondered if the unwind of the great gold cartel, whose purported price manipulation has always resided in the domain of paper, or confidence-based, precious metals, may have started from the most unexpected source: Venezuelan dictator Hugo Chavez who just announced that he will not only nationalize the country's gold industry but reclaim his physical gold (however much of it may exist) from custodians such as JP Morgan and Bank of Nova Scotia. The practical implications of this move are substantial- since then gold has seen record high after record high. Whether one attributes these moves to Chavez, or to yet another global "risk-flaring" episode is unclear. Luckily, Grant Williams, author of the always entertaining "Things That Make you Go Hmmmm", provides some very fascinating observations on this very interesting topic...
From the full note (presented below):
To sum up:
- It is common practice for most Central Banks to hold part of their gold reserves overseas in ‘gold trading centres’ (read London and New York)
- One of those Central Banks - that of Venezuela - wants its gold back
- That means that a group of banks (mainly in the UK and the USA) who are supposed to have that gold in their vaults need to GIVE it back...
- ...which in turn could potentially trigger a race to repatriate national gold holdings
- Neither Fort Knox nor the Federal Reserve (the world’s two biggest gold depositories) have been independently audited in recent times
- The status of the gold held in the Bundesbank (home to the world’s third-largest hoard) is somewhat unclear
- The practice of leasing gold by Central Banks has been going on so long that it even predates the time when Alan Greenspan advocated sound money
- The gold ‘physical market’ is approximately 100 times the size of the amount of actual underlying metal by which it is purportedly backed
- The top four bullion banks, or ‘commercials’ on the COMEX continue to run what we shall politely call ‘significant’ short positions (chart above)
In the three trading sessions since Chavez made his announcement on August 17th, gold has added almost $100, coming within a whisker of $1,900 before settling back at another record weekly close.
Market weakness? Maybe. Fear of further problems in Europe? Quite possibly. Continuing disgust with the world’s fiat currencies? Highly likely.
The beginning of a race amongst the world’s Central Banks to grab physical gold? Now THAT would be something to see...
On November 25, 2011, BBC News reported "Chavez repatriates Venezuela's foreign gold reserves." The amount of gold Chavez requested was "around 160 tonnes of gold, worth more than $11bn."
Three months earlier, on August 25, 2011, Reuters reported that "There are gold reserves worth $10 billion in Tripoli."
The big event that happened between August 25th and November 25th was the death of Gaddafi.
It is very possible that the private central bankers in Europe and the United States confiscated Libya's gold and gave some of it to Venezuela. The amount of gold that Chavez received in November and the amount of gold that Reuters reported was in Tripoli in August is the same: 10 billion dollars.
The claim that the U.S.-NATO wars in the Middle East and the war against Libya are about gold and oil has been backed up with evidence time after time. The proof is in the pudding, as they say.
Washington's Blog wrote a post on January 13, 2012 called "Are The Middle East Wars Really About Forcing the World Into Dollars and Private Central Banking?"
On August 22, 2011, Washington's Blog said that a central motivation for NATO's invasion of Libya was the fear by the central bankers of Gaddafi's plan to nationalize oil reserves and use his gold reserves to develop Africa. He was "Challenging The Supremacy of the Dollar and Western Banks." Washington's Blog wrote:
"Ellen Brown argues in the Asia Times that there were even deeper reasons for the war than gold, oil or middle eastern regime change.
Brown argues that Libya - like Iraq under Hussein - challenged the supremacy of the dollar and the Western banks"
In May 2011, the YouTube channel StormCloudsGathering posted an informative video called "The real reason for the Libyan war - The Gold Dinar."
I wrote about the threat to the Federal Reserve's fiat petrodollar system that was posed by the Taliban and Saddam in 2000 in my article on January 15 called, "Money Over God, Power Over Country: 9/11, The Almighty Dollar, And The Betrayal of American Values."
In this video on 108morris108's YouTube Channel called "Syrian - Regional War Looming," the guy who goes by the name of Syrian said that he believes NATO and the U.S. invaded Libya to take its gold because they didn't have the gold that was requested by Chavez and the Venezuelan state. Although he added that this is only speculation on his part. He said:
"The U.S. is on its knees. The U.S. dollar is probably going to collapse very soon. And they're trying everything they can, they're pulling off every trick in the book to do it. In Libya one of their main aims was to steal vast array of gold reserves inside Libya. And Chavez requested his gold back. And it's only when they took Tripoli that they finally fulfilled Chavez's order. Before they were refusing. So my speculation is that they had to take Gaddafi's gold to give it to Chavez. Because their vaults are empty. . . The whole thing is a scam." (10:00 - 11:00).What the Syrian suggests is probably what happened. The Federal Reserve has no gold reserves. It is not Federal and it doesn't have any reserves. The Fed is a monumental and epic fraud that can only be maintained by naked force.
Mac Slavo of SHTFplan.com wrote an important article on June 6, 2011 called "Federal Reserve Admits: We Have No Gold." Slavo wrote:
"The following exchange between Congressman Ron Paul (R-TX) and the Fed’s attorney Scott Alvarez proves, without a shadow of a doubt, that The Federal Reserve has no gold backing the US dollar.
Our currency is not only not backed by gold, but in the event of a dollar meltdown the only assets backing the world’s reserve currency are worthless toxic mortgages purchased by The Fed in recent years from insolvent banking institutions.
The only thing holding this thing together at this point is market confidence. When that goes, everything else goes with it."
Read this CNN article from June 24, 2011 called, "Ron Paul worries Fort Knox gold is gone," and watch this video - Federal Reserve Admits: We Have No Gold!