No gold for you! The Bank of England has refused to give Venezuela its gold back. Wait until you read the reason why…
Earlier in the week I reported on Venezuela’s request to repatriate its 14 tons of gold held in Bank of England vaults.
We have an update to that request, from The Times (bold added for emphasis):
President Maduro of Venezuela is trying to repatriate at least 14 tonnes of gold held at the Bank of England, fearing that access could be frozen under US sanctions against his regime.
The Bank has refused to release the gold bars, worth about £420 million, according to sources. British officials are understood to have insisted that standard measures to prevent money-laundering be taken — including clarification of the Venezuelan government’s intentions for the gold.
There are concerns that Mr Maduro may seize the gold, which is owned by the state, and sell it for personal gain.
So there you have it. Nicolas Maduro, according to the Bank of England, “may seize the gold…and sell it for personal gain”.
Rant on –
Because corrupt people in positions of power in the US and the UK have never done anything for personal gain…
– Rant off
What do we know that Venezuela has done with at least some of its gold?
We know that Venezuela has used its gold as a sanctions work-around to purchase food from Turkey as Venezuela struggles with hyperinflation, and even worse, outright starvation. Now I get it – some people have said, “But Half Dollar, that food goes to the corrupt elite of Maduro’s inner circle, and then it barely works its way down the totem pole”.
That is a valid point, but I would ask this: Even if only some of the food bought from Turkey with gold made it to the Venezuelan people at street level, wouldn’t that be a good thing?
There is another, perhaps more important point here too: If you don’t hold it, you don’t own it.
What if some other country, for whatever reason, has some gold “held” in BOE vaults, but said country gets on the West’s “bad” list because they get hemmed-up doing business with Venezuela, or Iran, or some other nation subject to US imposed sanctions? Wouldn’t other nations wonder whether they could get their gold back from BOE vaults, and if so, wouldn’t nations that have their gold held in BOE vaults want to preemptively repatriate their gold?
You see, over 30 nations have gold holdings in BOE vaults:
Is it possible that Greece, or Bolivia, or Ecuador, or Brazil, or the Philippines, or some other nation could be at risk of losing their gold held by the Bank of England?
These are valid questions.
And I know I jumbled those questions, but the point is important, so I’ll say it in simpler terms: Because the BOE has denied Venezuela its gold, other nations may start to wonder if they will be able to get their gold back that’s held in BOE vaults. I mean, If I held my gold at Little Johnny’s Gold Vaulting Service, and my buddy was denied his gold from Little Johnny, I might want to go ahead and get my gold back from Little Johnny, and put my gold into my own hands for my own safekeeping.
Here’s the thing: Venezuela owns 14 tons of gold, but it is held in Bank of England vaults, and now we see that the rules have been changed on Venezuela, and now Venezuela doesn’t have access to what is rightly its own property. Not only that, but Venezuela no longer has access to a very important lifeline, a lifeline that has been, for thousands of years, the ultimate currency that speaks no language and knows no borders.
Unless, of course, the language is “US sanctions”, and the borders are the “walls of the Bank of England’s gold vault”.
If that’s the case, I’m sorry.
I think it was Ayn Rand who said something to the effect of, “if you can’t stand on top of it and protect it with a gun, then you don’t own it”.
Gold, in a safe and secure location, within easy access to the owner, and without having to go through some third party to access it, is, in my opinion, the best way to go.
That applies to silver too.
This is especially true if a person has only a very small amount of gold or silver.
Now sure, if one’s stack is a lot fatter than ‘Ol Half Dollar’s humble stack, then diversifying with some sort of off-shore or off-site storage may make sense, but when push comes to shove, both figuratively and literally, each person will want to be in direct control of his or her own metal.
Or you may just hear the four worst words a gold owner could hear: NO GOLD FOR YOU!
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.