Venezuela Wants $1.2 Billion in Gold Back From Bank of England
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https://finance.yahoo.com/news/u-k-deny-maduro-apos-191145322.html
Patricia Laya and Ethan Bronner ,Bloomberg•January 26, 2019
Venezuela Wants $1.2 Billion in Gold Back From Bank of England
(Bloomberg) -- Nicolas Maduro’s embattled Venezuelan regime, desperate to hold onto the dwindling cash pile it has abroad, was stymied in its bid to pull $1.2 billion worth of gold out of the Bank of England, according to people familiar with the matter.
The Bank of England’s decision to deny Maduro officials’ withdrawal request comes after top U.S. officials, including Secretary of State Michael Pompeo and National Security Adviser John Bolton, lobbied their U.K. counterparts to help cut off the regime from its overseas assets, according to one of the people, who asked not to be identified.
The U.K. followed the U.S. and other countries on Wednesday in recognizing Juan Guaido, the National Assembly leader, as the legitimate president of Venezuela. Maduro, an authoritarian ruler who’s overseen the country’s collapse into economic chaos, refuses to give up power, though, and has the backing of the military. The European Union threatened to recognize Guaido unless a “credible” presidential election is called with eight days, according to a draft statement seen by Bloomberg.
The U.S. officials are trying to steer Venezuela’s overseas assets to Guaido to help bolster his chances of effectively taking control of the government. The $1.2 billion of gold is a big chunk of the $8 billion in foreign reserves held by the Venezuelan central bank. The whereabouts of the rest of them is largely unknown. Turkey, though, has emerged recently as a destination for freshly mined Venezuelan gold.
The U.S. is leading an international effort to persuade Turkey -- a key Maduro backer, along with Russia and China -- to stop being a conduit for these gold shipments. Europe’s shift of position clarifies the international battles lines over Venezuela and aligns key powers such as Germany, France and Spain more closely with the Trump administration.
Free Elections
“We want democracy and free elections in Venezuela,” Spanish Prime Minister Pedro Sanchez said Saturday. “I want to state absolutely clearly that if within eight days, fair, free and transparent elections are not called in Venezuela, Spain will recognize Juan Guaido as president.”
Retrieving the gold in the Bank of England has been a major priority for the Maduro regime for weeks. Back in mid-December, Calixto Ortega, the president of Venezuela’s central bank, led a delegation to London that sought to gain access to it, according to two people with knowledge of the matter.
But those talks were unsuccessful, and communications between the two sides have broken down since. Central bank officials in Caracas have been ordered to no longer try contacting the Bank of England. These central bankers have been told that Bank of England staffers will not respond to them, citing compliance reasons, said a Venezuelan official, who asked not to be identified.
Gold Legacy
The Bank of England declined to comment on its handling of Venezuelan assets, saying it “provides banking services – including gold custody services – to a large number of customers” and “does not comment on any of those relationships.”
When asked about the fate of Venezuelan assets abroad Friday, Pompeo declined to comment, as did a spokesman for the National Security Council. The Treasury released a statement saying that the U.S. “will use its economic and diplomatic tools to ensure that commercial transactions by the Venezuelan Government, including those involving its state-owned enterprises and international reserves, are consistent with” its recognition of Juan Guaido as the interim president of Venezuela.
A press official for Maduro declined to comment.
Gold has formed a crucial part of Venezuela’s foreign reserves for years. Hugo Chavez, the late socialist leader and mentor to Maduro, plowed much of the country’s oil wealth into gold in part because of his disdain for the U.S. dollar. In 2011, Chavez ordered the repatriation of $11 billion worth of gold bars from the Bank of England and other foreign institutions. As Venezuela fell deeper into economic crisis years later, though, the Maduro regime began selling them off to raise the cash it desperately needed to fund imports and to try, unsuccessfully, to avoid defaulting on its foreign debt.
"The first rule of business as we speak is to stop the Maduro government from liquidating international assets of the country and steal them," Ricardo Hausmann, a Harvard economics professor and long-time critic of Maduro who’s been speaking with Guaido, said in an interview Friday.
(Updates with EU call for free election in third paragraph, Spanish prime minister’s comment in sixth.)
--With assistance from Eric Martin, Alex Vasquez, Fabiola Zerpa, Nick Wadhams, Jill Ward, Tim Ross, Nikos Chrysoloras and Charles Penty.
To contact the reporters on this story: Patricia Laya in Caracas at playa2@bloomberg.net;Ethan Bronner in New York at ebronner@bloomberg.net
To contact the editors responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net, ;Daniel Cancel at dcancel@bloomberg.net, Tony Czuczka, Steve Geimann
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Comments
Repatriation should be the norm to stabilize government. Not that the gold standard will ever return.
what they need down there is a new Simon Bolivar
Do the same thing they do. Be corrupt and don't pay them.
There's always counter party risk when someone else holds your gold. Maduro should nationalize every British asset in the country.
"War, regime change, what is it good for."
"The Bank of England’s decision to deny Maduro officials’ withdrawal request comes after top U.S. officials, including Secretary of State Michael Pompeo and National Security Adviser John Bolton, lobbied their U.K. counterparts to help cut off the regime from its overseas assets."
In the meantime Britain has asked the US not to honor any of the US bonds sold to China. LOL
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
I don't know why the BoE is putting up such a fuss over gold. You can't eat it, and it doesn't pay interest. That's what I always hear from the banking cartel's advocates.
I knew it would happen.
Interesting reading, thanks for sharing !!!
Maybe because Maduro would like to convert it into something more useful, like bullets or perhaps a palace on the French Riviera.
Knowledge is the enemy of fear
The gold standard never really left. That is why governments still store it, with the exception of Canada. I own more gold than Canada.
I've never seen a $100 bill pay interest either.
It's a nod towards USA and others' thinking that Maduro and those higher up in the public food chain will find a way to loot "the peoples' money."
The uk, USA and others are "concerned."
Countries better be cautious about who holds their gold.
If I had gold stored at the BoE right now, my reaction would be "what the hell was I thinking when I stored it there?"
I knew it would happen.
Did I read some years ago that China took charge of London's Metals Exchange , or was that fake news ? A bit off topic but was reminded of this with the term "looters".
The Chinese state-owned ICBC Standard Bank (IDCBF), the world's biggest bank by assets, has agreed to buy Barclays precious metals storage business, including its state-of-the-art storage facility in London.
The Chinese also bought JPM's NY massive underground gold vault
The former JPM vault is literally connected by underground tunnel to the NY Fed’s gold vault.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Thanks for that , DerryB.
Interesting. Thanks for sharing.
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