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July 06, 2013


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Venezuela wasn't actually alone in repatriating gold.



Moreover, I'm pretty sure that one of the, if not the motivation for Chavez' repatriation had to do with the whole standard international immunities for some countries but not for others. Libya and Iran's reserves were certainly not immune to being frozen.

To tell you the truth, I think the amount of trust has gotten very thin out in there anarchic world system, and many countries are dealing with problematic gold flows independent of what national policies are, let alone what central bankers do.

I always read any article about Venezuela with a dyspeptic eye, as you well know, and my first question is always, well, are other countries like Venezuela suffering from dollar squeezes as well? Yes? Well, is Venezuela suffering more than most? Perhaps so, given just how much of their reserves are in gold--as a long term result of accumulating gold reserves, not repatriation, per se. You know, I kinda have to read Isabella K's columns about what people actually were doing with gold as it went up, and it's late right now...Oh, I couldn't help myself...Hmmmm, gold prices declined as a proportion to carry trades, collateral, etc, and it declined as the US dollar rose. What's interesting is that she notes that the central banks as a whole, are buying more gold, theoretically to keep the markets stable by preventing further declines.

Eeeehh, not really sure what to make of V's strategy, as usual, and with the usual guess that Chávez was being excessively conservative and security-minded, like those grannies buying utility stocks and low coupon bonds.

Re Germany: Sweet Mary mother of God. I knew that the German response to the eurocrisis has not been entirely driven by rational self-interest; I did not know that the irrationality was that deep.

Thing is, that doesn't make Venezuela look any better; it just makes Germany look worse.

Doug, do you what was going on with that bit of German goldbuggery?

I have had the sneaky thought that there perhaps was a quiet scandal with individuals involving central banking reserve gold in trades when they should not have.

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