In a move to protect Venezuela from the economic woes in the United States and Europe, President Hugo Chavez is going to Nationalize Gold Mines and bring back all of its gold held overseas. Chavez said, “We’re going to bring back our gold to the Central Bank.”
Venezuela is currently ranked 15th in the world for gold holdings at $20.64 billion (403.1 tons), $11 billion of which is held overseas. It has been storing gold in both Europe and the United States for years. With the concerns surrounding both of those economies, President Chavez feels it will be safer to keep the gold at Venezuela’s central bank. Central bank President Nelson Merentes had this to say, “At the time of these disturbances, it’s preferable to recover our assets, in this case the gold, and have it here in our vaults.” President Chavez has been warning that he was going to do this since 2008.
In addition to bringing the gold back home to Venezuela, they are also going to diversify their foreign reserves into more “countries that have more solid economies” like China, according to Merentes.
Chavez will also be nationalizing the gold mines in Venezuela in order to stock up on more gold at their central bank. They want to increase control over production and allocation. This is a real easy way for Venezuela to increase their gold holdings.
Many central banks around the world are stocking up on gold in a bid to protect their assets against inflation and economic instability. Some of the brightest minds in these countries are doing what they think is best for their own economic survival. This is further proof that gold is real money. In fact Venezuela is calling gold part of their “foreign reserves.” Makes me laugh when I think about Bernanke’s comment a few weeks ago when he said that gold is not money and that central banks only buy it because its tradition. Seems to me central banks have been buying and selling gold for decades based on what is going on in the economy.
If central banks are using gold to protect their assets shouldn’t you? I ask this question all the time because a very small percentage of Americans own any gold. I have heard that the figure is less than 3% of Americans. When the public catches on to what the central bankers already know and starts buying gold even as more countries start to nationalize gold mines.