While I have no problem with a Central Bank selling gold from its reserves if it deems that this is the correct investment decision, the news that Venezuela had sold about 1% of its gold reserves is another example of how this Government does not have any accountability and how the move to bring the reserves to Venezuela was simply political grandstanding by Hugo Chavez.
First of all, we would have never found out about this, if the much hated International Monetary Fund had not published its annual financial statistics, showing that Venezuela sold about 3.6 Tons of gold. Since we don’t know when this happened, we don’t know how much money it was, but it is roughly US$ 180-190 million, pocket change for a Government that has thrown away billions in Chavez’ petty cash fund, called Fonden.
But the fact that the gold was sold after it was brought back to Venezuela purportedly to “protect” the gold reserves shows how cynical Merentes, Chávez and Giordani can be. Somehow, on the way back, or before the reserves came to Venezuela, they sold “only” 3.633 Tons of gold. Interesting that it was the old Venezuelan leaders that never sold gold and this Government that fills its mouth with words such as “sovereignty” and the “people’s gold” in defense of the gold reserves that went out and sold some for the first time in 30 or 40 years.
Gold reserves have saved the day for the Chávez administration. As gold prices went up, reserves dropped, but remained at a high level. Very recently, the Central Bank even changed how it accounted for the gold in order to make reserves look better. As I said, the whole show of moving the reserves was a signal that we should be worried, this is proof that I was right and it make get worse if Chavez wins on October 7th. As Chavez says, this was all for show, but not they have begun selling the family jewels in secrecy. The Faja, the mining projects, the concessions can all be reversed, but gold sold and money spent is simply no longer there (or here).
So much for caring about the people and sovereignty from a Government without scruples!