3rd Asia Pacific Precious Metals Conference on 09-11 June 2019 at PARKROYAL on Beach Road, Singapore..., Mark your dates for 16th India International Gold Convention on 01-04 Aug 2019 at Amritsar, Punjab...
 You are here : Home > Gold News
 
 
How Venezuela turns its useless bank notes into gold

How Venezuela turns its useless bank notes into gold

February 11, 2019

 

Venezuela’s most successful financial operations in recent years have not taken place on Wall Street, but in primitive gold-mining camps in the nation’s southern reaches.With the country’s economy in meltdown, an estimated 300,000 fortune hunters have descended on this mineral-rich jungle area to earn a living pulling gold-flecked earth from makeshift mines.Their picks and shovels are helping to prop up the leftist government of President Nicolas Maduro. Since 2016, his administration has purchased 17 tonnes of the metal worth around $650 million (501.85 million pounds) from so-called artisan miners, according to the most recent data from the nation’s central bank.

 

Paid with the country’s near-worthless bank notes, these amateurs in turn supply the government with hard currency to purchase badly needed imports of food and hygiene products. This gold trade is a blip on international markets. Still, the United States is using sanctions and intimidation in an effort to stop Maduro from using his nation’s gold to stay afloat.The Trump administration is pressuring the United Kingdom not to release $1.2 billion in gold reserves Venezuela has stored in the Bank of England. U.S. officials recently castigated an Abu Dhabi-based investment firm for its Venezuela gold purchases, and have warned other potential foreign buyers to back off.

 

The existence of Maduro’s gold program is well-known. How it functions is not.To get a glimpse inside, Reuters tracked Venezuela’s gold from steamy jungle mines, through the central bank in the capital of Caracas to gold refineries and food exporters abroad, speaking with more than 30 people with knowledge of the trade. They included miners, intermediaries, merchants, academic researchers, diplomats and government officials. Almost all requested anonymity because they were not authorized to speak publicly, or because they feared retribution from Venezuelan or U.S. authorities.

 

What emerges is the portrait of a desperate experiment in laissez-faire industrial policy by Venezuela’s socialist leaders. U.S. sanctions have hammered the nation’s oil industry and crippled its ability to borrow. The formal mining sector has been decimated by nationalization. So Maduro has unleashed freelance prospectors to extract the nation’s mineral wealth with virtually no regulation or state investment.

 

Source: https://uk.reuters.com/articlea