The Hugo Chavez and the bubble of Gold
The Hugo Chavez ordered the Central Bank of Venezuela to bring back to their country 211 tons of gold worth $ 11 billion held in foreign banks. The Minister of Finance of Venezuela said that the weakening U.S. dollar, the near-bankrupt U.S. economy and the eurozone debt crisis threatening the savings of Venezuela, which will be more safe in Venezuela itself or allies countries (China -Russia).
What are the possible consequences of this move of Chavez? Let’s start with the famous Max Keiser:
Max Keiser tells us the gold of Venezuela and other countries are not only stored on central banks such as Bank of England and other banks like JP Morgan. . The secret is that some of these banks do not have any more gold and should come in stock buy him to return to the rightful owner. All that is virtually bankrupt and the further accumulation of debt can lead to their eventual collapse. You can see the fall of JP Morgan which, with $ 80 trillion (!) Bets on interest rates and $ 92 trillion (!) Derivatives market, according to Max Keiser and other economists, one of the key global “economic terrorists” - also known as JP Morgue.
For many years this theory – that gold is no longer there or if there are multiple title deeds for each bar of gold – seemed to be another crazy “conspiracy theory”. Following the announcement by Chavez, the conspiracy theory now confirmed by many sources.
The Central Bank of Venezuela has formally requested by the Bank of England sending 99 tons of its own gold stored there. The Bank of England should (in theory) to have the gold. If he has, why is the theory that the reason right now conquered Tripoli by the rebels is that Gaddafi has 143 tons of gold are indispensable to London to satisfy the request of Venezuela for “natural” Gold! (The article is translated from Italian site).
According to analysts, the looting of gold in Libya since NATO has already been completed. But other 10.6 tonnes of gold is at JP Morgan and, according to the table next to the JP Morgan has the vaults of precisely that amount – 338,303 ounces, or about 10.6 tons! That same gold has “sold” on paper, about 100 times and although it is 10.6 tons of Venezuela is left for anyone else!
The JP Morgan will be able to give back to Chavez his gold, but what if other central banks in countries worried about the collapse of the banking system or the possible confiscation of gold by member lenders follow the same path? In opportunity to remember that gold is believed to be the FED has not been tested by any independent authority for many years and therefore there are serious doubts about whether there really is.
Gold “natural” and “paper”.
From here stems the panic has taken over the markets. Everyone now knows that the sweater is starting to rip. The real, palpable gold exists and circulates in the world is a certain small amount. Through various “investment products” that have been invented by banks such as EFT (Exchange Traded Funds) which enable the purchase of gold as if it were a share, the gold “sold” and “bought” every day is a multiple of actual, real quantity . People deposit real money in these funds / mutual funds thinking that they bounce real gold, while in reality the portfolio is a mixture of a small amount of “physical” gold and many useless “paper” derivatives (a derivative is a bet on future value of a bond or a product such as gold or oil).
Through EFT, a handful of bankers and fund managers manipulate the price of gold (and silver) and leads to ever higher levels. People took to make this EFT knew by then that would create a bubble, as it happened!
The owners of “paper” gold think they have gold in their hands, but with thin air. The system assumes that investors do not ever ask you all at the same time their gold. On August 25, 2011 were the COMEX contracts (futures) which promised future delivery of 53,599,600 ounces of gold, but only 1,788,136 ounces were recorded in the vaults ready for delivery. The “invisible” market of derivatives, 0 ratio of hypothetical to tangible gold can also be 100 to 1. And if you ask for?
The whole situation is a classic inverted pyramid – a “Ponzi scheme“, as known in America – in front of which $ 65 billion of Madoff’s pyramid is just peanuts. When players start retiring, the pyramid collapses. Chavez has just got his hat and said, “I opt out”! As to these things as psychology is everything, whether made or not ultimately “threat” for repatriation of gold Chavez is likely to start a chain reaction by investors to dump the waste paper and run towards the “natural “tangible gold – which is short and not enough for everyone.
There are also warnings that it could one Hugo Chavez to lead the whole system to collapse. “If you start a movement of withdrawal of gold from the banks of the U.S., Britain and Switzerland, the consequences can be far more serious than imagined Mr. Chavez. This could spark a political movement for regime change in Latin America, which will no doubt start from Venezuela. Such actions can trigger serious geopolitical changes, “says analyst rt.com, while the Infowars by Alex Jones wonders “whether Chavez will be the next target of” humanitarian intervention “.
Gold: how much more?
Signs of lack of gold in physical form became visible last week when the prices of short-term futures prices exceeded the long-term thing that has happened only once in the history of COMEX many years ago. This means that the value of “natural” gold delivered today is larger than the paper promise to deliver at some future date. . Gold reached high records of all time, next to the $ 1900 an ounce and the price chart displays the images of ‘satellite’ climb. Investors believe the “hype” of $ 5000 per ounce and continue to buy like crazy. On the other hand, the record prices have nearly wiped out the demand for gold jewelry in the country that is traditionally the largest buyer of gold, India.
There are prudent analysts emphasize that “this chart shows a classic speculative bubble” and warned that “such charts always, always, always end up with prices going down, down, down to very, very, very long .
Let us not forget that the “father” of all speculators, George Soros, recently sold almost all its investments in the precious metal, while in December last year warned that “gold is the ultimate bubble.”