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Rickards - Chavez’s Gold Leased to JP Morgan, Barclays, HSBC?
With gold recently breaking the $1,900 level, today King World News interviewed KWN Resident Expert Jim Rickards, Senior Managing Director at Tangent Capital Markets, to get his take on recent events. When asked about the impact of Hugo Chavez moving Venezuela’s gold out of England he responded, “People are aware of the story but I think it’s under-appreciated. Meaning, I’m not sure the full implications of this have sunk in. They have about $6.3 billion of cash and a little more than 200 tons of gold worth $11 billion, so it’s quite a bit of wealth.
Hugo Chavez is moving his cash out of the Bank for International Settlements (BIS), which is the central bankers central bank. And he’s moving it to Russian, Chinese and Brazilian banks. So he’s basically getting out of the Western banking system, moving into the communist, Russian and Latin American banking system.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
August 23, 2011
Jim Rickards continues:
“He’s called up the Bank of England and he’s asked the Bank of England to ship the gold back to Venezuela and he’s built new vaults in Venezuela to hold his gold.
Taking that altogether, what does it all mean? Well, the reserve part of it, moving the dollars out of BIS and moving it into Russian and Chinese banks tells me that he’s worried about a freeze. He’s worried about some kind of confrontation with the United States number one, but he’s probably worried the dollar itself.
Meaning, once he gets the dollars into Russian banks, he can then tell the Russian banks, his new custodians, ‘I want you to sell the dollars, buy the euro, buy more gold, buy Chinese yuan. But it’s a way for him to diversify in ways that are not very easy to track.
Right now if he is doing it in BIS, the Fed is going to know and other people are going to know, but if he’s doing it through a Russian bank and Russia is sort of fronting for Venezuela, you’re not going to know who’s behind it. So it’s a way to first of all get out of the US system so he’s not subject to a freeze, number two get out of the dollar so he is not subject to a dollar collapse.
Here’s a guy who actually did it, who called up the Bank of England which is the other big custodian. By the way these are the two biggest custodians in the world, the Federal Reserve Bank of New York and the Bank of England each have approximately 6,000 tons (of gold), mostly for other parties, not for themselves....
Continue reading the Jim Rickards interview below...
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“Who knows how many times it’s (Venezuela’s gold has) been pledged? What’s obvious is that the paper gold (owners) that think it is backed by real gold, is actually a high multiple of the real gold, it’s an inverted pyramid. So when people start liquidating, basically cashing out of the system, it’s like cashing in your chips at the casino and walking away from the table. Venezuela is saying, ‘Hey, we’re walking away from the table.’
Now, I think that Venezuela is going to get their gold. Well if the Bank of England has to ship 200 tons to Venezuela, maybe that gold is pledged to somebody else. Maybe it is leased to JP Morgan or Barclays or HSBC, which means that the guy on the other side of the trade, he’s going to get called in too and you are going to see this market start to tighten up, implode a little bit and de-leverage. Heaven help us if there are many more Venezuela’s who start asking to get their gold back.”
This segment covers a ‘Twist’ from Ben Bernanke, the continued move around the world into gold and more. The KWN interview with Jim Rickards is available now and you can listen to it by CLICKING HERE.
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
