Thursday, August 18, 2011

Venezuela Says, "We Want Our 99 Tons of Gold Back" Gold Banks/Vaults Now Shitting Their Pants

Bankers are truly parasites. Gold now at 1821.0...

Yesterday that not-so crazy-all-of-the-time Hugo Chavez and Venezuela said they were "nationalizing" their gold industry. This is code for we want our gold back, chop chop. http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=133721&sn=Detail&pid=102055

Many people don't understand that gold bankers leverage gold much like they leverage dollars. However, gold- unlike dollars- can't be counterfeited. There is no FED bailout plan for banks that are extremely over leveraged and can't deliver the physical goods. Therefore, when the true owner of 99 tons of gold wants physical delivery...it's deliver or default. The loss of the underlying commodity causes liquidity to dry up and all of those paper claims get settled in paper...or not at all. Now if just a few more big holders of gold demand their goods back...there is a saying for this...

Venezuela has about 300 tons on deposit around the world. A third of that, 99 tons, is stored with the Bank of England.

Post Script Update* Gold has soared nearly 100 dollars an ounce since this story broke last week.

He who panics first, panics best. Hugo "Chop Chop" Chavez may not be entirely crazy.



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