According to today's Wall Street Journal, Venezuela is calling in all
211 tons of its gold from various parts of the world so it can be
lodged in its own central bank vaults in Caracas. The Bank of England
has been looking after 99 tons of it ($11 billion's worth) for many
years (and charging a service fee for doing so). Of course,
Venezuela's gold is quite safe in the BoE.
Isn't it?
Our government would never dream of purloining it.
Wouldn't it?
Financial analysts quoted by the Wall Street Journal say that,
financially and economically, it doesn't really matter where
Venezuela keeps its currency reserves like gold or dollars.
Doesn't it?
But let's think. If the Eurozone starts crumbling anytime soon and
maybe Greece, Portugal or Ireland default on their debts -- whether
singly or together -- then the UK banks (two of them among the
largest in the world) would be in deep stook. The UK economy would be
devastated -- far worse than the 2008/9 tea party. It would need to
sell all the gold it possesses just to steady the ship. M'mm . . .
maybe it might just have to "borrow" Venezuela's gold for the time
being. Purely for humanitarian reasons, of course -- necessary
welfare benefits for several million more people who have been
suddenly thrown out of work. The UK will pay it back . . . sometime.
Will it?
Venezuela's diplomats, like all countries, have probably got their
ears closer to the ground than any of the financial experts quoted by
the Wall Street Journal. It's always better to get money out of a
bank before a panic starts.
Keith
Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2011/08/
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