Hugo Chavez Says to England: “Hand Back My Gold”


Andrew McKillop
21st Century Wire
August 18, 2011

Today, Venezuelan President Hugo Chavez has ordered his nation’s central bank to repatriate $11 billion of gold reserves held in developed nations’ institutions such as the Bank of England, as prices power through one record high after another, smashing through $1800 per ounce today.

This puts the shoe on the other foot for Britain, who is normally used to asking for their money back. A long-running saga of the 1980s and 1990s was the strident demand by England’s Margaret Thatcher for the European Commission to hand back what she considered was Britain’s over-large contribution to European Union spending on themes that Mrs Thatcher did not like – for example trying to cut youth unemployment and stop industries delocalizing out of Europe. As she said: this was a wanton infringement of free playing go-go markets, with a dedicated urge to impoverish Europe, marginalize million of persons, de-industrialize the economy and destroy social solidarity. Her present day acolyte and admirer, David Cameron recently had a taste of what happens when too much Thatcher-type free market discipline comes home to roost.

Exactly like in the good old Soviet Union, you need one policeman every 200 metres along all main thoroughfares to suppress mob rage – and paying cops costs money. Hence, government spending rises.

Mrs Thatcher’s favourite finance minister Nigel Lawson was not in favour of it, but the late 1990s New Labour chancellor Gordon ‘Goldfinger’ Brown played the IMF game of breaking the back of gold bullion dealers attempts at driving gold prices to wantonly dangerously highs – say $ 350 per Troy ounce – in those dangerous days at the start of the millennium.

Gordon Brown sold around one-half of the Bank of England’s entire stock of gold in the 1999-2002 period at prices as low as $ 240 per Troy ounce. What a clever boy.

Venezuela is estimated to hold more than 210 tons of its 365 tons of gold reserves in European, Swiss, US and other banks, but will now progressively repatriate its bullion, Chavez announced on Wednesday August 16.

Outside the central banks, like the UK Bank of England, Venezuelan gold is held by several of the highly discreet, even secretive authorized bullion banks – JPMorgan Chase, Barclays Plc, Standard Chartered Plc and HSBC plc. When the Venezuelan gold is handed back, they will likely have to move fast to replace it – through buying on the open market.

FREE MARKET LIBERALS CAN ONLY GO SO FAR

Chavez has a well-rehearsed rent-a-crowd revolutionary image, but when it concerns stashing his country’s gold, Chavez clung to the decisions of his predecessors steeped in admiration of Mrs Thatcher’s free market ranting and blethering. Nearly one-half of all Venezuelan gold “parked” in the capitalist world’s central banks was held in Thatcher’s England, from very early on. As Chavez said, August 16: “We’ve held 99 tons of gold at the Bank of England since 1980. I agree with bringing that home. It’s a healthy decision.”


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