The Reuters news agency reports this week that Venezuelan President Nicolás Maduro’s regime is secretly spiriting tons of gold out of the country. It’s one of the few sources of hard currency left there. But experts here say it may keep Maduro propped up for a while.
According to Reuters, Venezuelan operatives snuck eight tons of gold out of vaults in the country’s central bank last week – behind the bank’s back. And that wasn’t the first secret gold withdrawal.
Thanks to catastrophic socialist mismanagement, and now U.S. economic sanctions, Venezuelan President Nicolás Maduro’s authoritarian regime is running out of money. Maduro hopes to sell gold to shore up foreign reserves and survive the growing international effort to squeeze him out of power.
“They are desperate," says Russ Dallen, an expert on Venezuelan oil and finances who heads the investment firm Caracas Capital in Miami. "Their cash flow from oil is severely disrupted by the loss of the U.S. market. This week, for example, there are no ships offloading any oil from Venezuela for the first time ever.”
Dallen points out that the U.S. and other countries are trying to block Venezuela from cashing in its gold. Britain is withholding more than $1 billion in Venezuelan gold stashed there.
But Dallen says Maduro will still be able to find countries like Russia, as well as global investment firms, to take the gold off his hands.
“It’s gold," says Dallen. "There are always people willing to buy gold. That’s why pawn shops do so well.”
That is, Dallen adds, until the gold runs out. Then Maduro stands a bigger chance of being overthrown by opposition leader Juan Guaidó - whom the U.S. and some 50 other countries now recognize as Venezuela’s legitimate president.