The strategy of storing the power’s gold reserves in the banks of a foreign country is quite risky. As an example, we can mention India (1991), which, on credit, sent 8 tons of gold to the UK. The country has paid off its debt for a long time, but part of the country's gold reserves are still not at home. The British explain everything with safety requirements, they say, their gold will be calmer. Another major holder of third-party gold resources is the United States. Many countries have prudently exported their stocks from the US Federal Reserve. This is what Turkey did after aggravation of relations against the backdrop of an attempted coup in 2016. There were no coup attempts in Germany, but in 2017, this country withdrew half of its rather large supply from the USA ahead of schedule. Interestingly, the Germans explained this step by the need to increase the national identity of the people: the gold of Germany should be in German banks. It was not allowed to take out all the stock from the USA then, but then the European countries started moving: Germany decided for a reason like that. However, the massive export of gold reserves did not happen.
Nicolas Maduro. Source: Manaure Quintero. Reuters
Nicholas Maduro in this stories did not have time to demand the removal of the national gold heritage of Venezuela from Great Britain in time. Actually, this is the president’s key mistake. Why didn’t he? Probably because the British kept no more than 1,8 billion dollars in gold, but the main supply was still at home. But not the most effective economic policy (to put it mildly) of the Venezuelan leadership and low oil prices led to a national catastrophe. As a result, Maduro had no choice but to start selling gold. But due to potential US sanctions, few will agree to buy bullion with the stigma of the Central Bank of Venezuela. Therefore, last year, several tons of gold were transferred to Uganda to the African Gold Refinery (AGR) for smelting. Further, traces of Venezuelan gold are lost: according to experts, Iran, Turkey or the UAE could acquire it. It is noteworthy that, according to The Wall Street Journal, gold worth more than $ 300 million was taken out by two flights in March on Russian charter liners. Russia is not the only country to whom Maduro entrusted such a crucial mission: in 2018, the Turkish company Sardes exported $ 900 million worth of gold for sale. There were also irreparable losses. In June 2019, Venezuela lost gold by at least $ 1,4 billion, which is about 30 tons of precious metal. It was lost, not sold. Citibank and Deutsche Bank, which previously issued loans to the country against gold, fell under US sanctions and decided to "forgive" the debts of Venezuela. Naturally leaving gold to yourself. According to Bloomberg, Citibank confiscated gold for $ 400 million, and Deutsch Bank - for 1 billion.
Great Britain is potentially a very rich country. There are at least 400 thousand gold bars in its vaults with a total value of 244,6 billion dollars, of which only a part (no more than 310 tons) belongs to the British. This makes the island nation the world's second largest depository of gold reserves (in the first place is the US Federal Reserve). At the same time, the Americans still do not know exactly how much gold they have in their piggy bank. Officially, at the beginning of July, it was 8133 tons (in this the United States ranks first in the world), but a stock audit has not been carried out for a very long time. Trump initially made an attempt to count gold at least at Fort Knox, but he was advised to do so. A similar story with Germany's gold reserves: according to all reports, at least half are stored in the USA, but it is impossible to conduct an independent audit of reserves in New York's vaults. For reference: Germany now officially owns 3364 tons of gold - this is the second place in the world.
Since the end of 2018, Venezuela has been trying in vain to access its own gold stored in the Bank of England. It was necessary to knock out the precious metal from the UK through the judicial authorities, but, as it became known a few days ago, the English court only supported the decision of the country's bank. The motivation in the UK is very simple: Maduro is not the president of Venezuela, because it was decided in the United States. And Judge Nigel Tiar said that the UK government, following the United States, “unequivocally recognized” Juan Guaido as President of Venezuela. On Twitter from the Central Bank of Venezuela appeared insignificant:
"The Central Bank will immediately appeal the absurd and unusual decision of the English court, which intends to deprive the Venezuelan people of the gold so necessary to combat the COVID-19 pandemic."
At first, Maduro even decided to expel the European Union ambassador from the country, but changed his mind.
The position of Great Britain in this story is very interesting. On the one hand, the state has a small (300-ton) gold reserve (19th place in the world top ranking). But the giant reserves of other people's gold allow the country not to particularly care about its own piggy bank - at any time, you can be denied a refund under various pretexts. As demonstrated by the situation with Venezuela. And the non-recognition of Maduro’s authority is not the only reason. It is obvious that Great Britain openly overslept the global trend for buying gold - a precarious geopolitical situation prompted many states to do so. And now the coronavirus turned out to be an additional problem, adding uncertainty to the future. Which of the countries that keep the British gold is safe from a situation similar to Venezuelan? At best, applicants can rely on loans secured by their own gold.
Juan Guaido. Source: Manaure Quintero. Reuters
The failure to return gold to Venezuela, of course, will not lead to the momentary accession in Caracas of the "real president" Juan Guaido, who, incidentally, enthusiastically welcomed the decision of the British court. The British only added suffering to the Venezuelans, prompting them in the best tradition of exporting democracies to a bloody confrontation with the regime. Following the logic of the court, gold should be given to Guaido, but this also becomes a problem. Firstly, he will not be able to spend money on popular needs, since he does not have real power in the country. And secondly, no one excludes that this will only further promote the civil war in Venezuela. Therefore, if Guaido gets gold, it is solely on the security of folk gold, permanently settled in the UK.
The situation with the actual robbery of the sovereign state of Venezuela by Great Britain raises a lot of questions for Russia. On the one hand, we should not worry about this: almost 2,3 thousand tons of Russian gold are stored at home. But, on the other hand, Russia's material resources are not entirely invested in gold. A large part is stored in debt securities of the US Federal Reserve. Of course, the Americans will not freeze and confiscate these assets without warning, as this will seriously affect the reputation of the States themselves. It is possible that in response to such provocative actions, a lot of countries will rush to withdraw their assets from American hands, and this will cause a collapse of almost global proportions. To realize this, just look at the external debt of the United States. To freeze assets, we need a very serious demonization of Russia and the country's leadership. And the first call already seemed to be: the US Senate is seriously considering imposing personal sanctions on President Putin and his inner circle in connection with the allegedly possible connection between Russia and the Taliban. The next step could be the announcement of tyranny in Russia and the complete freezing of assets by analogy with Venezuela.