Gold is Money

by Yehudim 14/6/2019, 17:09

Gold is Money: Why US Trying to Nix Yellow Metal's Use in Global Transactions

The decision by Deutsche Bank, Citigroup, and the Bank of England to withhold Venezuela's gold was politicised, say American economic analyst Pye Ian and Turkish scholar Dr Mehmet Ozkan, suggesting that the banks had seized Caracas' bullions on behalf of Western governments who want to "corner" Nicolas Maduro and replace him with Juan Guaido.
On 4 June, Bloomberg reported that Deutsche Bank AG had confiscated 20 tonnes of Venezuelan gold as collateral citing Caracas' failure to make interest payments on a 2016 gold swap agreement valued at $750 million. Although the agreement was due to expire in 2021 the bank closed out the contract earlier. In much the same vein, Citigroup Inc. seized Venezuelan gold in March.
"These banks — in essence acting in quiet concert — closed their agreements early so as to hurt Venezuela's credit repayment reputation and sovereign ratings further", says Pye Ian, a private equity executive and former precious metals commodities trader. "Juan Guaidó — who has been urging a coup and 'regime change' against the Venezuelan majority population's wishes — has been deployed as supposed ‘solution provider' for the gold/debt default issue".

The precious metals expert highlighted that in Venezuela's case gold is "not only a Tier 1 Asset as per the designation of the Bank for International Settlements itself" but "means of both immediate currency for [the country] and a bedrock monetary asset for eventually stripping itself off of the dollar standard as global reserve and monopoly oil currency standard".
"Gold is money. Always has been, always will be. Recent events involving the US Treasury seeking to block gold usages in global transactions for Venezuela, Iran, Turkey and others is a latest testament to that fact", he stressed.
Dr Mehmet Ozkan, a senior fellow with the Centre for Global Policy (CGP) think tank, echoed Ian by saying that the move is part of a broader effort to "corner" President Nicolas Maduro and the Venezuelan government economically.

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"What's happening is very important in terms of economic cornering of Venezuela and the Maduro government because as you know, just Maduro is giving a food package to around 6 million people, so he needs cash. If he cannot provide that cash to buy the food package in cities, even his main supporters will start questioning his ability to govern Venezuela", Ozkan elaborated.

https://sputniknews.com/analysis/201906141075860706-venezuela-us-gold-transactions/