Venezuela scrambles to bring home gold reserves

Wed Oct 26, 2011 8:11pm GMT
 

"People must be calm. Nothing is going to be lost, nobody is going to steal anything. This isn't a Hollywood movie," said the central bank's president, Nelson Merentes.

A senior government source involved in transporting the ingots, which amount to 90 percent of Venezuela's gold held abroad, told Reuters they will be shipped in several cargo flights beginning next month and ending before the New Year.

"The total cost of the operation will not exceed $9 million including transport, guards, insurance and reinsurance," the source said, without giving more details.

That price seems low, but the details of such deals are closely kept secrets for good reasons, and there are few precedents for moving gold on such a huge scale.

In 1936, Spain shipped more than 500 tonnes of gold to Moscow from Madrid at the start of its civil war. Historians say it paid 2.1 percent in commissions and an additional 1.2 percent for transport, storage and other costs.

BIG IDEAS, GRAND PLANS

Chavez announced the move in August as a "sovereign" step that would help protect Venezuela's foreign reserves from economic turbulence in the United States and Europe. Most of Venezuela's gold held abroad is in London.

It was also seen as another populist measure ahead of the election next October, when Chavez will seek another six-year term.

It will likely to be a hard fought and contentious vote, and some critics suggest Chavez is frightened by the chance of Venezuela's foreign reserves being frozen by sanctions -- as happened to his friend and ally, Libya's late Muammar Gaddafi.   Continued...

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