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As Chavez Pulls Venezuela's Gold From JP Morgan, Is The Great Scramble For Physical Starting?
zerohedge. ^ | 08/17/2011 | Submitted by Tyler Durden

Posted on 08/18/2011 1:54:49 PM PDT by dennisw

In addition to the nationalization of his gold insutry, Chavez earlier also announced that he would recover virtually all gold that Venezuela hold abroad, starting with 99 tons of gold at the Bank of England. As the WSJ reported earlier, "The Bank of England recently received a request from the Venezuelan government about transferring the 99 tons of gold Venezuela holds in the bank back to Venezuela, said a person familiar with the matter. A spokesman from the Bank of England declined to comment whether Venezuela had any gold on deposit at the bank." That's great, but not really a gamechanger. After all the BOE should have said gold.

What could well be a gamechanger is that according to an update from Bloomberg, Venezuela has gold with, you guessed it, JP Morgan, Barclays, and Bank Of Nova Scotia. As most know, JPM is one of the 5 vault banks. The fun begins if Chavez demands physical delivery of more than 10.6 tons of physical because as today's CME update of metal depository statistics, JPM only has 338,303 ounces of registered gold in storage. Or roughly 10.6 tons. A modest deposit of this size would cause some serious white hair at JPM as the bank scrambles to find the replacement gold, which has already been pledged about 100 times across the various paper markets. Keep an eye on gold in the illiquid after hour market. The overdue scramble for delivery may be about to begin.


TOPICS: Crime/Corruption; News/Current Events
KEYWORDS: gold; goldbug; hugochavez; venezuela
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1 posted on 08/18/2011 1:54:55 PM PDT by dennisw
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To: dennisw
It's hard to wrap yer mind around this.

How much is a TON of gold worth?

I'm guessing it's outta my reach.

2 posted on 08/18/2011 2:00:54 PM PDT by diogenes ghost
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To: diogenes ghost

$5,888,000 I think.


3 posted on 08/18/2011 2:03:50 PM PDT by omega4179 (Obama Downgrade)
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To: omega4179

What’s Spanish for GOLD-FINGAH!?


4 posted on 08/18/2011 2:05:10 PM PDT by Argus
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To: diogenes ghost

One metric ton is worth about 58 million dollars. The 110 tons in BoE and JP Morgan would be about 6.2 billion dollars.


5 posted on 08/18/2011 2:07:31 PM PDT by ThirdMate
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To: omega4179

Youy’re missing a zero, I believe.


6 posted on 08/18/2011 2:07:43 PM PDT by Trailerpark Badass
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To: dennisw

99 tons of gold in the vault

99 tons of gold

I take them all

and that’s what ya get

99 tons of gold in my vault.

(/Hugo Off.)


7 posted on 08/18/2011 2:10:04 PM PDT by NormsRevenge (Semper Fi ... Godspeed .. Monthly Donor Onboard .. Obama: Epic Fail or Bust!!!)
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To: diogenes ghost

One ton is 2,000 lbs, or 32,000 ounces. 32,000 ounces is 35,108.5714 Troy ounces.

At $1824 per (Troy) ounce, that’s $64,038,034.20


8 posted on 08/18/2011 2:10:35 PM PDT by Yo-Yo (Is the /sarc tag really necessary?)
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To: diogenes ghost
1 short ton is 29,166.6667 troy ounces. At $1824/troy ounce you get $53,200,000. I'll take two.
9 posted on 08/18/2011 2:10:35 PM PDT by KarlInOhio (The Repubs and Dems are arguing whether to pour 9 or 10 buckets of gasoline on a burning house.)
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To: dennisw

There are lots of reasons for gold to keep increasing. Chavez being but one reason.

On Ausg 18 2010 gold was $1831 and today gold hit a high of $1832.

There are many reasons why gold increased $600 in the past year.

A principal reason is Obama and the Democrats who went on a spending spree that produced nothing of value.


10 posted on 08/18/2011 2:11:52 PM PDT by Presbyterian Reporter
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To: diogenes ghost
How much is a TON of gold worth?

At today's price of $1824 per ounce, one ton of gold would be worth $58,368,000.

11 posted on 08/18/2011 2:14:26 PM PDT by 50mm (Trust nobody and you'll never be disappointed.)
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To: All; KarlInOhio
One ton is 2,000 lbs, or 32,000 ounces. 32,000 ounces is 35,108.5714 Troy ounces.

Oops, wrong answer. Karl got it right.

12 posted on 08/18/2011 2:14:37 PM PDT by Yo-Yo (Is the /sarc tag really necessary?)
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To: Yo-Yo
32,000 ounces is 35,108.5714 Troy ounces.

It's the other way around. A troy ounce at 480 grains (31.103 grams) is heavier than an common (Avoirdupois) ounce at 437.5 grains (28.35 grams).

13 posted on 08/18/2011 2:15:22 PM PDT by KarlInOhio (The Repubs and Dems are arguing whether to pour 9 or 10 buckets of gasoline on a burning house.)
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To: dennisw

“He who has the gold, makes the rules.”


14 posted on 08/18/2011 2:15:38 PM PDT by GourmetDan (Eccl 10:2 - The heart of the wise inclines to the right, but the heart of the fool to the left.)
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To: diogenes ghost

2,000 x 16 x 1,825.00 = $58,400,000.00


15 posted on 08/18/2011 2:15:56 PM PDT by theyreallthesame
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To: dennisw

I still like silver. Great quick lesson on physical silver:

http://www.oilbull.com/physical-silver/

I tend to agree with it. Just buy an Eagle or a Round and don’t worry if you are paying a buck or two too much or not for starters.

Then, when ready to dump a real pile of money into it, go deep and shop like you would for a camera.


16 posted on 08/18/2011 2:19:29 PM PDT by bluefish (NoBama! Because Commies Suck)
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To: Presbyterian Reporter

Check this out——>>>

No doubt about it today. Venezuela has formally asked the Bank of England for its gold that is stored there to be returned to Caracas. They are also asking the other foreign depositories for the rest of its gold.

Venezuela has 99 tonnes of gold stored at the Bank of England. It has a total of 212 tonnes so 113 tonnes of gold will come from the BIS and the Federal Reserve Bank of NY.

I would like to point out to you that the gold held at the Bank of England is not earmarked gold. It is on deposit there and the Bank can do whatever it likes with the gold. However it is a liability to them and the bank will fail if they cannot return the gold to Venezuela. The gold at the Federal Bank of NY is earmarked gold and the bank receives fees for its safekeeping. The gold held at the BIS is a site deposit and generally the BIS takes ownership of gold in a foreign jurisdiction in return for needed cash to a nation.
It looks like the BIS has site deposits of gold for Venezuela with the Federal Bank of NY.

You can now imagine what is going on behind the scenes. The Bank of England will recall its gold from the GLD. If that gold from GLD is now gone to sovereign China, India, Russia, South Korea, Mexico, and to wealthy Europeans fleeing the Euro, then the Bank cannot retrieve its swapped gold to repay Chavez. Not only that but the Bank of England is not the ultimate owner of the gold..it is probably wealthy Arabs or oil barons like Chavez. You can now imagine the wild scenarios possible. Gold was at its nadir of the day and shot up big time on the news of the repatriation of gold. Many understand the significance of today’s announcement.

http://harveyorgan.blogspot.com/


17 posted on 08/18/2011 2:20:11 PM PDT by dennisw (A total waste of oxye)
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To: diogenes ghost

Depends on whether you’re talking about the industry standard units of measure, tonnes (aka, metric tons), or the archaic American unit of measure, ton, of which there are two possibilities, short tons or long tons.

When talking about gold in international markets, it’s reasonable to assume the unit of measure is metric tons.

A metric ton (mt) weighs exactly 1000 kilograms. A troy ounce, the unit of measure used for gold pricing, weights 31.1034768 grams.

1 mt = 1000 kg/mt * 1000 grams/kg / (31.1034768 grams/troy ounce)
.. = 32,150.75 troy ounces

At today’s closing price of $1824.09/troy ounce, this works out to $58,645,855/metric ton.


18 posted on 08/18/2011 2:21:13 PM PDT by Skepolitic
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To: dennisw

He is taking it back because he doesn’t want a court over seas to attach it to a settlement with all the companies that are getting their assets seized by Chavez.


19 posted on 08/18/2011 2:21:55 PM PDT by dila813
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To: dennisw

When he gets those bars if he doesn’t cut into a few of them it is all gold. If he does it may be largely tungsten. Would he announce that Venezuela had been defrauded?


20 posted on 08/18/2011 2:26:24 PM PDT by arthurus (Read Hazlitt's "Economics In One Lesson.")
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To: dila813
In that case: he should have got his gold back before nationalizing the mines. Now I bet there will be an injunction (or whatever you call it over there).
21 posted on 08/18/2011 2:26:29 PM PDT by agere_contra ("Debt is the foundation of destruction" : Sarah Palin.)
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To: dila813

Ding, ding, ding....
We have a winner at post number 19....

What prize do we have for this poster Mister Pardue?

I say that the guy is seizing a lot more than his gold miing industry in the next 90 days. He is going to try and fund his family before the big C kills him.


22 posted on 08/18/2011 2:28:29 PM PDT by KC Burke
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To: dennisw
Sounds like the foundation of a novel or movie: Will Venezuela's 99 tons of gold make it back to Venezuela or be hi-jacked on land or the high seas??

Some former SEALs should think about organizing a heist, distribute an ingot to the families of fallen soldiers...

Paging Scott Coleman!

23 posted on 08/18/2011 2:28:32 PM PDT by DTogo (High time to bring back the Sons of Liberty !!)
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To: arthurus
The gold from London will be in the form of 'good delivery bars'. If a single one of those triple-checked and certified bars is tungsten then it's dogs and cats living together time.

But he should look very carefully at whatever he gets from JP Morgan.

24 posted on 08/18/2011 2:30:48 PM PDT by agere_contra ("Debt is the foundation of destruction" : Sarah Palin.)
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To: dennisw; dila813; All

What a mess!! What happens if a carrying ship or airplane sinks and is never seen again. Boy what great movie plots.


25 posted on 08/18/2011 2:31:43 PM PDT by gleeaikin
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To: arthurus

“Would he announce that Venezuela had been defrauded?”

He’ll say that anyway. Calling Kelly’s Heros!


26 posted on 08/18/2011 2:33:35 PM PDT by Always Independent
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To: gleeaikin

I was thinking the same thing, when he gets it back in country, that gold is going to be less safe, not more safe.

If Chavez doesn’t steal it, one of his Generals will.


27 posted on 08/18/2011 2:36:39 PM PDT by dila813
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To: arthurus

I remember the rumor that the Klinton’s exchanged our gold supply to gold colored tungsten.


28 posted on 08/18/2011 2:38:38 PM PDT by mcshot (Hey we're turning upside down compliments of career politicians.)
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To: dennisw

Venezuela has another hundred tons of gold stored in the U.S. vault at West Point. Chavez has also asked for its return. For some reason, the business MSM has been completely silent with respect to this story.

29 posted on 08/18/2011 2:39:36 PM PDT by Zakeet (If it ain't broke, the Wee Wee will fix it until it is)
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To: agere_contra; DTogo
I would not like to be on the crew of the ship or plane carrying those bars to Hugo. Whether they are real gold or plated tungsten, there are a lot of ruthless people who have reasons to make sure they never get there.

We are shortly to see things happen that didn't even happen in the Great Depression. Buckle up.

30 posted on 08/18/2011 2:40:18 PM PDT by ccmay (Too much Law; not enough Order.)
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To: Zakeet

Just when you think Hugo couldn’t get any uglier. Smell the sulfur, Hugo!


31 posted on 08/18/2011 2:51:49 PM PDT by TexasRepublic (Socialism is the gospel of envy and the religion of thieves)
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To: Yo-Yo

10 Troy Ounces to the Pound.


32 posted on 08/18/2011 3:02:04 PM PDT by dusttoyou ("Progressives" are wee-weeing all over themselves, Foc nobama)
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To: mcshot

A Canadian bank last year found it had a good stock of gold clad tungsten. I bet we don’t own any of the gold we store any more so I suppose it doesn’t matter so much to us if it is all tungsten.


33 posted on 08/18/2011 3:06:29 PM PDT by arthurus (Read Hazlitt's "Economics In One Lesson.")
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To: Zakeet
For some reason, the business MSM has been completely silent with respect to this story.

That's because their Keynesian masters have assured them that gold is nothing but a barbarous relic. Nothing worth talking about, then.

34 posted on 08/18/2011 3:08:09 PM PDT by BfloGuy (Workers and consumers are, of course, identical.)
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To: dennisw; blam; CodeToad

Interesting.


35 posted on 08/18/2011 3:15:21 PM PDT by Travis McGee (www.EnemiesForeignAndDomestic.com)
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To: Skepolitic
"......$58,645,855/metric ton."

Yup, just outta my reach.

36 posted on 08/18/2011 3:19:00 PM PDT by diogenes ghost
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To: dennisw
In a related future story, It appears Pirates attacked and absconded with a ship carrying 99 tons of gold as it was headed to Venezuela.
The shipment was not insured by Lloyds.
.. BTW, any future pirates looking for a share of swag ( if you can call 99 tons of gold swag), I'm just kidding.
37 posted on 08/18/2011 3:20:36 PM PDT by Waverunner (I'd like to welcome our new overlords, say hello to my little friend)
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To: dila813

Bingo. You win.


38 posted on 08/18/2011 3:21:07 PM PDT by Former Proud Canadian (We .. have a purpose .. no longer to please every dictator with a vote at the UN. PM Harper)
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To: diogenes ghost

It’s hard to wrap yer mind around this.

How much is a TON of gold worth?


What’s really interesting is that the ton of gold that would max out the load capacity of a heavy-duty pickup truck would be a cube less than 15” on a side. Hide it in a U-Haul moving box.

1,000,000 grams per metric ton/19.3 grams/cc=51800cc

Cube root of 51k =37.3 cm on a side.


39 posted on 08/18/2011 3:31:43 PM PDT by Atlas Sneezed (Government borrowing is Taxation without Representation)
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To: arthurus

A Canadian bank last year found it had a good stock of gold clad tungsten.


Do you have a link to this startling story?


40 posted on 08/18/2011 3:34:08 PM PDT by Atlas Sneezed (Government borrowing is Taxation without Representation)
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To: DTogo; dennisw

*** Will Venezuela’s 99 tons of gold make it back to Venezuela or be hi-jacked on land or the high seas??***

Which reminds me... What ever happened to all that Aztec and Inca gold Spain sent to Russia, during the Spanish Civil War, where it promptly disappeared?


41 posted on 08/18/2011 3:48:24 PM PDT by Ruy Dias de Bivar (Click my name. See my home page, if you dare! NEW PHOTOS & PAINTINGS)
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To: Travis McGee

The only reason I can think of is a lack of trust...which says it all.


42 posted on 08/18/2011 3:48:37 PM PDT by CodeToad (Islam needs to be banned in the US and treated as a criminal enterprise.)
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To: bluefish

Thanks- good link!


43 posted on 08/18/2011 3:51:28 PM PDT by silverleaf (The super rich do not pay taxes, they collect taxes.)
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To: arthurus

No need to cut it. Just weigh it. Gold has the highest specific gravity. It cannot be counterfeited.


44 posted on 08/18/2011 3:57:47 PM PDT by bigoil (Study Thy Nixon)
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To: DTogo
Is that you Mr. Flynn?


I would be watch Term Limits when it is made into a movie, maybe a documentary if things keep going this way!

45 posted on 08/18/2011 4:31:10 PM PDT by ScottinSacto (If anyone will beat Obama, let's not send just anyone. Cain/West 2012)
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; Convert from ECUSA; ...

Thanks dennisw. additional:
46 posted on 08/18/2011 4:33:44 PM PDT by SunkenCiv (Yes, as a matter of fact, it is that time again -- https://secure.freerepublic.com/donate/)
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To: KarlInOhio

you’ll take 2? I’ll see your 2 and raise you 3! heh


47 posted on 08/18/2011 5:52:37 PM PDT by Bulwyf
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To: dennisw

How would one transport 10 tons of gold to Chavez’s house?


48 posted on 08/18/2011 8:23:45 PM PDT by Terry Mross (I'll only vote for a SECOND party.)
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To: Ruy Dias de Bivar

FWIW_
The Soviet Union were the main suppliers of military aid to the Republican Army. This included 1,000 aircraft, 900 tanks, 1,500 artillery pieces, 300 armoured cars, 15,000 machine-guns, 30,000 automatic firearms, 30,000 mortars, 500,000 riles and 30,000 tons of ammunition.

The Soviets expected the Republicans to pay for these military supplies in gold. On the outbreak of the war Spain had the world’s fourth largest reserves of gold. During the war approximately $500 million, or two-thirds of Spain’s gold reserves, were shipped to the Soviet Union.

http://webcache.googleusercontent.com/search?q=cache:ZAFisTC4xMMJ:www.spartacus.schoolnet.co.uk/SPrussia.htm+gold+Spain+Russia+the+Spanish+Civil+War&cd=5&hl=en&ct=clnk&gl=us&client=firefox-a&source=www.google.com


49 posted on 08/18/2011 8:33:41 PM PDT by dennisw (NZT -- works better if you're already smart)
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To: KC Burke; All

How long can the banks legally stall, law suits from nationalized companies, etc.? In time enough for the big C to do God’s work?


50 posted on 08/18/2011 11:21:19 PM PDT by gleeaikin
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