Author Topic: The recent gold sale to UAE.  (Read 26 times)

Offline Jet Cash

The recent gold sale to UAE.
« on: February 01, 2019, 09:00:15 PM »
Venezuela is selling a large consignment of gold to the UAE, and I find the political ramification quite fascinating. Because of the US sanctions, Venezuela is probably having to offer a 5% or so discount on the price, and the UAE will be able to melt the gold and recast it, and thus gain its full value. They are paying in Euro, and it is not clear how this money will be used. It is claimed that it will be used to purchase food, but it is more likely that it will be used to purchase light crude oil to replace the oil it purchased from the US. This can be mixed with the heavy Venezuelan oil to create a product that can be sold on the open market. This has two damaging effects on the US. Not only is it depriving the US of a useful oil exchange, but it is introducing yet more oil sales that are not based on the dollar. Maduro will be gaining the revenue from both the sale of the gold, and the sale of the heavy Venezuelan oil, and this could well be diverted.

So what can the US do about it> Not a lot in my opinion. The UAE is assisting the US in its attempt to force regime change in Iran, so they won't want to rock that boat. There is also the problem of Maduro's grasp on the army. The US want a number of senior Venezuelan army officers to be prosecuted for drug offences and other alleged crimes, so they are likely to continue to supoprt Maduro.