Dear Friend of GATA and Gold:

In the report excerpted below Reuters reminds us today that in February the president of Venezuela's central bank, Nelson Merentes, discussing gold swaps such as those the bank had begun, told the news agency: "It's normal. All central banks do this."

Seven years ago the U.S. Federal Reserve confessed to GATA, if inadvertently, its own participation in gold swaps, though, unlike Venezuela's central bank, the Fed insisted on secrecy for its swaps:

http://www.gata.org/node/7819

But if "all central banks do this," what is their objective?

In Venezuela's case the objective is plain: The kleptocratic regime that has driven the country into the ground needs foreign currency, for which the national patrimony is being pawned. But what are the Fed's purposes with gold swaps? And if Morantes is correct that "all" central banks undertake gold swaps, what are their purposes? What are they doing in the gold business? Is the objective similar to that of gold leasing by central banks, which, as Federal Reserve Chairman Alan Greenspan told Congress in 1998, was undertaken to hold the gold price down?:

http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

That is, are gold swaps often undertaken to move gold around as necessary to intervene surreptitiously in the currency markets and thereby manipulate and rig them? For example, do exchange-traded funds like GLD participate in gold swaps with central banks to prevent shortages from developing in the gold market and thus to hold the price down and to defend government currencies and bonds?

And, of course, since the story has practically been hurled in their face, why aren't Reuters and other mainstream financial news organizations asking about those other gold swaps? In spite of these admissions, do the news organizations really believe the pontifications of Casey Research founder Doug Casey and others that central banks couldn't care less about gold?

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

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Venezuela Exports $456 Million in Gold to Switzerland Amid Cash Crisis

By Alexandra Ulmer and Corina Pons
Reuters
Tuesday, March 22, 2016

CARACAS -- Venezuela exported about 443 million Swiss francs ($456 million) worth of gold to Switzerland in February, data showed on Tuesday, as the South American country's central bank carried out swaps to receive cash due to a biting economic crisis.

Details of the data published by the Swiss customs bureau were not immediately clear, though Venezuela's central bank's president in February confirmed to Reuters it had been carrying out gold swaps.

"It's normal. All central banks do this," said Nelson Merentes, adding that the operations have time frames of three to four years with multiple banks, which he did not identify.

"As part of our strategy, the (central bank's) board of directors has decided to carry out swaps."

The OPEC country is suffering from a severe recession, triple-digit inflation, and chronic product shortages. The government's currency control system has slashed approval of dollars for product imports, leading to empty store shelves and snaking supermarket lines. ...

... For the remainder of the report:

http://www.reuters.com/article/venezuela-gold-switzerland-idUSL2N16U1UR

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 -- Published: Wednesday, 23 March 2016 | E-Mail  | Print  | Source: GoldSeek.com

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