Venezuelan officials in London to collect 16 tons of gold from the Bank of England

Venezuela sent officials to London in an attempt to repatriate 16 tons of gold worth more than $500 million which had been deposited at the Bank of England. From Reuters:

The government of President Nicolas Maduro is seeking to bring 14 tonnes of gold back to Venezuela because of fears it could be caught up in international sanctions on the country, sources told Reuters this month.

The gold is a crucial asset for the struggling OPEC nation, where hyperinflation is expected to reach 1 million percent this year and a broad economic collapse has fueled an exodus of some 3 million people since 2015.

Maduro’s critics, including exiled opposition leader Julio Borges, have argued that the gold should not be repatriated because it could be used to finance corruption.

In case you’re wondering, 14 metric tonnes is equivalent to about 16 U.S. tons. All of this activity is motivated by actions taken last month by President Trump. The president instituted new sanctions aimed in part at Venezuelan gold sales. Now Venezuela is trying to bring the gold it has in England home to prevent it from being cut off by those sanctions:

Trump signed an executive order to ban anyone in the United States from dealing with entities and people involved with “corrupt or deceptive” gold sales from Venezuela, Trump’s national security adviser John Bolton said in a speech in Miami.

“The Maduro regime has used this sector as a bastion to finance illicit activities, to fill its coffers, and to support criminal groups,” Bolton said.

Bolton made the announcement as part of a pledge to crack down on what he called “the troika of tyranny” in the western hemisphere, naming Cuba, Venezuela and Nicaragua.

Reuters says it’s unlikely the Bank of England would refuse to return the gold because it holds gold for a number of developing countries, all of whom would be concerned if their access to their deposits was suddenly in doubt.

Back when the crisis in Venezuela was still in its early stages, some supporters of the socialist regime said Venezuela would manage its problems in part because it had a large reserve of $36 billion in gold. But hyperinflation and the degradation of the country’s oil company has forced the country to sell off a lot of that reserve. This year alone, Venezuela has sold nearly a billion dollars worth of gold.

A few more tons of gold is only going to stave off the inevitable for a short time. With hyperinflation reaching 1 million percent, millions of people fleeing the country, and an expected contraction of the economy approaching 20 percent this year, Maduro can’t keep this going much longer.