Venezuela to launch PetroGold, how much could its support in gold be?
Venezuela is the country with the largest oil reserve in the world, according to data it has about 300 billion barrels in the Orinoco belt, these are certified reserves, plus the production wells in the West, Central Plains, Eastern Zone. In the first edition, 5,000 million barrels of oil were destined to support the Petro, with the emission of 100 million tokens of this cryptocurrency.
Now President Nicolás Maduro announced the launch of PetroGold, in this article he will try to scrutinize what the nation has available to support this new cryptocurrency. Let’s review below.
Likewise, it is mentioned that in a year and a half approximately 7,000 tons of gold will be certified, which are located in the Orinoco mining arch and would be the second country in reserves after the US.
“Each ton is 35,000 ounces and today the ounce is quoted at $ 1,327.95 on average. That is to say, we are talking about 47 million dollars per ton for today, “said the president of Petroleo de Venezuela (PDVSA). “When we talk about 7,000 tons, a (ratio of) 100 tons per year, we are talking about a potential exploitation of up to 70 years. Definitely the exploitation of gold represents a diversified source of new currency for the country, “he said.
“These reserves can be immediately monetized, because unlike oil, gold can be part of the monetization that the Venezuelan state can do,” he explained.
On the other hand, President Hugo Chávez, starting in 2011, began the repatriation of 160 tons of monetary gold, which are deposited in European and US banks. At that time, the following was reported: “On January 30, 2012, the repatriation of the last batch of 14-tonne monetary gold from foreign banks arrived to Venezuela, a process that began on November 25, 2011, and this measure becomes in a sovereign manner on the part of the Venezuelan State “. It was mentioned from the government, “Gold that should never leave the vaults of the Central Bank of Venezuela.”
In this sense, the following was mentioned in 2011: “it is a measure that, as is well known, is sovereign on the part of the State, and even then, it is a way to alleviate and safeguard our reserves and our economy, preventing them from being frozen by governments not friends of Venezuela “, these were the reasons for the repatriation of gold reserves.
As reported in the media, “Between November 25, 2011 and January 30, 2012, 160 tons of the precious metal, valued at approximately US $ 8,940 million, were repatriated. The country’s monetary gold reserves surpass 360 tons, which represents around US $ 18,000 million. ” This is a very important fact.
In addition to the above, “Venezuela is the country with the largest amount of gold reserves in Latin America, according to the latest report of the World Gold Council, based in London,” which supports the above.
In addition to what has been described to the immense wealth described above, the new deliveries of gold from small-scale mining are added, as Minister Arreaza pointed out, “he threw 3,007 kilograms in just three months and ten days, which translates into about 120 million dollars. This was reported by the Minister of Popular Power for Ecological Mining Development, Jorge Arreaza, within the framework of the activation of the Mining Engine of the Bolivarian Economic Agenda. ” It translates into new reserves of this metal.
It is mentioned through the communication system of the state, that so far in 2018, have been delivered, 8.5 tons of gold, to the Central Bank of Venezuela, if you continue at that rate, by the end of the year you can enter to the vaults of the Central Bank of Venezuela an average of 34 tons of gold that could be monetized. As you know a ton is 35,000 ounces and the price of each ounce is $ 1,327.95, you would get a value close to 46,478,250 dollars by the end of 2018.
Based on the above, Venezuela could have 394 tons of gold in vaults of the Central Bank of Venezuela to prop up the PetroGold immediately, with an endorsement of 18,312,430,500 dollars, this is an appreciable amount that could help to develop the economy of the country with the highest hyperinflation that has ever been seen in Latin America and that for some specialists is around 30,000 percent.
In this panorama of contradictions it should be added that the National Assembly with an opposition majority does not accept the creation of a cryptocurrency like the Petro and has said that it is “illegal” that the government is mortgaging the oil reserves, now it does not approve the creation of the PetroGold, this is an unencouraging scenario for the people on foot who want to have the basic products to lead a life without haste or jumping, the queues to access these products are endless and when they are available you can not buy them because of their high price, or when you want to buy them there is no cash fiat money. All of the above paints a bleak picture for the richest nation on earth. It is a very real contradiction.
In summary with the blockchain-bitcoin technology it is possible that the sovereign states can innovate in the creation of a cryptocurrency that meets the requirements of international standards and displace the factors that disturb the economy of the richest country in reserves of raw materials, but that has the largest hyperinflation in the contemporary history of the nation, as is Venezuela. It waits for new announcements.
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