The US is imposing additional economic sanctions on Venezuela, both on oil … and gold!
The US Treasury claims Maduro has relied on an illegal mining boom in recent years with the profits generated by the gold mining company, Minerven, proving vital to maintaining the military’s support for the government.
“Treasury is targeting gold processor Minerven and its president for propping up the inner circle of the corrupt Maduro regime,” US Treasury Secretary Steven Mnuchin said in a statement.
The announcement comes days after Uganda opened an investigation into US$300 million of unexplained gold suspected of originating with Maduro’s government. Flights this month from Caracas to Entebbe raised concerns that the government is smuggling gold out of the country and selling it to traders in Africa and the Middle East.
It is the sixth round of sanctions imposed by the U.S. since January as they attempt to wrest power away from Maduro and towards opposition leader Juan Guaido. Most Western countries have recognised Guaido as Venezuela’s interim president.
Venezuela’s gold industry is allegedly one of the country’s most lucrative financial schemes in recent years. Minerven is accused of purchasing high volumes of gold from local miners using the countries depreciated currency. The gold is then melted into bars and transported to the Central Bank of Venezuela.
The sanctions have led to a spike in Venezuela’s 2-year sovereign yield (in USD) as their economy continues to liquify.
The Cafe con Leche index, meant to reflect inflation for the average coffee-drinking citizen. 2019 has been a bad year, in particular, for the average Venezuelans.
And the Gold/Venezuelan Bolivar Cross hasn’t looked so good in 2018 either.
The good news? At least Venezuela isn’t on the Pacific coast of South America so they can avoid the Fukushima reactor meltdown aftermath. Chile, on the other hand. …