Caracas Chronicles

Having trouble figuring out what Goldman Sachs is doing with our gold reserves? Well, if it’s any consolation, so is Bloomberg.

Yet, in an illuminating blog post, their Matt Levine can’t help but see the Greek overtones to the deal apparently on offer:

…despite the word “swap” here, my best guess about what is going on here is that it is really just a secured loan and so barely a derivative at all.

Ask yourself, what is the purpose of this trade? I won’t tell you the answer, because I don’t know, but it sure seems to be for Venezuela to get some money for its gold without “selling” it. Which is the sort of sleight of hand that, as a bank, in 2013, you might want to avoid. Unless, again, it pays well.

As far as anyone can make out then, Venezuela is incurring needless costs for the purpose of securing money from its gold reserves without appearing to sell them, and fattening up some Wall St. bankers’ bonuses in the process. Why the hell would a revolutionary left-wing government want to do that?

Oh, I forgot: so Nicolás Maduro can pretend not to think Hugo Chávez goldbuggery was the enormous boondoggle it very clearly was.