Venezuela transfers 20 bln usd of reserves to BIS in Switzerland

Venezuela transfers 20 bln usd of reserves to BIS in Switzerland

10.04.2005, 10:39 AM

CARACAS (AFX) - Venezuela has transferred 20 bln usd worth of its reserves, to the Bank for International Settlements in Switzerland, Venezuela's central bank director Domingo Maza Zavala said, confirming an action foreshadowed by President Hugo Chavez last week.

Maza Zavala told daily EL Nacional that the dollar has weakened against the euro, so it seemed appropriate to increase holdings in euros and decrease those in dollar.

The funds transferred were held inr the form of US Treasurys and represent 60 pct of the cental bank's total holdings.

The remaining 40 pct are deposited with European banks in the US, while a small proportion remains invested in US Treasurys.
(snip/...)

http://www.forbes.com/business/feeds/afx/2005/10/04/afx2258927.html

Saddam apparently converted his $10 bn reserve fund at the UN from the dollar to the euro in November 2002 (from memory). Some commentators believe the threat to dollar hegemony was a factor in the decision to invade Iraq although there are other, geopolitical reasons to be factored into the equation. At the same time there were rumours that one other big oil exporting nation was going to follow suit. Had that happened there could have been a massive fall in the value of the dollar with serious economic implications for the US.

Given that maintenance of the massive US external debt is predicated on the Petrodollar remaining the world's de facto reserve currency, Chavez's move is likely to cause major concern in some quarters. He is far from stupid though and it is possibly no accident that his switch follows on from the cementing of military alliances with other countries that have significant firepower...and a big demand for oil.

Watch this one very closely in the weeks ahead. I think, from my non-economist's perspective, that this event is of considerable significance.

<edit> grammar

:shrug:

may lay in the venezuela coastal waters....makes ya wonder

escecially considering _Bush's obsession with trying to destroy him. He's keeping Venezuelan funds out of the grasp of _Bush's ability to attach them under the pretense they believe Hugo Chavez is involved in either shady oil deals or Al Qaida ties.

They do invent their own "truths" as they go along, until they are proven wrong, finally. No reason to let _Bush get his hands on the hard-earned Venezuelan taxpayers' funds.

Russia hinted at it a few years ago.

<clips>

Putin: Why Not Price Oil in Euros?

Moscow Times
October 10, 2003

President Vladimir Putin said Thursday Russia could switch its trade in oil from dollars to euros, a move that could have far-reaching repercussions for the global balance of power -- potentially hurting the U.S. dollar and economy and providing a massive boost to the euro zone. "We do not rule out that it is possible. That would be interesting for our European partners," Putin said at a joint news conference with German Chancellor Gerhard Schroeder in the Urals town of Yekaterinburg, where the two leaders conducted two-day talks. "But this does not depend solely on us. We do not want to hurt prices on the market," he said. "Putin's putting a big card on the table," said Youssef Ibrahim, managing director of the Strategic Energy Investment Group in Dubai and a member of the U.S. Council on Foreign Relations, an influential body of leading world thinkers thought to help set the United States' foreign policy agenda. "In the context of what is happening worldwide, this statement is very important," he said.

http://www.globalpolicy.org/socecon/crisis/2003/1010oilpriceeuro.htm

Excuuuuuse me.

I recall BIS was deeply involved in financing the Nazi party and also laundering money stolen from occupied countries.

Smart move. Chavez is far from stupid.

It'll be interesting to see what * does now to the dollar.

I think it's at 1.19 after being higher than 1.30.

If the dollars about to tank, this timing is really good.