Episode Details

If the stories are to be believed, and the first casualty of war is truth and all that, Venezuelan President Nicolas Maduro sent some 3.6 million ounces of gold - $16 billion in today’s money - to Switzerland before 2017, when the EU brought sanctions against Venezuela.

Switzerland last week froze his accounts and the accounts of some 36 others with close ties. We don’t know how much money he had in them, or how many accounts there were, but the figure doing the rounds is $10 billion.

It has also emerged that Tether has been freezing “wallets identified as being involved in the Venezuelan oil trade.” As much as 80% of Petroleos de Venezuela’s oil revenue is believed to be transacted in tether. This could be a total figure in the billions too.

We also know that Venezuela was mining bitcoin for many years - when the price was a lot lower - but we don’t know what they did with the coins. Did they fall into Maduro’s hands? Were they sold? Were they held?

The number doing the rounds here that it owns 600,000 BTC (~$60 billion). That would put Venezuela up there with Michael Saylor and Strategy. It’s three times the 198,000 coins the US government itself is said to own.

There’s a seed phrase I’d like to know. Where are the keys, I wonder?

And where did the proceeds of Venezuela’s enormous oil, gold and other natural resource exports end up, exactly? Only some of them we know.

At this point we remind you that the Venezuelan currency itself - the bolivar - collapsed in hyperinflation and has little to no value. Beware national currencies, particularly under socialist regimes. They don’t last.

There are several things I take away from all of this.

First, the US dollar - whether via SWIFT or stablecoin - remains the number one international currency of choice, even for America’s enemies.

Second, tether and other US dollar stablecoins might be convenient - you don’t have to use banks - but Tether will do what the US government tells it to do, and if the government wants your assets frozen, Tether will freeze them.

Stablecoins, then, have a central point of failure. If someone can freeze them, they are not sovereign. And just as the US froze Russian US dollar assets after its invasion of Ukraine, so can and will it freeze the stablecoin assets of its enemies too.

What did that 2022 freezing of Russian assets trigger? The mother of all bull markets in gold, and then silver and miners.

What will this freezing trigger? A bull market in bitcoin. Possibly. Likely.

It’s already creeping back up.

While the US does its geo-political, strategic, critical minerals thing, quaint old Western Europe is sinking deeper into higher taxes and - I’m sure they’re coming eventually - capital controls. In fact, capital controls already exist in effect, banks are so heavily regulated and limiting of what you can send and to whom.

The value of permissionless, international money just went up.

You need to own money that they can’t touch, whether by seizure or debasement.

Meanwhile …

Gold and silver continue to go bananas - the latter especially.

So many roads lead to gold at the moment, it’s hard to see when this stops.

The inevitable debasement of national currencies off the back of uncontrollable government spending. Gold. Dedollarisation. Gold. Increasing geo-political uncertainty - Iran, Venezuela. Gold. Reshoring of US industry - highly inflationary. Gold. Revaluation of US gold holdings. Gold. L