You're familiar with my thoughts on gold: I buy it regularly as insurance, not an investment. Now here's something you didn't expect: I just watched a STRATFOR video and learned that the Venezuelan president, Hugo Chavez, keeps an epic 60 percent of the nation's reserves in gold. Wow. Guess he sees it as insurance as well?
Watch the video. It covers four recent moves by the ailing leader in an attempt to drum up some cash for his social programs, which can only be interpreted as a strategy to keep his waxing and waning political support strong. It all goes to show that Venezuela is a nation to watch, for better or worse, given Chavez's illness and the absence of a strong successor.
Oh, and let's not forget that the U.S. imports about a million barrels per day of oil from Venezuela, or 8 percent of total U.S. oil imports ... not insignificant.
After you <<watch and digest the video>>, I suggest subscribing to STRATFOR to access all their geopolitical intelligence. They cover everything from Chavez to China, and all things in between, with a unique perspective. OTB readers get a whopping 63% discount off their first year, plus a free copy of The Next Decade, the forward-looking bestseller by STRATFOR CEO and founder George Friedman. Try them out. As they say, it's a golden opportunity.
Your keen on geopolitics analyst,
For those of you keeping up with the much-discussed energy deal between China and Russia, you know the many reasons, both geographic and political, why it's unlikely to pan out. The geopolitically savvy folks over at STRATFOR told us about it a couple of weeks ago, and have moved their forecasting on to an existing energy relationship, between China and Venezuela—now potentially uncertain due to Hugo Chavez's precarious position in a Cuban hospital.
Whether Chavez gets better or not, a political transition is down the line somewhere, and China could lose its current preferential treatment as primary investor in Venezuelan oil. This is the kind of thing we have to know about as investors. Yes, we all know that Chavez is ill. But what, if anything, does that mean for the South American energy sector? What about the future of oil, China, the U.S., and so on? This is the kind of forward-looking analysis you get from a news publication like STRATFOR. It doesn't get any better than these guys.
Enjoy this complimentary piece from them. If you're interested in more, watch their video on the <<Venezuelan oil industry here>>, and then take advantage of their special discount for OTB readers. I read them every day, and highly recommend you check out their subscription offer.