Gaddafi controlling a top-tier world gold reserve

March 23, 2011 by · Leave a Comment
Filed under: Global News 

It is interesting that we are getting a peek into how a dictator actually operates.  Gaddafi controls the Egyptian Central Bank and their depositary institution with 143 tons of gold bullion as a reserve for the Egyptian Pound.  It is reported that this has been moved from Tripoli to another city in the country.  This gold has a spot (street) value of over $6.5 billion dollars.  Have this hard money available to him will give the Colonel staying power and allow him to continue to cling to power in Egypt.

This will put confidence in the Egyptian capital markets in question.   When such a large asset that was tied to the core function of backing the currency is removed, this will ripple through the markets and increase financial transaction costs in Egypt across the board.    We have already seen a increase in yields for bonds that are tied to Egypt.

It is reported on Bloomberg TV that their is a no-kill order on him so this allows for a stalemate where he is not killing civilians and does not leave the country either.  If that happens then the country has been effectively annexed with loyal forces to the east and independent force to the east.   I don’t think we will let it come to that and we will find ways to turn up the pressure on him on different fronts.

The Sydney Morning Herald – Libyan leader Muammer Gaddafi is reportedly sitting on a 143.8-tonne $6.4-billion pot of gold – enough to pay mercenaries to fight for him for years.  The gold bullion – held by the Libyan central bank and controlled by Colonel Gaddafi – is among the 25 largest reserves in the world, the Financial Times reported, citing the International Monetary Fund.

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