Pay for Oil with Gold (Fictional)Paolo Rigoni
January 5, 2008
Disclaimer: This is a fictional news story, published purely for your entertainment.
World financial markets were rocked today, following several announcements from a South American President. President Ugo Chuvit, of Ivantitalla, made 3 proclamations this morning.
1. Ivantitalla, the world's fifth largest exporter of oil, will no longer accept US dollars for payments of resource exports. Effective immediately, oil and other resources may only be paid for in physical gold or silver. The USA imports about 60% of Ivantitalla's daily exports of about 2 million barrels of oil per day. President Chuvit said "We will no longer accept the depreciating paper currencies of the USA and other countries for our oil resources. We export $200 US million worth of oil each day. If the USA wants our oil, they must pay us in gold or silver, at market rates. Payments of gold and silver must be delivered to us before our oil leaves our country. In order for the same amount of oil to keep flowing to the USA, they must deliver $120 million in gold or silver each day. If the USA can't pay for our oil, we have other customers who will be happy to take their place."
2. President Chuvit nationalized all gold, silver and other mines in his country this morning. Armed forces took control of 11 operating mines, all foreign owned. President Chuvit said "The gold, silver and minerals in the ground beneath our feet belongs to every man, woman and child of Ivantitalla. It is time to enrich our people with our resources, and not the greedy shareholders of other countries. Why should our people suffer and grow thin, while the foreigners take our precious resources away and grow fat? As of this morning, the mines are owned by our Central Bank. We will determine the present value of the mine's equipment and infrastructure, and compensate the foreign companies fairly. I would like to encourage all foreign staff currently working in our mines to continue working here. To show you our appreciation for your future efforts, we will pay you a monthly bonus of 25% of your wages tax free, in gold coins, which you may take out of the country if you wish."
3. President Chuvit declared the issuance of a new currency, the Bullivar, and a return to a gold standard for money. Effective immediately, all holders of Ivantialla's bank notes may go to a local bank, and exchange their current money for newly issued bank notes, which are fully redeemable for gold. You may exchange old bank notes for the new bank notes until the last day of this month. After that, the old bank notes are cancelled, worthless and non-redeemable for the new bank notes. The new bank notes drop 3 zeros from the old ones. For every 1,000 old Bullivars, you will receive 1 new Bullivar. You will still be able to use debit cards and credit cards for convenience. There is no need to convert your funds on deposit, as they have already been converted to the new currency.
Chuvit stated "Our total M2 money supply is worth about 18 billion Euros. We have been aggressively buying gold over the past 3 years, and now hold over 1300 tonnes of gold in our Central Bank. Much of our gold has come from the sales of other Central Banks. Our gold reserves are currently worth more than 100% of our existing total money supply. Most of our gold is in 400 ounce bars, and audited monthly. You may view an inventory of each bar's serial number at our Central Bank's website. We have minted new gold coins, in 1/10th, 1/5th and one ounce weights, and hold about 50 tons of gold coins. These gold coins are available at all banks and you may redeem your new bank notes for gold coins or small bars. Our gold resources will continue to climb, as foreigners must pay us in gold or silver for any of our resources that they buy. We will also continue to add to our above ground resources by mining our underground resources. Our currency is now just as strong, stable and valuable as gold is. There are only 5 other countries in the world that hold more gold than us, even though their money supplies are thousands of times larger than ours. We are the only country on the Gold Standard.
It is time for our people to prosper. We have a country rich in resources needed by others. These new changes will start a golden new age of prosperity for all of us. There will be new schools, hospitals, roads and infrastructure."
World financial markets reacted swiftly to the news. Gold has shot up $105 to $969.00 per ounce, and silver has soared up by $5.50 to $20.86 per ounce. Oil traders are scrambling to find and buy physical gold and silver. Futures are also soaring higher, as many oil traders are buying distant future gold/silver contracts at today's prices, and planning to take physical delivery of their gold contracts in order to pay for their future oil needs. Oil prices rocketed up $12.50, to $112 per barrel, from fears of a supply disruption of about 1 million barrels per day into the USA from Ivanitalla.
Famed financier Georgie Auros, based in Singapore, stated: "This changes everything. You can't print gold the same way you can print money. By introducing a gold standard, I expect Ivantilla to prosper, while all other countries continue to lose purchasing power from their fiat currency debauchment wars. I expect other South American countries to soon follow Chuvit's example, as other South Americans demand that their leaders make the same changes. I am bullish for the long term on Ivantitalla's new fundamentals, and have already taken a large position on their stock market."
Ivantitalla's stock market responded today by soaring 8%, its largest daily gain ever.
January 5, 2008
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