While Venezuela’s socialist government doesn’t seem to see much cause for concern in the recent market turmoil, what does get its pulse racing is the fact that it has billions of dollars of foreign reserves stashed away in banks under the control of “imperialist” regimes.

Worrying that its foreign assets are in danger of being frozen one day, as has happened to Libya, the government is allegedly planning to shift its international reserves to banks in “friendly” countries – namely China, Russia and Brazil.

Regardless of what kind of actions the Venezuelan government might be planning that they think could merit such an extreme measure, it’s worth noting that this might not be as drastic a move as it sounds. Blogger Miguel Octavio has worked out that of Venezuela’s $29bn-odd reserves, it is probably only going to be possible to move about $5bn.

That’s mainly because about two-thirds of Venezuela’s reserves are held in gold, which Octavio notes is equivalent to about 150 armoured trucks-worth of gold. Venezuela is unusual among countries of its kind in holding so much gold, with the 13th largest gold reserves in the world, according to the World Gold Council (most of the countries ahead of it are in the G10). But this has certainly served Venezuela well: the consistent rise in gold prices has effectively papered over a fall in its reserves this year, despite high oil prices.

Moreover, for Venezuela, whose government rather remarkably seems to be capable of “losing” $29bn, $5bn is small change.

Still, China, Russia and Brazil may be happy for a bit of collateral, even if it is nothing compared to the roughly $34bn debt with these countries that Venezuela has notched up over the past 16 months – most of it with China, at some $28bn, after Hugo Chávez announced a new $4bn loan from the country last week, to be repaid with oil.

The Financial Times