Day-to-day life for the average Venezuelan is a struggle,
from the moment you wake up
to the moment you go to sleep.
From waking up and trying to turn the lights on,
to finding out that the power went out overnight,
and then trying to take your morning shower,
to find out that you have no water at home.
Then paying for everything
has become increasingly complicated, there's no cash.
Venezuela finding itself without access to dollars,
without access to banks,
without access to avenues of finance, even for their oil,
came to the realization, I guess, that it needed money,
and it needed to find a way to get cash
when most of the world didn't want
to give 'em access to cash.
All assets of Maduro, subject to U.S. jurisdiction,
are frozen.
So now that U.S. sanctions have effectively cut off
Maduro's access to a global financial network,
gold is the last lifeline that Maduro has.
[Television Announcer] Reports claim the Maduro regime
is selling out the country's gold reserves
to ease the pressure of international sanctions.
In the last couple of years, on the side,
and sort of in secret,
the Venezuelans and the Turks started setting up
a pretty sophisticated web of trade
of food and gold between the two countries.
We're not sure who's winning
from the sale of Venezuela's gold,
but what's clear is that the Venezuelan people are losing.
My name is Michael Smith,
and I'm a reporter for the project and investigations team
here at Bloomberg News.
My name is Patricia Laya,
and I'm Bloomberg's Venezuela bureau chief,
and I write about Venezuela's clandestine gold sales.
So the situation in Venezuela is really bad,
and there's currently sort of two worlds in Venezuela,
one world is for the people who have access to dollars.
You can probably afford to have a power generator at home
in case the power goes out,
and you can probably have a water tank installed
for when there's shortages of water.
Now there's the second world, that's the world
that the vast majority of Venezuelans live in,
and it's the world where you live in bolivares.
There's shortages of food,
inflation runs in the thousands, tens of thousands,
hundreds of thousands percent, nobody really knows.
Which means, your savings have long been gone.
There's extreme levels of crime
that makes life extremely difficult
for anyone who's just sort of living there.
You have a whole population that's subdued by hunger,
and that's also under the control of the government,
who's become their sole provider.
People who can't really think of an economic future
because they can't think beyond the day that they're living.
Nicolas Maduro is a former bus driver
and a former union leader.
Maduro came to power in 2013, when Hugo Chavez died.
And he was basically Chavez's handpicked successor.
Outwardly, their message was that
they wanted to spread the country's oil wealth
fairly among the poorest Venezuelans.
And for a while, they were able to,
when oil prices were really high,
they funneled much of that money
through social programs in Venezuela.
But they've been heavily corrupted
in so many different ways, and bungled, and misapplied,
that they've really turned into something
that has just had an incredibly detrimental effect
on the people of Venezuela in many, many different ways.
And when oil prices crashed,
the whole economy came crashing down,
'cause Venezuela depends on 95% of its revenue on oil.
How bad is it, and is there any end in sight?
It's terrible, it's getting worse,
basically Maduro is waging economic warfare
against his own people, his own country.
An abuse of power that started with Chavez,
that allowed him to not just
change the country's constitution,
but also fill the country's courts
and the electoral authority with people
that were loyal to him,
and that allowed the country
to completely eliminate any sort of democratic institution.
Maduro has given most of the government's control
to the military,
so the feeling is that, if Maduro falls, they fall.
So, they have formed a bond through money laundering,
fraud, and all sorts of illegal businesses.
[Television Reporter] A first shipment of gold bars
has arrived in Venezuela after President Hugo Chavez
recalled almost all the country's foreign bullion reserves
from western banks.
So in 2011, shortly after the US economic crisis
and the European debt crisis,
Chavez basically used that as an excuse
to have about 11 billion worth
of Venezuela's gold repatriated from banks in North America,
banks in Europe, back to Venezuela.
He said that it was a measure to safeguard
against financial instability around the world.
And that move by Chavez almost a decade ago
is what's keeping Maduro selling gold nowadays.
It's legal for Maduro to sell his gold,
but what's happened is that after U.S. sanctions,
a lot of the buyers have been spooked.
So what's happened is that
they've begun to sell the gold in secrecy.
[Reporter] On Venezuela, you did the tough sanctions
and you sent the aid,
but it seems like Maduro is no closer to leaving.
We really haven't done the really tough sanctions yet.
We can do the tough sanctions and all options are open.
We want Maduro to leave
so there can be free and fair elections,
with the ultimate goal of ensuring
that there's democracy and freedom in Venezuela.
The U.S. has imposed sanctions on Venezuela
more than a decade ago,
but they never went further
than individual targeted sanctions until 2017.
We have our eye very closely on Venezuela,
Since President Trump
took office,
they were just accelerated to cover hundreds of people
and companies and government entities
and that sort of thing.
We have continued to expose the corruption
of Maduro and his cronies and today's action ensures
they can no longer loot the assets of the Venezuelan people.
US sanctions can be devastating for the people
and companies that are targeted,
they're listed and targets of sanctions.
You become a pariah in the system of commerce and finance.
Unless you're in a country
that will allow you to do business despite US sanctions,
and that's what's going on with Turkey.
[News Anchor] Let's get straight to the breaking news overnight.
An attempted coup leading to chaos, death,
and instability in Turkey.
In July of 2016,
there was a coup attempt in Turkey
against the government President Erdogan,
and it was a serious material threat
to the Erdogan government.
The US watching
this sudden uprising with concern.
Erdogan felt isolated,
he wasn't getting much support
from anyone in the world that day,
and one of the first calls he got
was from a representative of the Venezuelan government,
who contacted the Turkish embassy in Venezuela,
and said, "We're with you,
we know what it's like to be a victim of a coup attempt,
we're pretty sure the U.S. government was behind it somewhat,
we're with you."
And that contact,
which went all the way up to the president of Venezuela
and the president of Turkey,
was really sort of the seed
that turned into a conduit for the Venezuelans
to get their gold out of the country,
and to turn it into money.
There's been a tremendous trade of gold,
tons and tons and tons and tons of it,
that has left Venezuela,
a lot of the national reserves have been sold off.
He still has this lifeline that's available to him,
and that he's clearly been able to get away with.
We've seen him do a multitude of gold sales this year,
despite the sanctions that are in place,
so they realized that he still has a way
to prop up his regime and to stay in power.
There is an estimated eighty tonnes left at the central bank.
That's about $3.5 billion worth.
What's left right now is only enough for six more months
of food subsidies for Venezuela's people,
so if Venezuela runs out of gold,
we don't really know what's going to happen.
What we do know is that they are feeling the pressure,
and this pressure of knowing that gold can soon run out
is what's bringing them to negotiate with the opposition.
To predict where things are going in Venezuela
is a dangerous game in my experience.
You could always find people saying,
"Oh, this can't go on any longer,
it's gonna collapse,"
but I think it's a very complex crisis there
and it's gonna be very difficult to find a solution
that really works quickly, I think.