The recently filed federal indictment against Senator Robert Menendez has revealed a surprising detail – a substantial portion of the bribes he is accused of accepting came in the form of gold bars. The indictment does not explain why the Democrat senator and his wife would accept bribes in the form of a precious metal, along with cash and a luxury car found in their home and safe deposit box.
Gold, despite being considered a dubious investment due to its lack of revenue and storage costs, holds appeal for many as a long-term asset with stable value and a hedge against inflation and stock volatility. Investors seeking security in case of an economic meltdown or questioning the stability of the US financial system are often drawn to gold. Advertisements promoting investments in gold commonly target conspiracy-minded individuals on cable television and internet outlets.
Moreover, gold is attractive to those looking to easily stash wealth overseas or possess assets that can be transported abroad. It is also seen as providing a touch of “glitter and glamour”. Author William Bernstein highlights the allure of gold, stating that it is essentially “bling”. These qualities, among others, were identified in an International Monetary Fund report from 2014, which asserted that gold and other precious minerals have been found to be attractive to criminals.
The report highlighted that such minerals are high value, easily portable, odorless, compact, and thus simple to smuggle. Gold, in particular, is easy to melt and cast into any shape. The report further reveals that drug dealers in the United States have been known to purchase gold with their profits, disguise it as common items, and ship it back to suppliers in South America.
The international implications of the illicit use of gold are significant. Venezuela, currently under strict international sanctions and facing an economic crisis due to government mismanagement and corruption, has resorted to illegal mining in the Arco Minero region to generate profits. The Venezuelan government has reportedly sold hundreds of millions’ worth of gold abroad to finance its programs and repay its creditors.
If the charges against Senator Menendez prove to be true, it is possible that he obtained the gold simply because it was favored by two of the businessmen charged alongside him. Regardless of how it came into his possession, the senator showed a keen interest in its value, as he was found searching online for the worth of a kilogram of gold in October 2021, according to the indictment.
During the period outlined in the indictment, the spot price of an ounce of gold was approximately $1,800, as stated by prosecutors. As of Friday, the World Gold Council reported that the price had risen to around $1,925 per ounce. This further demonstrates the significance of gold as a valuable and sought-after asset, even in the face of legal and ethical concerns surrounding its acquisition.
Menendez indictment why gold is eyepopping, with all its legal intricacies and high-profile implications, has sparked a wave of uncertainty across global markets. Investors are clamoring for safe havens to protect their assets in this tumultuous landscape, and this is where gold takes center stage. Historically, gold has been the ultimate refuge in times of economic and geopolitical turmoil, and its allure has never been more magnetic than now.