The machinations of Venezuelan leader Hugo Chavez fascinate me, especially when it comes to his countries natural resources. First he went to great lengths to kick foreign countries out of his mines. Then at the end of last month word came that he is looking to develop Venezuela's gold and diamond mining and seeking loans to do so. Chavez promised that those helping Venezuela might be paid with some of the output of the country's potential gold and diamond mines.

It's all part of Chavez's determination to nationalize just about anything that Venezuela has to offer. For him the country's resources are bargaining chips in a global game for power. Last month he was quoted as saying his country was on the verge of some deals with several institutions and countries. Chavez has another resource to bring to the table as well, Venezuela's oil reserves. Venezuela and China Development Bank Corp. are working on a multibillion dollar infrastructure loan to be paid in oil. The deal aligns Venezuela closer with China, one of his main targets in separating himself from the U.S. Chavez has also been in talks with Russia, India and Brazil, eager to offer his resources to countries with rapidly increasing energy needs in return for huge loans. China already made two $4 billion loans to finance infrastructure projects in Venezuela in return for, what Bloomberg says is an arrangement providing 230,000 barrels a day of oil to China National Petroleum Corp. Meanwhile Russian and Iranian officials have visited the huge Las Cristinas gold deposit with an eye toward joint projects there.

Chavez's machinations have affected Venezuela's relationship with the rest of the gold and stone buying world. The Kimberley Process website says that Venezuela has voluntarily suspended exports and imports of rough diamonds until further notice. But when it comes to gold investors are eager to have what Chavez can provide. Even though both jewelry and industrial use has decline, gold investments are up and the supply is finite. Gold investors are looking to Las Cristinas and wondering if Chavez will pull the trigger. Chavez has said that any moves he makes will be what is best for the people of his country and for the environment. But as he increasingly cracks down on opposition of any kind it's hard to believe that he's just a benevolent figure doing what is best for his people. While it may sound like having a country have control over its own resources make sense sometimes, as has been true in some African nations, it can lead to greater corruption and exploitation. A recent report from Congress points out the increases in the Venezuelan drug trade and blames major corruption in the Venezuelan government. Venezuela remains one of the most beautiful countries in the world, rich in its heritage, its people and its natural resources but it increasingly looks like it is unsafe in the hands of the man who has vowed to protect it.