The question of manipulation and shorting, Venezuela is historically amongst the most corrupt countries in the world you don't need me to tell you that, its out there from research organization and smarter people than me, I don't think Chavez himself is directly participating but those around him surely are, the recent 'suitcase scandal' shows palms are greased favors are called in, a corrupt culture knows all the trick and without question will takes advantage of all, manipulating long and short happen in all of North America and the rest of the world, it would be naive to think its not happening in Venezuela it doesn't take a genius to see what happen to share price after the first round of nationalization in the energy sector and with VNT, here is an older pr from GRZ Doug B on shorts.

Apr 07, 2008 5:09pm EDT

Gold Reserve Inc. (AMEX:GRZ) President A. Douglas Belanger said the Spokane, Wash.-based mining company’s stock is being hammered by negative perceptions of Venezuela, short-selling hedge funds and governmental approval of mining projects. A share buyback will not increase the firm’s share price over the long term, Belanger said during an afternoon conference call.

“The stock price to me is, quite frankly, mind boggling. I’ve always believed that management’s is to manage the assets of the company and the stock price should reflect that. It currently doesn’t,” Belanger said. “Clearly, the stock is undervalued based on its asset base. This is the first time I’ve seen, in more than 35 years in the mining industry, where the stocks are essentially underperforming the commodities.”

Belanger said the advent of hedge funds and an increase in short selling is affecting smaller “junior” mining companies. He noted that some people believe the large hedge funds are using the smaller commodity companies as hedging bets against the larger “senior” commodity firms.

“I’m not making a statement about shorting other than it’s done because it can be done. You’ve got a situation, especially with the micro cap or small cap companies, where it doesn’t take a whole lot of money,” he said. “The junior sector’s relative performance to the seniors is awful. Junior’s usually far outclasses.”

A share buyback is not going to “catch the shorts with their pants down,” he said because short sellers can step back during the buyback process and return in after the buyback program is complete. He did, however, note that Gold Reserve’s board has not completely ruled out a share buyback.

“Quite frankly, the best way to deal with shorts is to make some progress in the company. That’s the frustrating part. They can use this current situation against us,” Belanger said. “Don’t get me wrong. I’m not blaming the whole thing on the shorts, but they are out there.”

An analyst questioned whether Gold Reserve’s investor relations firm, Rubenstein Investor Relations, should be doing something to increase up the stock price.

“In terms of [Rubenstein Investor Relations] being an answer to the stock price, that’s not really the objective. It’s really to increase my exposure so I can get in front of the fundamental buyers who can look at the opportunity here,” Belanger said. “There’s been a number that are holders as a result of Rubenstein’s efforts.”

Although its executive offices are in Washington state, Gold Reserve is registered in Canada. An analyst noted that if Gold Reserve would publicize its Canadian roots, maybe the company wouldn’t be hurt by anti-American sentiment.

“Yes, we’re a Canadian company,” Belanger said. “I’m a Canadian. I don’t see the anti-American attitude [in Venezuela] that people say is there.”

Investors in companies with business operations in Venezuela have been worried by Venezuelan President Hugo Chavez’s recent order to nationalize the cement industry. Gold Reserve is currently trying to gain government approval to open copper and gold mines in Venezuela.

“This is not like this is news. Chavez has been talking about the cement industry as a strategic industry for quite some time,” Belanger said. “He’s been admonishing the cement industry for basically getting the benefit of the lower cost of producing cement in the country and shipping a great deal of it out of the country when Venezuela needs a great deal of it internally.”

Belanger said that Chavez has specifically noted that mining is not a strategic industry, unlike cement, power, energy, oil, coal and the telephone industries. Chavez usually precedes significant government actions like the nationalization of the cement industry by about six months to one year of rhetoric, he said.

“We are committed to the [Brisas project in southeastern Venezuela] as ever and clearly frustrated. When you look around the world, most projects in the mining world are experiencing similar or different delays,” Belanger said. “A lot of supply that people are expecting is not coming on-stream in the timeframe that people originally thought and therefore, probably the metal prices are going to do benefit. There’s a cost-benefit to everything.”

He noted that the firm is not “100% committed” to building the Brisas project and is open to alternative. Investors wanting a timeframe for Gold Reserve’s Venezuela projects are not going to get one, he said.

“There really isn’t any set time frame for bureaucracy in Venezuela,” he said. “Mining is not a very well defined industry in Venezuela.”

During the fourth quarter, Belanger said the firm lost $12.4 million compared with a loss of $6.9 million a year earlier.

In Monday’s trading, GRZ shares were down 3.6%, or $0.16, at $4.28.