Currency
Wars
Russia Buys 34 Tonnes Of Gold In September
Prior to World War I Russia held the world’s third largest gold reserves, behind America and France. In the subsequent Russian Revolution, civil war and the rise of communism, they dropped down the table of nations with large gold reserves and the U.S. became the largest holder of national gold reserves.
In recent years, since 2007, an increasingly powerful and assertive Russia has worked hard to reprise its place in the world’s top gold reserve rankings, quadrupling its purchases in the period to June this year.
A 34 ton purchase of gold (1.1 million ounce) in September has put Russia firmly back in the golden spotlight. The country now holds 1,779 tons of gold, placing it sixth in the world and just behind China.
In the first two quarters of the year the CBR purchased 129 tons, making the late-summer purchase the best since October 2016. Taking into account the September purchase, Russia needs to buy just another 37t in order to purchase 200t by the end of the year – the amount it has done each year, for the last two years running.
This is a similar approach to fellow-gold buyers China who have also been reducing their holdings of and dependence on the dollar. Both Russia and China have created mechanisms for trading nations to use gold rather than the US dollar in bilateral trade arrangements.
DYI:
Wondering why all of the Russia, Russia, Russia narrative from the CIA main stream press?? Currency war!
The American petrol-dollar days are numbered.
US dollar hegemony has given the United States unparalleled strategic advantage, notably preventing Russia and China from creating an economic area of integration. For years this has worked in the United States’ favour, however when Putin came on the scene Russia almost immediately began to gradual move away from US dollar dependency.
Today the country has one of the lowest levels of dollar-denominated private and public debt, in the world. The country has also decreased the share of euro in its foreign reserves from 40% to 26%.
The danger with holding lots of dollars is if the US wanted to damage Russia’s finances, this would be possible through currency manipulations and sanctions. Iran is an example of country holding gold is insurance against such an event. There is also the very real risk that the U.S. with sharply devalue the dollar in the coming months and years. This would result in Russia’s dollar reserves becoming worth a lot less and in a worst case scenario become worthless.
The risks to a saver may seem vastly different to those of a central bank but really they are quite similar. Both are exposed to the decisions made by politicians around the world. Like Russia, we too are awaiting with baited breath what President Trump will do next or what the EU will soon decide is the best way to ‘protect’ the Super state bloc. We are exposed, as are our savings and investments.DYI:
Physical gold is reasonably valued and yet precious
metals mining companies due to their massive sell off (despite the bounce off
the bottom) remain undervalued. American
stocks and bonds remain insanely overvalued with precious metals being the only
broad asset category reasonable priced.
DYI’s model portfolio stands pat with mining companies and a ton of cash
waiting for better values ahead!
No comments:
Post a Comment