Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

“He Who Has the Gold Makes the Rules” and Russia Is Getting the Gold

  by    0   6

Remember the golden rule: He who has the gold makes the rules.”

And the Russians have the gold. Or at least they are in the process of getting it.

The saying apparently originated in the Wizard of Id comic strip. And while it may have comical origins, it nevertheless rings true. At least it must in the minds of the Russians because they are buying a lot of gold.

According to the World Gold Council, Russian gold reserves increased 224 tons in 2017. It marked the third consecutive year of plus-200 ton growth, and Russia’s gold holdings have topped 1,800 tons. To put that into perspective, between 2000 and 2007, the Russian central bank held just 400 tons of gold.

Only a few central banks are piling up gold right now. Official gold reserves worldwide grew by 371 tons. The biggest purchasers of the yellow metal last year were Russia, Turkey, and Kazakhstan. And the Russians bought more gold than all other countries combined. Last year’s buying spree made Russia the sixth largest holder of gold in the world. And the Russians have almost caught up with the Chinese, at least based on China’s official numbers. (Many analysts think the Chinese have much more gold than they reveal publicly.)

Gold bullion now accounts for 17% of Russia’s total foreign reserve assets. That compares with China’s gold stores, which account for about 2.5% of its reserves.

As we reported last December, Russia’s growing gold hoard is helping the country establish economic and political stability and independence. And as Markets and Money writer Shae Russel noted, we shouldn’t ignore Russias growing hoard of gold.

Even though the precious metal isn’t at the center of the financial system today, gold still equals power.”

So, why do the Russians want gold? There are certainly a number of reasons. But chief among them – Putin wants to get away from the dollar and the euro. He wants monetary independence. Gold offers him that. As Macquarie Group metals analyst Matthew Turner told Bloomberg gold is as geopolitics-proof an investment as any in the age of sanctions.

Gold is an asset that is independent of any government and, in effect, given what is usually held in reserves, any western government. This might appeal given Russia has faced financial sanctions.”

After the Crimea referendum in early 2014 and the ensuing political fallout, Russia increased its gold reserves by almost 75%. First Deputy Chairman of the Russian Central Bank Sergey Shvetsov told RT buying gold increases Russia’s independence.

I will not dwell on the geopolitical situation. Every smart person understands the value of gold in ensuring financial and economic security of the country.”

As we reported last year, Russia and China seem to be setting the stage to set up an alternative the international US dollar system. The two countries are reportedly moving closer to developing a broader gold-based trading system that could also include Brazil, India and South Africa (BRICS). On a 2016 visit to China, Shvetsov told TASS that the two countries want to facilitate more transactions in gold.

“We discussed the question of trade in gold. BRICS countries are large economies with large reserves of gold and an impressive volume of production and consumption of this precious metal. In China, the gold trade is conducted in Shanghai, in Russia it is in Moscow. Our idea is to create a link between the two cities in order to increase trade between the two markets.”

Whether Russia and China and successfully dethrone the dollar remains to be seen. But if gold really is power – Americans should probably keep an eye on the Russians.

Bitcoin buy gold from SchiffGold

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Top Slovak Party Leader Wants the Country to Bring Its Gold Home

A top Slovak political party official said his country should bring its gold home because even its allies cannot be trusted with it. Ex-Premier Robert Fico chairs the biggest party in Slovakia. Last week, he called for a special parliamentary session on the country’s gold. He said the country’s gold reserves are not safe in […]

READ MORE →

The Lurking Inflation Monster

Where’s the inflation? The Federal Reserve printed money for nearly a decade, and yet, inflation – as measured by the government – has been “muted.” What gives?

READ MORE →

Gold Set to Join the “All-Time Highs Club” — Bloomberg Intelligence

Gold is poised to join the “all-time-highs” club in the upcoming decade. No, this isn’t the musing of some gold-bug. It’s analysis from a pretty mainstream source — Bloomberg Intelligence. Stocks have set new records over the last several weeks and the dollar hit 2-year highs this fall. But writing in the commodity outlook, Bloomberg […]

READ MORE →

Recession Early Warning? Spending By the Wealthy Is Slowing

America’s economy is built on consumption. Average Americans have been pushing the US economy along, spending money they don’t have. But as we’ve reported, there are signals that the credit cards might be close to maxed out. Now there appears to be another warning sign – the wealthy are reining in their spending.

READ MORE →

Poland Brings Gold Home; Calls It a Symbol of Strength

Poland has repatriated 100 tons of gold from England. National Bank of Poland Governor Adam Glapiński announced the yellow metal’s return home on Monday. “The gold symbolizes the strength of the country,” Glapiński told reporters.

READ MORE →

Comments are closed.

Call Now