Register

Peak Oil is You


Donate Bitcoins ;-) or Paypal :-)


Page added on October 8, 2017

Bookmark and Share

This Is The Only Russia Story That Matters

This Is The Only Russia Story That Matters thumbnail

The World Gold Council has reported that the Central Bank of Russia has more than doubled the pace of its gold purchases, bringing its reserves to the highest level since Putin took power 17 years ago.

Russia’s desire to break away from the hegemony of the U.S. dollar and the dollar payment system is well-known. Over 60% of global reserves and 80% of global payments are in dollars. The U.S. is the only country with veto power at the International Monetary Fund, the global lender of last resort.

Perhaps Russia’s most aggressive weapon in its war on dollars is gold. The first line of defense is to acquire physical gold, which cannot be frozen out of the international payments system or hacked.

With gold, you can always pay another country just by putting the gold on an airplane and shipping it to the counterparty. This is the 21st-century equivalent of how J.P. Morgan settled payments in gold by ship or railroad in the early 20th century.

Russia has now tripled its gold reserves from around 600 tonnes to 1,800 tonnes over the past 10 years and shows no signs of slowing down. Even when oil prices and Russian reserves were collapsing in 2015, Russia continued to acquire gold.

But Russia is pursuing other dollar alternatives besides gold.

For one, it’s been building nondollar payments systems with regional trading partners and China.

The U.S. uses its influence at SWIFT, the central nervous system of global money transfer message traffic, to cut off nations it considers to be threats.

From a financial perspective, this is like cutting off oxygen to a patient in the intensive care unit. Russia understands its vulnerability to U.S. domination and wants to reduce that vulnerability.

Now Russia has created an alternative to SWIFT.

The head of Russia’s central bank, Elvira Nabiullina, has reported to Vladimir Putin that “There was the threat of being shut out of SWIFT. We updated our transaction system, and if anything happens, all SWIFT-format operations will continue to work. We created an analogous system.”

Russia is also part of a reported Chinese plan to install a new international monetary order that excludes U.S. dollars.

Under that plan, China could buy Russian oil with yuan and Russia could then exchange that yuan for gold on the Shanghai exchange.

Now it appears Russia has another weapon in its anti-dollar arsenal.

Russia’s development bank, VEB, and several Russian state ministries are reportedly teaming up to develop blockchain technology. They want to create a fully encrypted, distributed, inexpensive payments system that does not rely on Western banks, SWIFT or the U.S. to move money around.

This has nothing to do with bitcoin, which is just another digital token. The blockchain technology (now often referred to as distributed ledger technology, or DLT) is a platform that can facilitate a wide variety of transfers — possibly including a new Russian-state cryptocurrency backed by gold.

“Putin coins,” anyone?

The ultimate loser here will be the dollar. That’s one more reason for investors to allocate part of their portfolios to assets such as gold.

zerohedge



74 Comments on "This Is The Only Russia Story That Matters"

  1. Davy on Sun, 8th Oct 2017 7:51 am 

    “The ultimate loser here will be the dollar. That’s one more reason for investors to allocate part of their portfolios to assets such as gold.”

    Yeap. Buy gold but anyone who understands the true picture of the global economy understands his description above of Russia and the dollar is extreme. This guy has an agenda of pushing the buying gold. More people buy it the price may go up he hopes. He could care less why so he will come up with some narrative. There is a deeper systematic reason why things can’t change much. What is most likely is we will all go down together. We will go down together relatively quick if we quit cooperating economically or with hot wars. We are stuck with the dollar. We are going to see efforts by China and Russia to lessen the importance of the dollar and these are important and will help balance a system that is not in balance. Yet, this can only go so far. Anyone who has studied the Fx markets and global trade flows will understand this. Gold is great as insurance in your personal portfolio but it is not an answer to what is wrong with out financialized global world. We opened a door we can’t go back through without collapse. Get used to it.

  2. makati1 on Sun, 8th Oct 2017 8:03 am 

    You are so sure of your Davy World view that you cannot, or will not, consider that there is an “alternative system in place, and it will be backed with gold.

    Not that Americans will be allowed to own any when the SHTF.

  3. Davy on Sun, 8th Oct 2017 8:18 am 

    “You are so sure of your Davy World view that you cannot, or will not, consider that there is an “alternative system in place, and it will be backed with gold. Not that Americans will be allowed to own any when the SHTF.”

    Mad cat, do you have the mechanics of how that is going to work? I am sure there are many people who would like to know the in depth nature of this new system. If it were so great why hasn’t it shattered the world into a new paradigm? It hasn’t because like you it is all talk. Nothing wrong with gold but it is not going to support the status quo globalized and financialized world. It will help around the edges with different financialized instruments and niche systems but it is not the silver bullet that will kill the dollar and initiate a new age. The new age is either slow or fast financial decline “EVERYWHERE” including your over indebted Asia

  4. Jean Paul Getty on Sun, 8th Oct 2017 8:35 am 

    Small fire on the roof of the US Federal Reserve Building in Manhattan last night.

    It was really no big deal, but now when the Fed is dragged before congress to answer for how they let the US Dollar fall from grace, they can answer “Those records were lost in the fire”.


    Meanwhile, in her hollowed-out volcano lair, Hillary is saying: “Why didn’t I think of that?”

  5. Outcast_Searcher on Sun, 8th Oct 2017 11:17 am 

    If tinfoil ran the world then clowns like Jim Rickards (the author) and FUD spreading sites like Zerohedge would actually matter.

    With the recent decade of low inflation, the dollar is actually depreciating less in the real world since at least the 50’s than at any time.

    But when it’s all short term doom all the time, the relevant facts don’t matter, of course.

    When high inflation returns because of all the federal debt, then it’s time to worry. But before that happens, there will be moderate but accelerating inflation.

    People can buy inflation hedges.

    Jim Rickards has been predicting short term doom and hawking inflation hedges like gold every month in the archives in his blog, starting in late 2011.

    Given the rate of inflation since late 2011, why should we panic THIS time? We shouldn’t.

    But of course, zerohedge can’t be bothered to do the 5 minutes of checking I did to verify what Mr. Rickards is — and certainly not to disclose it to their readers, to present a balanced view.

  6. GregT on Sun, 8th Oct 2017 11:54 am 

    Russia and China are obviously confused in their beliefs that they can go it alone without the USD. It would be in both of their best interests to consult with the world’s leading expert on global financial matters, the delusionalist, from Dent County MO.

  7. Davy on Sun, 8th Oct 2017 12:36 pm 

    “beliefs that they can go it alone without the USD”
    Maybe the financial Einstein from Salmon Arm, BC will explain the mechanics how this might occur especially considering US/China trade equals roughly $647BIL. The first 3 months of 2017 Russian/Chinese trade equaled $18BIL. Numbers don’t lie but extremist lie with numbers.

  8. GregT on Sun, 8th Oct 2017 12:50 pm 

    “Maybe the financial Einstein from Salmon Arm, BC will explain the mechanics how this might occur”

    Is anybody here from Salmon Arm BC?

    Didn’t think so. Another delusion from Dent County MO.
    Crazy.

  9. GregT on Sun, 8th Oct 2017 1:11 pm 

    Even if there was someone here from Salmon Arm BC, I doubt very much that either Russia or China would care. Between the two of them, they have a rather largish group of financial Einsteins to tap into of their own. I’m sure that they know what they’re doing.

  10. print baby print on Sun, 8th Oct 2017 1:22 pm 

    You are completely wright Davy

  11. GregT on Sun, 8th Oct 2017 1:27 pm 

    The delusionalist is always wright.

  12. Anonymouse1 on Sun, 8th Oct 2017 1:29 pm 

    The exceptionlist is so far gone, he is now declaring anyone suggesting that gold is sensible buy, as having one of those ‘agenda’s’ he is so diligent in exposing.

    Newsflash for you exceptionalist, buying gold, or even suggesting doing so, hardly qualifies as an ‘agenda’. Unless having a valuable, widely recognized store of value at hand qualifies as an ‘agenda’ now with you, lol. It is actually good advice. As used to everyone here is at your flailing and wailing about, to suggest owning gold is a sign of dubious ulterior motives is funny, even by your standards.

  13. JuanP on Sun, 8th Oct 2017 2:02 pm 

    I know Uruguay and Latin America would be better off if the USA and the dollar ceased to exist. I think this applies to the whole world. Americans mostly cause trouble and are not worth what they cost.

  14. Davy on Sun, 8th Oct 2017 2:03 pm 

    Mouse1, I own gold do you?

  15. Anonymouse1 on Sun, 8th Oct 2017 2:27 pm 

    Well exceptionalist, by your own definition, you have an ‘agenda’. I order you turn yourself in to the nearest DHS outpost. You’re obviously a russian operative, and likely report directly to Putin himself. And dont forget to take you amerikan heritage\liberty exceptionlist gold coin collection with you as well. The uSgov likes confiscating gold from traitorous subversives like you. (They need the money to buy more rifles and grenades for its uSlamic brigades).

    So kiss your goats goodbye, put your gold liberty coins in a bag, and walk into a DHS facility with your hands high above your head. That way, you and your agenda can spend the next 20 writing long boring, rambling diatribes about how Russia duped you into working for them against your better judgement.

  16. Davy on Sun, 8th Oct 2017 2:58 pm 

    Grehg, can’t you answer a question? Since you are an expert on the how and why of China and Russia going it alone surely you can give an outline of the process or are you just going to tell us how it makes you feel? We know you and other extrwmist anti-Americans love how it feels. I have said myself China and Russia will forge new arrangements that will make sense and show wise economics but going it alone is likely not an option in the current world we live in.

  17. Davy on Sun, 8th Oct 2017 3:03 pm 

    Mouse say something instead of storytelling. Have you given up on your struggles to be an engineer. I imagine you have becuase you are dumb as a box of rocks. You add nothing of usefulness to this board. All you do is Jew hate and whine anti-American puke.

  18. GregT on Sun, 8th Oct 2017 4:11 pm 

    “Since you are an expert on the how and why of China and Russia going it alone surely you can give an outline of the process”

    When did I ever say that I was an expert on the how and why of China and Russia going it alone delusionalist?

  19. energy investor on Sun, 8th Oct 2017 5:01 pm 

    For the last 17 years I have been monitoring China’s acquisition of the rights to oil supplies from Asia, North Africa South America and the Middle East. Their entitlement isn’t fully utilised today because they have access to oil from Russia too. Their own fields are thought to soon enter terminal decline.

    Russia, China and the 5 ‘stans form the SCO defence grouping, and with the”One Belt One Road” transport and trade linkage and the “pearls” – the deep water ports built between Myanmar and Piraeus – they are inviting other Eurasian countries into the SCO.

    Europe is linked to Asia via these transport networks. Why do you think they need aircraft carriers?

    China has funded their equivalent organisations to the IMF and World Bank already and lending money out.

    Although China declares the PBoC gold reserves at 1,800 tons, my calculations show their real and undisclosed holdings will be between 4-6,000 tons. Last week China disclosed its in-ground gold reserves at 12,100 tons and said they will extract gold in future at the rate of 500 tons per year. This is to back their Yuan in international commerce as the substitute to using the petrodollar/US dollar.

    China and Russia are the two central pillars of the BRICS. So when you tally up the population under some sort of influence, it adds up to somewhere between 40-50% of the global population.

    China is the largest trading partner of countries like Australia and New Zealand.

    New Zealand has a population of 4.6 million of which more than 500,000 are ethnic Chinese. How many ethnic Chinese live in USA and Canada – go check, you will be amazed.

    If you tally up stuff like rare earths and a variety of strategic minerals, you will find that many are under Chinese control or near control.

    We Aussies and Kiwis have always been US allies. But we think you have now sleep-walked into danger.

    The US dollar isn’t under attack? What ignorant fools you are, they signaled their intention when Russia asked China to attack the US dollar some years ago, but China was not ready. The US dollar has been under attack ever since.

    Davy, you are just ignorant. The Pentagon isn’t.

  20. energy investor on Sun, 8th Oct 2017 5:06 pm 

    BTW, Nixon closed the gold window because the USA has always run deficits.

    China can back its currency with gold because they always run surpluses.

    Everyone except the USA frowns on supplying the US with goods for which it gets freshly minted dollars that come from nowhere. So an attack on the US dollar because of “it’s exorbitant advantage” was always going to happen.

    Everyone will accept a gold backed currency rather than a freshly fabricated US dollar which is only guaranteed by a debt that the USA will never be able to repay. Much as we love the USA…

  21. makati1 on Sun, 8th Oct 2017 6:14 pm 

    When the gold backed currency hits big time, the US, not having any of its own, will make owning gold illegal…again…and confiscate it in the name of “defending democracy” or some other excuse. They may even pay a few cents on the dollar, but it will be too late. LOL

  22. Davy on Sun, 8th Oct 2017 6:14 pm 

    Well, energy investor, I think the ignorant emotional one is you. Read my comment again. Where did I deny the facts you brought up about Russia and China. Do you think I do not see what is going on? The problem with you Anglo’s is your black and white. You are “either or”. I am also sick of hearing you whine about how pro American you are because you are not. The Anglosphere is anti-American in a broad sense. Maybe not Great Britain so much but the rest of you are. You are not allies you are back stabbers.

    I am clearly aware of everything you said but that does not take away from the fact that the US and the dollar are too interconnected now to the global system for the brics to go it alone. There is no other nation that can usurp the US position but that does not mean China cannot take their positon further in their own position. The US cannot usurp China’s position. They are both part of the same system in different ways. You can’t break either away from the other. They are both too big.

    Energy investor you also have ignored all the negatives about China like their huge credit creations and the bad debt associated with that. That is because you have the agenda of the US is going to be squashed economically and the brics will assume global leadership. You forget about the amount of bilateral trade the US and China have. You conveniently forget about the structure of the Yuan and China’s exporter status that makes it very difficult to establish a reserve currency arrangement. Energy investor review the economics of a reserve currency nation and you will see China does not fit the bill. I am not like you all who are saying China is great and the US is diminished. I am say China is a new financial power house but it is not going to go it alone. It will forge ahead into a new trading alliances and from there who knows what they will develop into because this all depends on where the global economy goes.

    So who is the emotional one? Who is the ignorant one on global financialization? Who is the extremist? I think you are more than I am. The problem with you all is unless I as an American lay down and say we are beaten, you anti-American extremist are not satisfied. You want complete surrender. You Anglos are backstabbing fools who wish you were more than you are. You whine moan and complain constantly about the US and never look in the mirror. It is too hard to look in the mirror because you are also failures.

  23. Davy on Sun, 8th Oct 2017 6:19 pm 

    “China can back its currency with gold because they always run surpluses.”

    BS, energy investor, it can’t do the currency and economic manipulation it is doing with a gold backed currency. It can do some financialization with gold like they are doing with the oil contracts redeemable by gold but forget them backing their currency with gold. That is a whole other animal. Now you are showing how lacking your economic background is.

  24. Davy on Sun, 8th Oct 2017 6:21 pm 

    “the US, not having any of its own, will make owning gold illegal…again…and confiscate it in the name of “defending democracy”

    Sure mad cat you have back up on that or does that just feel well the way it sounds? You stupid anti-Americans get so emotional and hateful.

  25. makati1 on Sun, 8th Oct 2017 6:40 pm 

    Again the Missouri Mule knows mote than the Chinese. LOL

    Simple FACT, Davy. There is no gold in Knox or anywhere, that belongs to the US. Only some that is being held as ransom that belongs to a few other foolish countries that think the US is “safe”.

    The gold at Knox has not been seen by the public for many decades. It has not been audited for the same length of time. Therefore there is no gold, only lies.

    The US is bankrupt. The rest of the world knows it. THAT is why the days of the USD as an important currency is coming ot an end. When it happens the US will have a 3rd world currency and lifestyle. IF they are lucky.

    I hold less than $200 in USDs and they are used to keep my US bank accounts open. All my currency is in Ps Pesos, and others like yuan, yen, rupiah, ringgit, HK dollars, etc. The local currencies I can use when traveling.

  26. Davy on Sun, 8th Oct 2017 6:43 pm 

    The gold is there mad cat. You conspiracy addicts have been saying this now for years and you have never proven it so it is just more of your emotional narratives. Get back to me when you have facts.

  27. makati1 on Sun, 8th Oct 2017 6:47 pm 

    How can you prove me wrong? Answer: You cannot. Believe what you want. You obviously live in that exceptionalist/indispensable bubble most brainwashed Americans inhabit. There is no gold. If there was, it would be audited and the amount made public as it used to do before Nixon closed the gold window in 71′. It was closed because there was little or no gold left even then. The ’emperor has no clothes/gold’.

  28. Davy on Sun, 8th Oct 2017 7:01 pm 

    Do you have proof mad cat? No, so you are just having a wet dream

  29. makati1 on Sun, 8th Oct 2017 7:09 pm 

    Davy, proof? Logic gives me the proof that it does not exist. I know that logic is foreign to Americans these days, but everything points to the empty vaults at Knox. There is no proof, therefore, there is no gold.

  30. Boat on Sun, 8th Oct 2017 7:17 pm 

    mak,

    You have been proved wrong dozens of times on multiple issues. Brainwashed racist idiot is why you live in a human swamp. In the US you had to hide your hate or end up in the firearm stats.

  31. GregT on Sun, 8th Oct 2017 7:20 pm 

    “So who is the emotional one?”

    Obviously the emotional one would be you delusionalist.

    Energy Investor mentioned nothing about emotions, he merely pointed out that you are ignorant of reality.

  32. Davy on Sun, 8th Oct 2017 7:24 pm 

    “Davy, proof? Logic gives me the proof”
    You mean fantasy gives you proof….wing dinger.LOL

  33. GregT on Sun, 8th Oct 2017 7:27 pm 

    “Brainwashed racist idiot is why you live in a human swamp.”

    If Makati is such a racist, then why would he move to the Ps? More nonsense Boat.

    And my understanding is that Trump said he was going to drain the swamp, in the USA. Did he not?

  34. Davy on Sun, 8th Oct 2017 7:27 pm 

    Grehg, she is just like you deeply invested in anti-Americanism. You people are so warped you don’t even understand what is going on inside yourselves. You are probably the worst case I have seen of hyper-nationalistic anti-Americanism. You Canadians base your identity on your emotional hatred of the US.

  35. Davy on Sun, 8th Oct 2017 7:33 pm 

    Grehg, mad cat is a racist. He is racist towards Americans like you. Boat sees through both of you hypocrites. This is why you two hang in your gang. You are the stalker and the prick. Mad cat just spreads the hate and discontent through delusional comments. You rarely say anything of substance. You just stalk and prick in support of mad cat. The dumbass duo.

  36. GregT on Sun, 8th Oct 2017 7:37 pm 

    Makati is an American, Boat has an IQ of less than 100, and you are totally delusional.

  37. Davy on Sun, 8th Oct 2017 7:40 pm 

    mad cat is an ex American and boats IQ tops yours. You are dumb as a box of rocks parading as a Canadian Einstein.

  38. makati1 on Sun, 8th Oct 2017 8:02 pm 

    Davy, you cannot win no matter how much you try. You lose every time you reply because your problems are obvious to all but the lowest IQs here. Defending the indefensible is a losing case and the US in indefensible.

    For the less educated:

    Definition of indefensible
    1 a :incapable of being maintained as right or valid :untenable
    b :incapable of being justified or excused :inexcusable
    2 :incapable of being protected against physical attack

  39. Davy on Sun, 8th Oct 2017 8:08 pm 

    Mad cat, one thing about you being so old your mind is full of plaque AND you are dumb as a box of rocks.

  40. makati1 on Sun, 8th Oct 2017 8:13 pm 

    Davy, what is it with this “old” shit? Is it because you cannot find anything other than my age to talk about? Try to defend the indefensible FSofA is a losing game. Give it up.

    I happen to be mentally better than you by a log shot. Senility does not run in my family. No one has any signs of dementia even in their 80s and 90s. Maybe it is in your family at an early age? It appears so.

  41. Davy on Sun, 8th Oct 2017 8:17 pm 

    Mad cat, you can deny your age but it is obvious to the rest of us. You are suffering early onset dementia. Don’t worry it is common for the very old old.

  42. GregT on Sun, 8th Oct 2017 8:21 pm 

    “He is racist towards Americans like you.”

    I am not a US American, and America is not a race. It’s a tax farm.

  43. GregT on Sun, 8th Oct 2017 8:24 pm 

    “you can deny your age but it is obvious to the rest of us. You are suffering early onset dementia. ”

    More delusions.

  44. Davy on Sun, 8th Oct 2017 8:28 pm 

    Duh, dumbass, no wonder boat has you beat on IQ.

  45. GregT on Sun, 8th Oct 2017 8:34 pm 

    “Duh, dumbass, no wonder boat has you beat on IQ.”

    Another delusion.

  46. Davy on Sun, 8th Oct 2017 8:40 pm 

    You are the delusional by stalking and pricking for respect. Respect is earned not trolled.

  47. GregT on Sun, 8th Oct 2017 8:43 pm 

    “You Canadians base your identity on your emotional hatred of the US.”

    I have yet to meet one single Canadian who did not find the Vegas mass shooting to be upsetting. Come to think of it, you would be the only person that I have heard of anywhere, who can’t figure out why people are upset about it. Is that how you define a pro-American?

  48. Davy on Sun, 8th Oct 2017 8:46 pm 

    Grehg, on a scale of one to ten how anti-American Canadian are you?

  49. GregT on Sun, 8th Oct 2017 8:47 pm 

    “Respect is earned not trolled.”

    I couldn’t care less about what you think. You have proven yourself to be both emotionally, and psychologically challenged.

  50. GregT on Sun, 8th Oct 2017 8:48 pm 

    On a scale from one to ten, how delusional do you think that you are?

Leave a Reply

Your email address will not be published. Required fields are marked *