Latest figures from Russia’s central bank show that it purchased a further $720 million dollars worth of gold in November – which equates to around 18 tonnes at the prices prevailing that month.
As we noted in a previous article here – Is Russia really on the ropes: Could it sell its gold? – there has been speculation that Russia could liquidate some of its gold reserves – currently sitting at a little under 1,200 tonnes, worth approximately $45 billion at the current gold price. However this is probably unlikely given President Putin’s strong positive feelings about the place of gold in any future currency realignment. Indeed such a realignment may, perhaps through the ‘law’ of uninteneded consequences, be being brought ever nearer through what looks like a concerted effort by the West to destabilise Russia’s economy as punishment for its actions in Crimea and south eastern Ukraine. What this has done is force Russia to set up bilateral trade deals with more friendly nations, notably China and former Soviet union satellites, bypassing the dollar, and also setting up its own version of the SWIFT international payments system in case the U.S. tries to freeze it out from using it. Anything which reduces the use of the dollar in global trade will likely bring the day when a new reserve currency (or perhaps group of currencies) will come about.
Koos Jansen, now writing for http://www.bullionstar.com, has been great in picking up material from non English language statements by key figures which somehow seem to be completely missed by most mainstream Western media. In his latest post on the bullionstar site he publishes an exchange of questions and answers between President Putin at his annual press conference only yesterday, and Russian journalist Vyacheslav Terekhov of Interfax, at which the Russian President stated categorically that the Russian Central Bank “should not hand out our gold and foreign currency reserves or burn them on the market, but provide lending resources” For the full article click here.
Again as we pointed out in yesterday’s article on the Russian economic situation, 50 years of sanctions against Cuba have still not brought that country to its knees. Yes its people may lack the wealth and ‘stuff’ that most Western countries’ citizens take for granted, but they are still happy to support their leader’s policies when they have the continuing perception that it is the wicked USA which causes the problems. This has served to unite the people behind the government rather than rise up against it. So it is with Russia, which has an enormously more self-contained economic system than Cuba had when U.S. sanctions were first imposed, and it also has a people who have lived through many years of economic deprivation before and come through them, perhaps not happily, but stoically. Support for President Putin and his strong-man policies seems to be overwhelming as long as the American bete noire is out there to be blamed for any deprivations suffered.
