Russia gets rid of US Treasury bonds and buys gold — really quickly!

Russian smaller gold bullion bars, being deliberately not marked with any stamp – loveopium.ru, author: Илья Наймушин (CC BY-3.0)

 

The Central Bank of Russia has doubled its gold reserves during the years 2006-2016 and after the newest gold bullion bars purchases these institution possess more than 2000 tons of the yellow metal. It means a tremendous amount of treasury gold, so Russia could achieve very bold goals with it.

According to some financial analysts US punitive tariffs and resulting from them threat of a world trade war have forced Russia to look at ways of securing its foreign reserves. But according to the central bank of Russian Federation the government dumped US treasuries to keep reserves safe amid fears of another anti-Russian sanctions.

During recent years the Russian gold mines have had a good output and are producing floods of gold for banks

If needed the Russian government or enterprises can easily sold some gold from reserves to help foot the bill, and impossibility of doing so with US treasuries cannot longer be ruled out. Since the armed conflict in Ukraine the American foreign policies are seen as especially insidious in the public in Russia, and to increase purchases of physical gold and dramatically reduce the share of US debt bonds seems to be a very reasonable counter measure. In April already, the Central Bank of Russia sold a half of its US sovereign debt bonds — more than any other major foreign holder of US debt, despite of its gold and foreign currencies reserves growing on the back of rising oil prices and other, quickly increasing export earnings.

The gold buying is inexpensive at present time, but it would change in the nearest future

Russia and China are trading the US treasuries for gold and amounts of that trade are on the rise, so you must not be a genius to arrive at a conclusion that the fall of the present-time international currencies system is coming. Even more so when you notice that the Russians, along with China, are attacking the world dollar's importance on two major fronts.

 

Actions must be resolute

Venezuela and Iran were the first countries to sign oil contracts denominated in their own national currencies instead of petrodollars. China called for a replacement of the US dollar as a world's sole reserve and trade currency some time later. Being until recently one of the largest foreign holders of the dollar the People's Republic of China is riding of the currency — at an appaling speed!

In cooperation with Russia which agreed on a wide range of contracts being similar to these of Iran and Venezuela, China influences negatively the US dollar by tendering its currency, the yuan, also the Russian ruble, instead of it. 

 

Another example and we are thinking about crude oil once again

Global oil giant Rosneft, in cooperation with the Gazprombank has prepared itself for shutdown of US-dependent SWIFT interbank cash transfer services as a result of a possible another round of Western sanctions. A Russian equivalent of SWIFT was successfully completed in December and became operational since March.

Ein russisches Gegenstück zu SWIFT wurde im Dezember erfolgreich fertiggestellt und ist seit März in Betrieb genommen worden. I will write a special article on this subject: dollars, oil, globalism, pretty soon.