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.”
Read More @ SchiffGold.com