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Russian Gold Sales Soar As Country Works Towards Cutting Its Dependence On The U.S Dollar

In April 2020, came under new management, articles published before this time, such as the below, may not reflect the views or opinions of the current team.

Russia has been buying up gold, increasing its gold reserves since March 2015. Speculators have been throwing the idea that Russia is working towards decoupling its economy from the Dollar, especially with the growing tensions that America has had with other countries primarily because of the tariffs and economic sanctions. Russia was the third biggest producer of gold in the world in 2017. It produced 266.2 tons of gold in 2017, just 6 tons less than what Australia the second largest gold producer reported in the same year. According to the World Gold Council, the Russian Central bank increased its gold reserves by 224 tons. This would be the third year that the Russian Central bank has increased its reserves by 200 tons.

Shortly after his inauguration for his fourth term, Russian President, Vladimir Putin talked about breaking away from the dollar and diversifying the country’s reserves to bolster the country’s economic sovereignty. To make good on that promise Russia began reducing its holding of the US dollar bills. In April Russia’s debt to the US had been reduced by 50%. In one Month, the Russian Central bank had sold off 47.4 billion of the $96.1 billion in U.S Treasury bonds. Russia isn’t the only country that is beginning to turn away from the US Greenback. Due the political tensions that exist between America and countries like Russia and China, there is a marked risk in depending on the American dollar or any fiat currency.

There is a widely held belief that Americans have used the dollar to impose themselves on other countries. Counties are increasingly becoming weary of using the US Dollar to drive economies. It has also become apparent that the most devastating wars that countries can wage against others will be economic ones. Already, sanctions would be imposed on a country to get it to change certain policies or accept a specific political stance. Now with the escalating trade wars, the U.S President has changed the way countries engage with each other. One can say Russia like China is in a financial war with the U.S. whilst there is a lot of uncertainty, getting out of the dollar and into gold will help insulate these countries from sanctions and protect them from any catastrophic dollar behavior. The Dollar has been used as a weapon for many years. The US has used the dollar to punish its enemies and reward friend. The dollar isn’t only used in trade wars or currency wars, but it is a tactical weapon that has been powerful for a long time. It has been used to force regime changes in countries by creating hyperinflation, domestic dissent and bank runs. The US dollar has the power to depose governments without engaging in any real physical conflict.

By amassing as much gold as possible, helps make countries less vulnerable to the USs economic pressures. Countries amassing all this gold become less dependent on the US governments and its machinations of the US Federal Reserve. Buying lots of gold might be a wise move for Russia in the long term. But the fact that other countries like China and Turkey have been doing the same means there might be something brewing between the members of this new “gold axis”.

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