…What should we make of the fact that the Central Bank of Russia has been steadily amassing vast gold reserves since 2015?
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By the end of 2017, Russia’s total gold reserves rose to 1,828.56 tons, usurping China’s place as the country with the fifth largest gold reserves. Russia has been aggressively increasing its gold reserves for a reason. It has seen the U.S. dollar dominate as a global currency and is working with China to end the U.S./Western currency supremacy. Their strategy appears to be working…With speculation of Russia and China working on a gold-backed currency, a shift in monetary power from the West to the East seems to be their ambition…
The U.S. dollar has had no gold-backing since 1933, nor has the U.S. increased its gold reserves for a decade. See chart below.
…Not only is creating a gold-backed currency appearing more likely month over month, but:
- Russia has also brought inflation way down over the past decade and, more importantly,
- Russia continues to lower its national debt, while the U.S. has increased its debt to a record $21 trillion.
Russia’s financial strategy is making the country less vulnerable to volatile geopolitics.
- Not only is it a significant player in gold, but
- it is also the world’s third-largest gold producer, with the Central Bank of Russia buying up its supplies. During the past decade, Russian has mined more than 2,000 tons of gold, with tonnage expected to increase by 400 tons annually by 2030.
Russia and China understand the value of real, physical gold, a lesson that the U.S. has forgotten while reveling in worthless paper currency.
If Russia and China establish a 100% gold-backed currency, it inevitably changes the game in the West. The dollar will continue to devalue against gold at a rapid rate.
Ultimately, the battle will not be Eastern vs. Western dominance. The real battle long term will be between the U.S. dollar (fiat) and gold.