Hard gold is the primary monetary asset held by sovereigns that cannot be illicitly seized by foreign governments except through force of arms.*
Russian governmental/RCB gold is held inside Russia, and it is not necessary to sell Russia’s gold to western markets to support Russia’s economy. Other Russian gold, carry trade gold bars, vaulted in London/ New York and Swiss vaults by private holders, are minimal in number. They are held/leased by private individuals and private banks. In other words, Russian governmental central bank hard gold is not held in New York, City of London, Valcambi / Swiss-BIS vaults. Also, Russia and China hold much more hard gold in their vaults than the west (or east!) cares to acknowledge.
The London Bullion Market Association has booted Russian refiners out of the LBMA, and Swiss refiners are refusing Russian gold dore for refining too, thus isolating Russian refiners from western markets along with western gold trade sanctions. China and Russia have competent domestic gold refinery industries, and can still trade directly for resources with Vietnam, India, Thailand and other nations appreciative of the monetary metal.
Regarding a (partial) gold-backed yuan or ruble? A potential for domestic currency support exists and such governmental steps are underway. An international partial gold-backed currency (China yuan) is likely many months (years?) away, and could only be (partially) backed by eastern banks and exchanges. Western “bullion banks” (primary dealer banks or central banks that trade gold) will not formally allow any gold-backed currency to trade on western exchanges; and the IMF specifically forbids nations with gold-backed currencies to qualify for membership.** So, a Russian gold-backed ruble (partial) may be possible domestically with time, especially if the ruble weakens within the country.
Hard gold trade between China and Russia has been historically low but that situation may change. One point being that China may pay for Russian oil with hard gold, however it’s far more likely that China will swap yuan for rubles to purchase Russian oil, thus supporting the ruble. The former United States has already warned China about that.
By the way, a fact seldom mentioned is that the Ukraine possesses a reasonable amount of hard gold reserves, but since 2014 that (real) gold has been physically transported to the Western cartel (London/New York). It’s another key Coup d’Etat achievement that US State must be very proud of, and is not publicly acknowledged in the west, only privately among gold traders.
The Shanghai Gold Exchange (China) is the largest gold exchange in the world, but only intersects with western finance through the tight control of the CME. However, if China were to open the Shanghai Gold Exchange to direct international currency convertibly for gold (bypassing the CME) and work with Russia to provide a parallel gold bourse for refiners and delivery, that could bifurcate western control over monetary-commodity metals markets; a scenario that most terrifies the crooks of the western gold cartel. But for now, the major threat to the gold cartel is only via the London EFP (Exchange for Physical) mechanism where the New York CME trades/transports their alchemy-created gold … which could blow up again (as it did in 2020) in the event of hard gold supply or transit disruption.
The BIS too has shown its Pharoah’s hand*** and threatened certain gold depositors with potential forfeiture… something that did not happen even during WW2. As such, the western gold cartel has openly proved itself to be unreliable, an international criminal monetary bad actor, where all the above could have momentous impact. But for the moment, Wall Street/western banks will maintain their jack-boot hold on the financial neck of the world. Current events do not threaten the west’s gold cartel with crisis… yet. That’s due to enforced hypothecation (settling for cash instead of for the asset) and because key western Central Banks may convert as much virtual/digital currency (euros/$) as needed to alchemical gold (Wall Street ETF & CME virtual gold futures) to suppress gold.
The paper (virtual) gold futures market is truly how the cartel protects its fiat (by decree) $ and euros. Of course the gold cartel (LBMA-BIS-Fed-CME-IMF) must continue to suppress monetary-commodity metals (gold and silver) as it has historically done, otherwise the fiat illusion will fail. For now, the ongoing illusion is secure, but a pullback of the curtain may be in the offing, and the almighty cartel must – at least – be uneasy.
Steve Brown
*The role of hard gold as a most important component of sovereign monetary independence and financial guarantee, has been obfuscated by Wall Street, the gold cartel, and their MMT/alchemical “bullion banks” for many decades.
**At present there are none!
***BIS, in the Land of the Pharaohs.
Direct source: Novus Confidential
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