The real Currency War

Grandmaster Putin’s Golden Trap

November 23, 2014

Very few people understand (that) Putin is selling Russian oil and gas only for physical gold (not even gold contracts, but taking delivery of physical gold). … Of course, he still accepts US dollars as an intermediate means of payment. But he immediately exchanges all these dollars obtained from the sale of oil and gas for physical gold!

(Look at the growth) of gold reserves of Russia and … compare this data with foreign exchange earnings of the RF coming from the sale of oil and gas over the same period. … In the third quarter of this year, Russia had purchased an incredible amount of gold in the amount of 55 tons. It’s more than all the central banks of all countries of the world combined (according to official data)! …

(Because) Europe will not be able to survive without energy supply from Russia … the Western world, built on the hegemony of the petrodollar, is in a catastrophic situation. … And Russia … now ready to sell its oil and gas to the West only in exchange for physical gold … will be able to … buy gold at current gold prices, depressed by all means by the West … through (their) market manipulation. …

(In November, the) Central Bank of Russia (stated it) can use the gold from its reserves to pay for imports, if need be. It is obvious … this statement is addressed to the BRICS countries, and first of all China. For China, Russia’s willingness to pay for goods with Western gold is very convenient. And here’s why:

China recently announced that it will cease to increase its gold and currency reserves denominated in US dollars. Considering the growing trade deficit between the US and China (the current difference is five times in favor of China), then this statement translated from the financial language reads: “China stops selling their goods for dollars”. … China, of course, will continue to accept US dollars as an intermediate means of payment for its goods (but) will immediately get rid of them and replace with something else … China will no longer buy United States Treasury bonds for dollars

Analysis of the current monetary policy of China shows that … China will quietly replace … and de facto is already replacing (its incoming dollars) with Gold. …

It should be noted separately that the global market for physical gold is extremely small relative to the world market for physical oil supplies …, uranium and goods. … For reference: the … ratio of trade of paper gold versus physical gold (translates) to 1000 to 1.

Using the mechanism of active withdrawal (of gold) from the market (while dumping the dollar), Putin has thereby started the countdown to the end of the world hegemony of petrodollar. Thus, Putin has put the West in a deadlock of the absence of any positive economic prospects. …

The problem of the West is that the stocks of physical gold in possession of the West are not unlimited. … Physical gold from the reserves of the West is rapidly flowing to Russia, China, Brazil, Kazakhstan and India (i.e. the BRICS countries).   At the current rate … the West simply does not have the time to do anything against Putin’s Russia until the collapse of the entire Western petrodollar world. … Thus, Russia poses a real threat to the American model of petrodollar world domination.

The main principle of world petrodollar model is … based on the role of the US currency, dominant in the global monetary system (GMS) . The role of the US dollar in the GMS is that it is the ultimate means of payment. This means that the national currency of the United States in the structure of the GMS is the ultimate asset accumulator, to exchange which to any other asset does not make sense.

Led by Russia and China,  what the BRICS are doing now is actually changing the role and status of the US dollar in the global monetary system. From the ultimate means of payment and asset accumulation, the national currency of the USA, by the joint actions of Moscow and Beijing is turned into only an intermediate means of payment.  Intended only to exchange this interim payment for another and the ultimate financial asset – gold. Thus, the US dollar actually loses its role as the ultimate means of payment and asset accumulation, yielding both of those roles to another recognized, denationalized and depoliticized monetary asset – GOLD!

Traditionally, the West has used two methods to eliminate the threat to the hegemony of petrodollar model …

One of these methods – colored revolutions. The second method, which is usually applied by the West, if the first fails – military aggression and bombing. But in Russia’s case both of these methods are either impossible or unacceptable for the West.

Because, firstly, the … ratings of Putin (are so high in Russia that) Western professionals, who have not yet lost their mind, cannot dream about any color revolution in Russia.

As for the second traditional Western way of direct military aggression, Russia is certainly not Yugoslavia, not Iraq nor Libya. In any non-nuclear military operation against Russia, in the territory of Russia, the West led by the US is doomed to defeat. And … an exchange of nuclear strikes with a country like Russia is not a solution …

Leading Western economists are certainly aware of the severity of the predicament and hopelessness of the situation the Western world finds itself in, … but everyone in the West is silent about it. Silent because no one knows now how to get out of this situation. …

And this is called “Checkmate”, ladies and gentlemen. The game is over.

(Read More)


Gold-Eagle provides regular commentary and analysis of gold, precious metals and the economy. Be the first to be informed by signing up for our free email newsletter.


About icliks

Biding my time in central ms ... yours too, if ur reading this.
This entry was posted in Crash of 2015, Financial World, Geopolitics, new world order and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.